The recent uptick in bankruptcy and insolvency filings in Canada
and the U.S. may be the tip of the iceberg given increasing levels
of economic uncertainty. In this era of global economic
integration, many of these insolvencies will have cross-border
components.
To help address cross-border matters, the Companies'
Creditors Arrangement Act (CCAA) allows Canadian courts to
recognize insolvency orders from foreign courts. In recent weeks,
an Ontario Court
recognized an arrangement order of a UK court for Syncreon
B.V., the first time that a Canadian court has recognized a UK
insolvency proceeding under the CCAA. On the same day, the Ontario
court
also recognized an order of a New York bankruptcy court
for pharmaceutical company Purdue Pharma LP. In an analog to the
CCAA provisions, Chapter 15 of the U.S. Bankruptcy Code allows
debtors who have obtained insolvency orders in a foreign
jurisdiction to have those orders recognized in U.S. bankruptcy
courts.
