A summary of recent Canadian insolvency-focused court decisions.
What is the test for setting aside a bankruptcy order? The Bankrupt was adjudged a bankrupt on the application of Servus Credit Union Ltd. (“Servus”). The Bankrupt applied for an order setting aside the bankruptcy order on the grounds that he intended to contest the…
Are input tax credits on damage payments for agreements disclaimed under section 32 CCAA pre-filing or post-filing claims owing to the debtor and can they be set-off by fiscal authorities against their pre-filing sales tax-related claims against the tax debtor? On January 27, 2015 (the…
What is the test for leave to intervene in an appeal? The Receiver was appointed to manage the assets and properties of Manitok, a bankrupt oil and gas producer. The two Lien Claimants were contractors who performed work on certain Manitok oil and gas well…
When will a court overturn a settlement agreement as a fraudulent preference? Andrew, the appellant Magdalena’s husband, and his brother were the directors and shareholders of a corporation. In 2016, the respondents obtained judgments against the corporation for an amount in excess of $300,000. In…
Can a trustee delegate the payment of proposal dividends to the debtor? The trustee applied to tax its Final Statement of Receipts and Disbursements pursuant to s. 31 of the Bankruptcy and Insolvency Act. The estate had receipts of $69,971.63 and the trustee sought approval of…
In what circumstances will costs be awarded against a trustee personally? The Trustee commenced an action against the Bankrupt, his brother Paul and others, claiming that conveyances of certain properties by the Bankrupt prior to the assignment in bankruptcy should be set aside pursuant to…
Will the court allow modifications to prescribed creditor notifications in CCAA proceedings? MEI was a multi-service food business, which operated six restaurants, two food-hall locations and one gourmet grocery location. It had been experiencing financial challenges for an extended period of time as a result…
Will a court stay a sales process pending arbitration over an interest in the subject real estate? This motion arose out of long-running CCAA proceedings involving a group of companies ultimately owned by Urbancorp. Downsview, being the Foreign Representative of Urbancorp, sought a stay pending its…
Can student loan debt be discharged in bankruptcy? The Debtor successfully completed a consumer proposal under the Bankruptcy and Insolvency Act, and brought an application respecting the discharge of her outstanding student loan debt. Pursuant to s. 178(1)(g)(ii) of the BIA, such a debt is not…
What is the test for a stay pending an appeal in an insolvency proceeding? DGDP applied for a stay of two orders approving the sale transaction of assets and granting the gross overriding royalty from the prospective purchaser to DGDP. Prior to the granting of…