Commercial agreements often contains provisions that set out what happens if one of the parties defaults. These provisions, sometimes called "ipso facto" clauses, might give the innocent party the right to end the agreement, or might set out an agreed additional amount ("liquidated damages") that the innocent party can claim as a result of the other party's default.
It is somewhat uncommon for a co-operative to seek protection from its creditors under the Companies' Creditors Arrangement Act, R.S.C. 1985, C. C-36, as amended (the "CCAA") but that is what the beloved Canadian outdoor retailer, Mountain Equipment Co-operative ("MEC"), did in Mountain Equipment Co-operative (Re), 2020 BCSC 1586.
The recent decision in Re Michie, 2020 BCSC 1611, addresses the entitlement of a trustee in bankruptcy to claim its fees and disbursements from property not owned by the bankrupt, in priority to the person entitled to the property, where such property has come into the trustee's possession and control in the course of the bankruptcy.