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UK Carbon Border Adjustment Mechanism: how will it work?
In February, we reported on the Department of Energy Security and Net Zero’s confirmation that a UK Carbon Border Adjustment Mechanism (CBAM) would be bought into force by 2027
Canada | Publication | May 12, 2020 – 5 PM ET
Remember, first and foremost, to consult the commercial lease to identify the clause that governs this situation, especially since a commercial lease does not terminate simply because a tenant goes bankrupt. Rather, it is the terms of the lease that will allow the landlord to terminate it. From this perspective, a landlord might then benefit from a priority claim to a portion of his rent.*
*It should be noted the solutions suggested in this bulletin only apply in the case of an actual bankruptcy, and not in the context of a proposal under the Bankruptcy and Insolvency Act (BIA) or a restructuring under the Companies' Creditors Arrangement Act. Furthermore, while the BIA is federal legislation, our analysis focuses on its application in Quebec.
In most cases, the landlord is entitled to three months' rent in arrears.
Once the commercial lease is terminated, the landlord may recover up to three months’ rent in the order of priority provided for in the BIA. 1 In fact, the landlord ranks sixth, which means that he can be paid before unsecured creditors, but after secured creditors and other classes of prior claims provided for in the BIA, such as reasonable funeral and testamentary expenses in the case of a deceased bankrupt.
The priority granted to the landlord only applies to the amounts collectible as “rent” and excludes any amount relating to any damage caused by the tenant (for example repair costs).
In addition to the three months’ rent in arrears, the landlord may obtain three months’ accelerated rent (future rent), for a total of six months’ rent.
This additional amount can only be received when it is specifically provided for in the commercial lease. This amount also ranks sixth under the BIA.
However, there is a limit. The total amount received in priority may not exceed the amount that the trustee has realized from the tenant’s property on the leased premises. For the balance of its priority claim, namely the three months of arrears and three months of accelerated rent, the landlord will rank the same as any ordinary unsecured creditor.
Publication
In February, we reported on the Department of Energy Security and Net Zero’s confirmation that a UK Carbon Border Adjustment Mechanism (CBAM) would be bought into force by 2027
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Last November the Financial Conduct Authority (FCA) published Policy Statement 23/16 (PS23/16) containing final rules and guidance on sustainability disclosure requirements (SDR) and investment labels (UK SDR regime).
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International financial markets have started to show significant interest in nature and biodiversity. Whilst climate change and greenhouse gas emissions have made the headlines in recent years, there has been much less focus on their equally important counterparts, nature and biodiversity. However, that has started to change.
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