1. MAXIMIZING RECOVERY FROM INSOLVENT CUSTOMERS
Presented by:
Gordon Plottel, Miller Thomson LLP
Craig Mills, Miller Thomson LLP
Nicole Taylor-Smith, Miller Thomson LLP

2. Agenda Life Cycle of Insolvent Customer File
National/Provincial aspects
Stakeholders in Insolvency Scenarios
Interactive

3. Default under Equipment Leases
Demand letter
Notice under s. 244 of Bankruptcy and Insolvency Act (BIA)
Other prescribed notices (Farm Debt Mediation Act)
Commercial reasonableness

4. Tips for proper registration at the Personal Property Registry
Where to register
Description of collateral

5. Forbearance Agreements
Purpose
Tool to shore up security or to improve position

6. Seizure of Collateral (outside formal insolvency proceeding)
Steps (each jurisdiction different)
Seize or Sue (consumer goods)
Liquidation
Commercial reasonableness
Avoiding improvident realization claims

7. Priorities Purchase Money Security Interest (PMSI) CRA deemed trust
Repairer (garage keeper) liens

8. Guarantors Preserving claims against guarantors
Common defences and how to avoid
Duress, misrepresentation and undue influence
Improvident realization
Dealings with principal debtors

9. Formal Insolvency Proceedings
Bankruptcy
Receivership
Formal Restructuring
Companies’ Creditors Arrangement Act (CCAA)
BIA Proposals

10. Bankruptcy and Equipment Leases
Basic process
Participation for unsecured deficiency claims and unprotected security claims
Use of trustee’s investigatory powers
Use of trustee to attach real security
Reordering of priorities

11. Receivership and Equipment Leases
Dealing with Receivers
Understanding Receivership orders
Recovering leased equipment for Receiver
Participating in a receiver’s sale – assignment of lease
Disclaimer of contracts

12. BIA Proposals
Stay of proceedings
Process
Role of trustee

13. CCAA Restructuring
Stay of proceedings
Process
Role of monitor

14. Allocation of Insolvency Costs
Responsibility of equipment lessors for costs
Types of costs:
Receiver / admin cost
Receiver borrowing / DIP financing
Other charges (D&O, Critical Suppliers, etc.)
Methodology of cost allocation

15. Tips and Takeaways Monitor customers regularly
Limit new exposure
Develop contingency plan
Become involved in formal proceedings:
Contact Monitor / Trustee / Receiver (service list)
Monitor reports and ask questions
Make your views regarding the equipment known

16. Tips and Takeaways (cont’d)
Seek to inspect equipment as soon as possible and consider your position
Verify equipment will be maintained/repaired
Obtain independent appraisals
Do not assume you will continue to be paid
Assert priority and demand payment for use of equipment

17. Questions?

18. Contacts Gordon Plottel Craig Mills Nicole Taylor-Smith
Direct line:
Craig Mills
Direct line:
Nicole Taylor-Smith
Direct line: