Determining the Centre of Main Interest in Corporate Group CCAA Filings

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A number of commentators have written articles about Part IV of the Companies’ Creditors Arrangement Act (CCAA), which deals with recognizing and enforcing foreign insolvency proceedings, however little has been written about the treatment of corporate groups in this context. Part IV of the CCAA deals with entities on an individual basis, and how to deal with corporate groups is not well addressed in international insolvency legislation. In the recent case involving the Part IV filing of the Elephant & Castle group of companies (collectively, “E&C”), the Ontario Superior Court of Justice (the “Ontario Court”) had a chance to address the concept of a corporate group filing.

On June 28, 2011, E&C commenced proceedings (the “Chapter 11 Proceedings”) in the United States Bankruptcy Court for the District of Massachusetts Eastern Division, under Chapter 11 of Title 11 of the United States Code. The purpose of the Chapter 11 Proceedings was to allow E&C to continue to operate in the ordinary course while it pursued the sale of its business. E&C operates and franchises authentic, full-service British style restaurant pubs in both the United States and Canada. Concurrently with the Chapter 11 filing, E&C also sought recognition of the Chapter 11 Proceedings in the Ontario Court as a “foreign main proceeding” under the CCAA.

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