Journal of
Corporate
Renewal
Sept
2016
continued on page 14
In response to heavy criticism from
the industry, the AER softened its
stance with respect of the new LMR
requirements. On July 8, the AER
released Bulletin 2016-21, which
relaxed the AER’s stated position in
Bulletin 2016-16. The current policy
is that the AER will look at proposed
deals on a case-by-case basis and may
allow a licence transfer to occur when
a transferee can provide evidence that
it will be able to meet its obligations
throughout the life cycle of energy
development of its assets with an LMR
of less than 2.0. Contrary to the AER’s
stated goal of protecting the public, the
new LMR policy will most likely result
in an increase of orphan properties.
To increase the number of prospective
bidders, ensure the integrity of sales
processes, and maximize the value
of debtors’ assets, court-appointed
receivers and trustees may be forced
to disclaim all licenced assets that
could negatively impact a potential
purchaser’s LMR. The court in
Redwater expressly recognized the
right of a receiver to disclaim or refuse
to take possession of a debtor’s property
pursuant to section 14.06 of the federal
Bankruptcy and Insolvency Act (BIA)
and paragraph 3(a) of the Alberta
Template Receivership Order, when the
necessary prerequisites have been met.
As a result of Redwater, creditors
have begun to request language in
receivership orders that specifically
recognizes the right of receivers
to disclaim assets, even though
the receivership order in Redwater
contained no such provision.
Section 3(a) of the template reads:
The Receiver is hereby empowered
and authorized, but not obligated, to
act at once in respect of the Property
and, without in any way limiting
the generality of the foregoing,
the Receiver is hereby expressly
empowered and authorized to do any
of the following where the Receiver
considers it necessary or desirable:
(a) to take possession of and
exercise control over the
Property and any and all
proceeds, receipts and
disbursements arising out
of or from the Property;
In the receivership order of Chinook
Pipeline Inc. et al, section 3(a) was
altered to recognize a receiver’s right
to take possession of only specific
property of a debtor (emphasis added):
(a) to take possession of and
exercise control over the
Property or any part thereof and
any and all proceeds, receipts
and disbursements arising
out of or from the Property;
In the consent receivership order of
Northpoint Resources Ltd., section
3(a) of the template was amended to
read as follows (emphasis added):
(a) to take possession of and
exercise control over the
Property and any and all
proceeds, receipts and
disbursements arising out
of or from the Property and
the Receiver shall be entitled
to disclaim, abandon, or
renounce the Debtor’s interest
in any of the Property;
In spite of changes to the template
being granted in those orders, the
AER recently opposed the Northpoint
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