The Changing Face of Restructuring in Canada: Reverse Vesting Orders and Judicial Discretion

• Author / Creator

  Olusegun, Victor Oreofe

• Reverse Vesting Orders (RVOs) have emerged as a crucial restructuring tool for financially distressed companies in Canada. RVO transactions involve the sale of a debtor company's shares to a purchaser, and the bifurcation and transfer of unwanted assets and liabilities into another corporate entity. The purpose of this transaction is to ensure that the business of the debtor company is able to be restructured as a going concern operation. RVOs offer distinct advantages, particularly in preserving valuable assets of the companies, including non-transferable licenses, permits, intellectual property and tax losses.
  Despite their increasing popularity, the absence of statutory regulation leaves RVOs governed solely by case law. Thus, courts have developed and administered the RVO restructuring process by exercising judicial discretion. Unfortunately, the administration of RVOs through judicial discretion has raised concerns regarding the jurisdictional authority to approve RVOs in various circumstances, the factors for courts to consider when approving RVOs and the treatment of the interests of stakeholders who could be affected by the court-granted RVO.
  This thesis advocates for the codification of RVOs within the Companies' Creditors Arrangement Act (CCAA) and the Bankruptcy and Insolvency Act (BIA) to address these challenges. By providing a statutory framework, Parliament can enhance certainty, transparency, and stakeholder protection within the restructuring process.

• Subjects / Keywords

  • Restructuring
  • Reverse Vesting Order
  • Judicial Discretion
  • Insolvency
  • RVO

• Graduation date

  Fall 2024

• Type of Item

  Thesis

• Degree

  Master of Laws

• DOI

  https://doi.org/10.7939/r3-atc3-xe33

• License

  This thesis is made available by the University of Alberta Library with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.