Royalty Interests In Resource Properties May Not Survive Restructuring
HERE is an interesting article by David Gerecke and Jordyn Allan of Miller Thomson.
In summary, royalty holders that believe their resource royalties are an interest in the land and are therefore an obligation of a new owner of the property when acquired through an insolvency proceeding, may find in reality that their interest can be subordinated or eliminated all together.
This risk can be mitigated to some extent if the royalty agreement is drafted to create a secured interest and provide for restrictions on transfers. Have your legal experts review all royalty agreements with this in mind.