Today the Supreme Court of Canada released their decision in
Re: Redwater [2019 SCC 5]. The decision, which
overturns decisions of the Alberta Court of Queens Bench and Court
of Appeal, has far reaching effect on the treatment of oil
companies in insolvency proceedings (bankruptcy, receivership or
court-supervised restructuring). Essentially, bankruptcy
trustees, receivers or insolvent companies trying to restructure
will not be able to sell valuable oil and gas assets for the
benefit of creditors without providing for the properties which
have little or no value due to liabilities associated with the
abandonment and cleanup of wells. While at first glance this
seems beneficial, the long term effect may be a chilling of the
market for distressed assets, since purchasers will either lower
their price for the "good assets" or decide not to buy at
all, leaving the "good" properties unexploited and the
"bad" properties still to be cleaned up at taxpayer
expense. An
