[updated April 6]
Most of the Courts in Canada and the United States have now announced the suspension of regular court activity and will hear matters on an essential and urgent basis only in accordance with special procedures implemented in the various jurisdictions.
Companies needing protection from creditors or an extension of a stay of proceedings already in place will have to request access to the applicable Court using the procedures outlined by the various jurisdictions. For example, in British Columbia, a request for a hearing of an urgent matter must be made by completing an online Request for Urgent Hearing form and then following the procedures in the request acknowledgement email. Similar procedures apply in Ontario, while in Alberta a telephone call to the number provided in the notice from the Alberta Court of Queen’s Bench is required.
It is important to consider how these emergency procedures may impact your company, including if there are plans to seek Court protection and ongoing Court supervision of matters.
If you are part of a management team or board of a company experiencing financial distress, it is critical that you begin planning immediately. The timely availability of Court orders isn’t guaranteed, and once Court operations begin to return to normal, there is likely to be substantial queue of applications to be heard. Stakeholders may wish to consider out-of-court alternatives to CCAA (a consensual restructuring) if at all possible. Please contact Restructur Advisors for further information and support.
Here is some helpful information and helpful links providing more detail about access to specific Canadian and American courts:
British Columbia
The Court has established the following two-part procedure to facilitate the hearing of essential and urgent matters. First, the applicant will submit a request to the Court for an urgent hearing using an online form. Parties will then submit unfiled materials in order that the Court can assess the urgency of the matter. Second, if the Court determines that the matter is essential and urgent and a hearing is required, the Court will set a date and direct the parties to file their materials electronically in accordance with a modified process.
Whether a request for a hearing is urgent will be determined on a case by case basis; however, as we understand it, a company facing severe liquidity issues and in need of a Court order to address these issues or face bankruptcy may be granted access to a hearing in that situation. An example may be a company on the verge of bankruptcy planning to seek protection under the CCAA that needs a loan to continue operating but cannot be funded for a DIP loan without a Court order. In that regard, we would also note that preservation orders are considered to have a prima facie urgency by the Court.
[note: we expect but do not confirm that this urgency test is similar in other jurisdictions] For companies that aren’t in such dire straits, planning ahead for a hearing when the Courts resume normal operations would serve well. As you can imagine, when Courts do resume normal operations, there will be a back log of cases seeking the Courts’ attention. If parties are able to prepare and circulate materials, consent to certain applications or orders and otherwise move a matter as far along as possible beforehand, it may speed up the process for a hearing before a Court. The Supreme Court of British Columbia has also provided guidance on the commissioning of affidavits in circumstances where it is not possible or is medically unsafe for the deponent to physically attend before a commissioner. Examples might include deponents who are unable to leave their residences, are not permitted to receive visitors, or are required to self quarantine. This and other information can be found on the Court’s website at https://www.bccourts.ca/supreme_court/.
