Michael Myers of Papazian Heisey Myers dives back into his analysis of transfers at undervalue, explaining the difficulties a trustee or creditor can be expected to face when attempting to prove fraudulent intent on the part of the (now bankrupt) debtor.
A curation of recent Canadian insolvency-focused articles.
Michael Myers of Papazian Heisey Myers wonders why, in at least one recent decision, the Ontario Superior Court refused to even look at the Transfer at Undervalue provisions in the BIA and permitted a spouse to retain her share of a matrimonial home that was given to her for no consideration by a debtor less than one year before the debtor's petition into bankruptcy, stressing that Section 96 of the BIA does not differentiate between 'family assets' and 'non-family assets.'
Michael Myers of Papazian Heisey Myers argues that the BIA's definition of Transfer at Undervalue is awkwardly drafted and explains how it can become challenging for a trustee or creditor to determine if a transaction can be impugned.
Michael Myers of Papazian Heisey Myers reminds readers that "a debtor must be just before he can be generous" as he outlines the purpose of the BIA Transfer at Undervalue provisions and explains how they differ from provincial statutes such as Ontario's Fraudulent Conveyance Act
Michael Myers of Papazian Heisey Myers notes that trustees and creditors appear reluctant to bring transfer at undervalue litigation and wonders if it is because it is not yet widely appreciated that the courts are empowered to void a transaction at undervalue even when there was no fraudulent intent on the part of the bankrupt transferor.
Rachel Bengino of TGF explains why the Court recently refused to recognize in Canada the debtor-in-possession financing facility granted to Payless Shoes in its US Chapter 11 proceeding.