Torys Insolvency Litigation: Key Developments And Takeaways For 2026

This past year or so has featured a diverse range of consequential insolvency disputes across industries, underscoring both the breadth of challenges facing Canadian businesses as well as the continued adaptability of Canada's insolvency framework. As we look ahead, these decisions offer guidance into how courts may approach key issues going forward. We offer our insight into some of the most significant cases in which we have been involved, as well as observations that may help inform how stakeholders navigate insolvency proceedings moving forward.

Landmark decision on forced contractual assignment and ipso facto clauses: Hudson's Bay Company ULC et al.

In a case that captured the public's attention throughout 2025, eight objecting landlords successfully opposed HBC's proposed sale of 25 of its most consequential leases to Ruby Liu Commercial Investment Corp (Central Walk)¹. This dispute tested the boundaries of section 11.3 of the Companies' Creditors