Jeremy Opolsky Discusses Equitable Subordination in Canada with Law Times

April 13, 2017

On September 9, the Court of Appeal for Ontario ruled that the American doctrine of equitable subordination does not correspond to the Companies’ Creditors Arrangement Act’s (CCAA) remedial objectives and therefore cannot apply to the insolvency case concerning Stelco (formerly known as U.S. Steel Canada). The Court’s decision indicates the weakening of the American doctrine in Canada. Law Times featured Jeremy Opolsky, senior associate and expert in corporate litigation related to insolvency and restructuring, in a recent article for his insight. Below is an excerpt from the article.

Jeremy Opolsky, an insolvency and restructuring lawyer in the Toronto office of Torys LLP, wrote a paper on the doctrine’s uncertain status in this country back in 2015.

He says the Ontario decision “gets us much closer to some finality in terms of its application in Canada,” but he adds that the upcoming hearing at the Supreme Court ”may once and for all tell us where we stand.” […]

If the Supreme Court of Canada declines to rule again on the doctrine, Opolsky says equitable subordination may live on in Canada under the Bankruptcy and Insolvency Act. […]

Beyond that, Opolsky says, federal politicians could include an amendment to finally add the doctrine to the CCAA during its next review of the act. “It’s always possible, although I haven’t sensed any appetite from Parliament that this is anywhere near the top of their priority list,” he says.

In the meantime, he says much depends on whether the Supreme Court finally rules on the doctrine.

“If they don’t, then it might fade into nothingness,” Opolsky says.

To read the full article on Law Times, click here.


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