The Globe & Mail reports that independent boutique
investment banking firms are taking aim at the corporate lending
practices of Canadian banks and their affiliates. The compliant is
that they say the need by corporate borrowers to access operating
lines of credit is being used by banks to ensure that the banks and
their subsidiaries get first dibs on the investment banking
business of corporate clients. OSFI is reported as having expressed
the view that, from a prudential stand point, banks should be as
diversified as possible. Boutique investment bankers say that
diversity is being exploited through tied selling practices that
are pushing them out of contention for the most lucrative deals.
Tied selling is regulated both under the Competition Act
and the Bank Act. With increasing competition in financial
services markets, and challenging financial conditions, we will
likely see in the coming weeks if the complaints of boutique
dealers are all bark or will come with bite. For the full article
see "Bay Street's brewing war over corporate
lending", Globe & Mail, March 1, 2016.
The only PPSA registration the bank holds against our borrower expired without having been renewed. Is it possible for the bank to file a late renewal and regain its first priority position against the borrower's other secured creditors?
Most secured lenders have the benefit of a full slate of negative covenants in their formal loan and security documents to restrict the actions of their borrower that might jeopardize the borrower's ability to repay the loan.
Guarantors beware: the Court of Appeal, in The Toronto-Dominion Bank v Konga,1 held that the guarantor was required to pay in response to a demand for payment pursuant to a guarantee, even where the debtor corporation had not failed to make a payment under the loan agreement.
The Ontario Divisional Court recently provided guidance with respect to excluding co-parties from each other's examination for discovery. In Lazar v TD General Insurance Company, the defendant sought to examine the plaintiffs (a married couple) individually, outside the presence of the other.
A recent Ontario Divisional Court decision, CIBC Mortgages Inc. v Computershare Trust Company of Canada, confirms that a mortgage lender may lose priority if their mortgage is fraudulently discharged by the mortgagor.
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