Property Leasing: Recent Developments of Importance
Good News for Landlords – Letter of Credit Draws are Not
Limited to a Landlord's Preferred Claim under the
BIA
On October 28, 2020, the Ontario Court of Appeal released
its decision in 7636156 Canada Inc.
(Re), 2020 ONCA 681 ("OMERS"), on
appeal from the decision of the Ontario Superior Court of Justice
in 7636156 Canada Inc. v.
OMERS Realty Corporation, 2019 ONSC
6106. The case held that the Landlord was entitled to draw on the
full amount of a letter of credit obtained by virtue of its lease
with an insolvent tenant instead of just the preferred claim equal
to three months' worth of accelerated rent under the insolvency
laws.
