Section 38 of the Bankruptcy and Insolvency Act: How Creditors Can Pursue Claims When Trustees Refuse

Taylor Wilcox of McKercher explains that section 38 of the BIA is a key creditor remedy allowing court-authorized creditors to pursue estate claims when a trustee declines, at their own cost and risk, with recoveries applied first to their claim and costs and any surplus flowing to the estate, thereby preserving potential value, maintaining collective fairness, and preventing viable causes of action from being abandoned.

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