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Vancouver Business Bankruptcy, Insolvency and Restructuring Law Blog

Superintendent's Levy on Secured Claims in Failed Proposal Proceedings

The Manitoba Court of Queen's Bench was recently asked to opine on whether the 5% levy payable in bankruptcy matters to the Superintendent of Bankruptcy pursuant to s. 147 of the Bankruptcy and Insolvency Act ("BIA") was applicable to secured creditors. Secured creditors generally operate outside of bankruptcy proceedings.

Limitation Periods, Proposals and Bankruptcies

On its appointment a trustee in bankruptcy may have the right to initiate various claims on behalf of the estate. Those claims include claims that the bankrupt may have had the right to initiate prior to the bankruptcy, as well as new claims that are unique to the trustee; for example, statutory claims under section 95 (preference claims) or section 96 (claims for transactions at under value) of the Bankruptcy and Insolvency Act (the "BIA").

Defective security agreement found to be enforceable as against bankrupt

The common law provinces each have legislation dealing with the registration of security agreements against personal property. These acts, each of which are named the Personal Property Security Act ("PPSA"), provide a complex but complete code for registering security interests against property, and for determining the priority between various creditors' claims to that property. Proper security can protect a creditor's rights when a debtor goes bankrupt.

Attacking creditor-proofing transactions

Creditors are often frustrated to find that their debtors don't have assets or other means to pay their debts. Even more frustrating is when creditors discover that their debtors did have assets, which have recently been disposed of.

What can creditors do in such situations?

A variety of tools exist to allow "creditor-proofing" transactions to be set aside, depending on the circumstances. Let's look at two.

Full Indemnity Costs in CCAA Proceedings

In a recent case out of the BC Supreme Court, BuildDirect.com Technologies Inc. (Re.) 2018 BCSC 210, the Court was asked to award full indemnity costs to the monitor, the senior lenders and the interim lenders against a party who had been unsuccessful in an application in CCAA proceedings. 

Understanding basic insolvency terms

Too often the basic terms in bankruptcy and insolvency law are used incorrectly and in a way which just makes things more confusing. Even professionals can be guilty of this. If on the other hand you understand the terms, then you will quickly understand the process and be able to identify and analyze the issues that may arise.

BC Court of Appeal provides insights on determining fair market value of assets transferred by bankrupts

The British Columbia Court of Appeal recently provided insight into how a bankrupt's assets will be valued when determining if they were transferred at less than fair market value.

In Randen v HPCB-Online Ltd., 2018 BCCA 123, a chain of bookstores sold about 10% of its book inventory to a related company for approximately $22,000.00, and assigned itself into bankruptcy a few weeks later.

True Lessors Are Generally Exempt From Professional Fee Allocations Under the CCAA

In a recent case from the Nova Scotia Supreme Court Atlantica Diversified Transportation Systems Inc. (Re), 2018 NSSC 77, the court was asked to determine whether a true lessor of numerous trucks and trailers of the debtor, Canadian Western Bank ("CWB"), was liable to contribute to a $75,000 administration charge ordered in Companies Creditors Arrangement Act ("CCAA") proceedings that ended without a restructuring plan in place.

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