71 CBLJ 120

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BANKRUPTCY LAW IN CANADA — THE NEXT 50 YEARS: “THE MORE THINGS CHANGE, THE MORE THEY STAY THE SAME”

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Jassmine Girgis

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ABSTRACT 

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Will our bankruptcy regime — when situated in a world of shifting markets, emerging social challenges, and political upheaval — need to change fundamentally to meet new demands?

This article considers this question by asserting two points. First, it predicts that the core objectives of our insolvency regime — avoiding, minimizing and allocating loss while maximizing value — will remain intact and new proceedings will be incorporated into our current regime. But fitting new challenges into an old structure risks relying too heavily on existing understandings and narratives and may fail to recognize where our assumptions no longer align with present realities.

This leads to the second point, that judicial conceptions of the role of public policy in the bankruptcy regime have not evolved in step with changing insolvency proceedings, resulting in an outdated jurisprudential narrative. Public policy, which is deeply intertwined with both the purposes and the processes of bankruptcy law, needs to align with the proceedings taking place. As the goals of our restructuring statute have widened, first encompassing sales as going concerns, then complete liquidations, courts have continued to apply the same restructuring discourse on public policy without considering how its meaning can and should adapt to liquidations.

As proceedings account for changing markets and political upheaval, proper reform to the legal framework depends on accurate descriptions. Judges, as well as scholars, legislatures, and stakeholders, cannot assess whether a legal regime is functioning properly if judicial decisions do not reflect the ongoing changes. Only a narrative that accurately reflects the evolving landscape can ensure our regime is set to go into the next fifty years of bankruptcy law.