Assigning Contracts In Canadian Insolvency Proceedings

Written with the assistance of Mitchell Allison, articling student.

Canadian restructuring and liquidation legislation provides struggling companies and bankruptcy trustees with powerful tools to restructure their affairs and maximize value for stakeholders. For example, in the right circumstances valuable contracts can be assigned, on notice to the counterparties, to buyers prepared to pay well for the rights conferred under the contracts. In such circumstances, the counterparty's bargained for right to withhold its consent to an assignment can be effectively overridden by court order. The recent decision of the Supreme Court of British Columbia in Barafield Realty Ltd. v. Just Energy (B.C.) Limited Partnership highlights the importance of proper notice.¹