Specific provisions regarding insolvency/bankruptcy court protection proceedings:
The Supreme Court of British Columbia has amended its list of essential and urgent matters that it will hear while normal court operations are suspended to include the following essential and urgent insolvency matters: (a) shareholder disputes or oppressive conduct that may require some immediate relief under the CBCA/BCA (b) applications for an interim and/or final order for an arrangement under the CBCA/BCA (c) the appointment of a liquidator, receive, interim receiver or receiver-manager under the CBCA/BCA/BIA/Law and Equity Act of BC (d) applications for a bankruptcy order under the BIA (e) applications for an initial order under the CCAA or the extension of a stay of proceedings under the CCAA (f) applications for relief specific to restructuring procedures in a context of proceedings under the BIA or CCAA, such as authorization of a sale of assets, interim financing, claims process orders, adjudication of claims, meeting orders and sanction orders and (g) time-sensitive applications in a foreclosure proceeding, such as approval of a sale. The Court has also established procedures to allow for parties to request the hearing of essential or urgent insolvency matters that adds a paper process in addition to the online process previously established. The paper process is to be used if it is not possible to use the online process. For example, if a court file is sealed, the online process cannot be used and paper filings will be necessary. In addition, there is a size limit of 10MB for documents submitted through CSO or email, which may require documents to be sent in stages or filed by the paper process. In both processes, a judge will first review the applicant’s unfiled materials to determine if a hearing is required. If the judge determines that a hearing is required, the Court will give directions to both the applicant and the respondent(s) to provide filed materials for the hearing. Under the paper process, the party requesting a hearing completes a paper copy of the Online Request Form. Paper copies of the Request Form are available at every Supreme Court registry and are located next to the drop box inside the courthouse. If possible, the party must provide a telephone number and/or email address at which they may be reached. The party making the request sends the Court the completed Request Form along with: (a) an unfiled draft appropriate form of application which identifies what orders the party is seeking, and (b) an unfiled draft affidavit which sets out the key facts, describes the urgency, and if applicable, states whether the opposing party has been notified of this request for an urgent hearing. The completed Request Form, draft application, and draft affidavit must be sent together to the Court in one of the following ways: (a) by using the drop box located at the nearest Supreme Court registry or (b) by mailing it to the nearest Supreme Court registry or (c) by faxing it to one of the designated registries set out in the notice. A judge will review the Request Form, unfiled application, and draft affidavit submitted by the party requesting a hearing (either by way of the online process or the paper process) and will determine whether an urgent hearing is required. The judge’s determination of whether or not a hearing is required will be communicated to all parties. If the judge determines that a hearing is required, the Court will schedule a date for the hearing. The Court will provide directions to all parties about filing and service of materials for the hearing. Parties will appear at the hearing by telephone where possible and appropriate or by video where appropriate and available.
Alberta
To help contain the spread of COVID-19, the Alberta Court of Queen's Bench is limiting hearings to emergency or urgent matters only. Emergency matters are those in which serious consequences to persons or harm to property may arise if the hearing does not proceed, or if there is a risk of loss of jurisdiction or expiration of an existing protection. This includes as a first priority, preservation orders, and as a second priority, urgent or time sensitive commercial matters where there are immediate and significant financial consequences which may result if there is no judicial hearing.
Ontario
To protect the health and safety of all court users and to help contain the spread of the 2019 novel coronavirus (COVID-19), the Superior Court of Justice (SCJ) is suspending all regular operations, effective Tuesday, March 17, 2020, and until further notice.
All criminal, family and civil matters scheduled to be heard on or after Tuesday March 17, 2020 are adjourned. This includes all telephone and video-conference appearances scheduled prior to March 17, 2020, unless the presiding judicial officer directs otherwise. Lawyers and litigants with matters scheduled on or after March 17, 2020 are advised not to attend the courthouse.
The Court will continue to hear urgent matters during this emergency period. The Court plays a fundamental role in our constitutional democracy. Access to justice for the most urgent matters must always remain available. This Notice identifies the urgent civil and family matters that shall be heard during the suspension of operations, and the process for bringing such matters before the Court.
Canada
"At the Canadian Judicial Council, we understand that the rapid developments surrounding COVID-19 are deeply concerning. Canada’s Chief Justices are actively working to limit the spread of the virus at their respective courts in order to protect all citizens. Canadians can be assured that the justice system continues to function on their behalf and the rule of law prevails. That said, all courts are taking measures to adapt as required. Canadians who are engaged in judicial events, are encouraged to consult their respective court website before attending any court matter."
The Right Honourable Richard Wagner, C.P.
Chief Justice of Canada
Court Websites with Information for Canadians (updated as of March 30, 2020)
United States -- From Law360 (updated regularly)
As courts across the United States take measures to prevent the spread of the coronavirus, some are restricting access and altering their procedures. Here is a roundup of changes. This list will be updated continually by Law360 with new information.
Europe -- From Law360 (updated regularly)
As courts across the UK and EU take measures to prevent the spread of the novel coronavirus, some are restricting access and altering their procedures. Here is a roundup of changes which will be updated continually by Law360 with new information.