A summary of recent Canadian insolvency-focused court decisions.
When will the court appoint representative counsel in a mass tort insolvency case? The Applicants had claims for damages against the Roman Catholic Episcopal Corporation of St. John’s (the “Corporation”) for abuse by Christian Brothers while they lived at Mount Cashel Orphanage in St. John’s…
What factors will a court consider in determining whether to assign a CCAA debtor into receivership? Otso is a Canadian company that owns a gold mine in Finland. The mine is Otso’s only substantial asset. The petitioners (“Pandion”) loaned money to Otso and its subsidiaries…
Can a creditor annul a consumer proposal on account of ineligibility and fraud? The debtor agreed to purchase a residential property for a purchase price of $2.12 million. The debtor initially paid deposits totalling $250,000. The debtor also executed and delivered to the creditor, Tiffany…
What level of detail is required in reasons for granting a receivership order? The Respondent, HarbourEdge, was a commercial lender. In 2014, it extended funding to Can*Sport for the construction of a development in Bedford, Nova Scotia. Can*Sport’s obligations were personally guaranteed by the Applicant Lee…
What are the rules applicable to the interpretation of a tolling order? Carillion provided year-round routine and preventative maintenance services for approximately 40,000 kilometers of highway across Ontario and Alberta. Carillion had leased premises in Alberta from Weinrich since June 2009. In 2018, the Court…
Can a trustee's fees be disallowed on the basis that the trustee failed to protect the interests of creditors? In February 2019, the Debtors filed assignments in bankruptcy and the Trustee was appointed. Several weeks prior, the Debtors and the Trustee had entered into an…
Does a clause in a guarantee offend the anti-deprivation rule? Javeri sold lands to Windsor Park in 2016. Part of the consideration for the sale was a vendor-take-back mortgage (the “VTB Mortgage”) granted to Javeri. Javeri agreed to subordinate the VTB Mortgage to construction financing.…
What conduct is captured by the phrase “debt or liability resulting from obtaining property or services by false pretences” in s. 178(1)(e) of the BIA? A discharge from bankruptcy releases the insolvent debtor from pre-bankruptcy debts or liabilities, subject to certain exceptions. One exception, under…
Does a bankrupt have the right to inspect the trustee's records? The Bankrupt operated a business as a sole proprietor. He filed for bankruptcy on four occasions since 2004, with the last filing occurring in 2016. The Respondent was the licenced insolvency trustee on each…
What is the law on pre-post compensation under the CCAA? SM Group, a consulting engineering firm, performed a variety of contracts for the City of Montreal over a period of several years. SM Group subsequently became insolvent and two of its former officers were charged with criminal…