doing business in canada - Davies Ward Phillips & Vineberg LLP

INTERNATIONAL BANKRUPTCYASSETS LOCATED IN FOREIGN JURISDICTIONOrders of Canadian courts are usually effective only in Canada. Therefore, in order for the assets of a Canadianinsolvent debtor located in a foreign jurisdiction to be subject to the stay of proceedings in a Canadianinsolvency, it would be necessary for the Canadian court to request a court in the jurisdiction of the assets toissue a parallel stay order or a parallel insolvency proceeding to facilitate the Canadian proceedings. While it isfairly common for such parallel proceedings to be initiated, where Canadian insolvent debtors have significantassets in other jurisdictions, the great majority of such parallel proceedings have involved only Canada and theUnited States.CANADIAN COURT RECOGNITION OF FOREIGN PROCEEDINGSCanadian insolvency legislation provides for the jurisdiction of Canadian courts to recognize foreign insolvencyproceedings. Canada has adopted the UNCITRAL Model Law on Cross-Border Insolvency in this regard.However, the approach differs from that of other countries and there are some important differences that areunique to Canada.The recognition of foreign proceedings does not deprive the Canadian court of jurisdiction in the event thatthere is a fairness or equity issue. As a result, even to the extent that a Canadian court recognizes a foreignproceeding, that foreign proceeding must treat Canadian creditors and assets in a manner consistent withCanadian legal standards.Bankruptcy and Insolvency Proceedings 77