ARTICLE · 10 MAY 2017

Payless Canada Goes DIP-Less

Goldman Sloan Nash & Haber LLP

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In Recent Payless Decision Ontario Court Sides with Landlords and Refuses to Grant DIP Recognition Order, showing that Recognition of US DIP Orders under the CCAA is not Automatic.

CanadaInsolvency/Bankruptcy/Re-Structuring

Michael Rotsztain

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In Recent Payless Decision Ontario Court Sides with Landlords and Refuses to Grant DIP Recognition Order, showing that Recognition of US DIP Orders under the CCAA is not Automatic

Payless Holdings LLC (Re), 2017 ONSC 2321 (CanLII)

Summary

In a decision released on April 20, 2017, Regional Senior Justice Morawetz of the Ontario Superior Court of Justice dismissed the Payless Group's application for an order under section 49 of the Companies' Creditors Arrangement Act (Canada) ("CCAA") (a) recognizing in Canada an interim debtor-in-possession ("DIP") financing order made by the US Bankruptcy Court (Eastern District of Missouri) (the "Interim DIP Order") and (b) granting a DIP charge on the property of three Canadian Payless entities ("Payless Canada Group"), wholly-owned by US Payless entities, ranking in priority to all unsecured claims, but subordinate to certain court-ordered charges.

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