A summary of recent Canadian insolvency-focused court decisions.
When will the court refuse to apply the corporate attribution doctrine? Golden Oaks was a Ponzi scheme operating in Ottawa between 2009 and 2013. It was publicly advertised as a “rent-to-own” business, but was promoted to certain individuals as a way to turn a quick…
Does a single creditor need to prove special circumstances to petition a debtor into bankruptcy? The Creditor held a judgment against the Debtor in the amount of $488,871.04 plus costs and post-judgment interest. Despite the Creditor’s demand for payment, the Debtor paid nothing. On August…
Does a debtor have an appeal as of right from a receivership order? KingSett advanced a non-revolving demand loan to 30 Roe of $1.875 million, which was secured, in part, by a second mortgage on nine residential condominium units owned by 30 Roe in a 397-unit…
How is reasonable notice calculated where an employee is fired then rehired immediately after a court-approved sale under the CCAA? The appellant was a technology company operating in the air travel space. The respondent first started her employment with the appellant in July 2011 as…
What factors are relevant to the approval of a proposal trustee's fees in the absence of time dockets? The trustee applied for taxation of its Statement of Receipts and Disbursements for fees of $9,973.46 plus HST. The taxation raised the issue as to how a…
What is the limitation period in a case where it is alleged that a creditor is liable for a debtor's insolvency? Bluberi is a Canadian gaming company that specialized in the development and sale of casino games. From 1994 to 2012, Bluberi focused on selling its technology…
Can a party be forced to mediate its claim as part of a CCAA proceeding? The Petitioners owned and operated a pulp mill in Pictou County, Nova Scotia. On January 31, 2020, the Petitioners were required to shut down the mill, resulting in a complete cessation of their business…
What is the test for a stay extension that is opposed? The Petitioner, 1057863 B.C. Ltd., a British Columbia company, was the parent company of the other Petitioners. Together, the group operated a pulp mill in Pictou County, Nova Scotia. They also conducted related forestry…
Can rising real estate prices impact a bankrupt's discharge? The Debtor filed an assignment in bankruptcy in October 2019. He was the sole registered owner of a residential property that he valued at $635,000. His secured debt totaled over $590,551.75. Based upon these assessments, as of…
Is a receiver bound by an arbitration clause in an agreement it wishes to sue on? Mundo Media (“Mundo”), a company which carried on business in Canada and the US, was placed in receivership in April 2019. The appointment order authorized the Receiver to exercise…