ARTICLE · 16 AUGUST 2016

Substantive Consolidation: Efficient And Equitable Restructuring Of Group Companies

Cox & Palmer

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Gray Aqua Group of Companies, Re is a case from New Brunswick that dealt with the remedy of substantive consolidation under the Bankruptcy and Insolvency Act (BIA).

CanadaInsolvency/Bankruptcy/Re-Structuring

Gavin D.F. MacDonald

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Gray Aqua Group of Companies, Re¹ is a case from New Brunswick that dealt with the remedy of substantive consolidation under the Bankruptcy and Insolvency Act (BIA). Historically, courts have shown reluctance in granting consolidation and it was seen as an extraordinary remedy.

Background

The group of eight aquaculture companies (the "Group") operated as an integrated enterprise with centralized management, sales and accounting all based in New Brunswick. The Group filed separate notices of intention (NOIs) and Ernst & Young was appointed as the Proposal Trustee. The Proposal Trustee sought an Order for a Consolidated Proposal, pursuant to sections 34, 66, 183 and 192 of the BIA.

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