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ARTICLE · 28 FEBRUARY 2019

ABQB Clarifies Test For Lifting The Stay To Replace An Insolvent Operator

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The Alberta Court of Queen's Bench has issued several conflicting decisions on whether a stay of proceedings in an insolvency matter should be temporarily lifted to allow enforcement of a contractual right to...

CanadaInsolvency/Bankruptcy/Re-Structuring
Kelsey Meyer
Kelsey Meyer
Chris D. Simard
Chris D. Simard
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The Alberta Court of Queen's Bench has issued several conflicting decisions on whether a stay of proceedings in an insolvency matter should be temporarily lifted to allow enforcement of a contractual right to immediately replace an operator of oil and gas assets in the event of the operator's insolvency. In the recent decision of Alberta Energy Regulator v Lexin Resources Ltd, 2019 ABQB 23 [Lexin], the Alberta Court of Queen's Bench (ABQB) provided much-needed clarification regarding the test to be used in determining whether a stay of proceedings imposed in a court-sanctioned insolvency proceeding should be lifted to permit a co-owner to assume operatorship of oil and gas assets. After analyzing three previous conflicting decisions of the ABQB, Justice Romaine emphasized the importance of the test for lifting a stay of proceedings in a receivership, which she explained in detail in Alignvest Private Debt Ltd v Surefire Industries Ltd, 2015 ABQB 148 [Alignvest]. This

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