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Key Developments In Canadian Insolvency Case Law In 2020 - Insolvency/Bankruptcy/Re-structuring


Bellatrix Exploration Ltd. (Bellatrix) obtained protection under
the
Companies
Creditors Arrangement Act
(Canada) (CCAA). At the time of the CCAA filing, Bellatrix was
party to certain contracts with an energy producer (EP) for the
purchase and sale of natural gas (Contract). Bellatrix sought to
disclaim the Contract and cease delivery of natural gas to the
EP.
The EP argued that the disclaimer notice provided by Bellatrix was
invalid because the Contract constituted an eligible financial
contract (EFC) for the purposes of the CCAA. Under section 32(9) of
the CCAA, a debtor company is not permitted to disclaim contracts
that are EFCs. Pursuant to the express terms of the Contract, the ....

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