Zayed v. Cook, 62 CBR (5th) 114.


Commencement Date: 
12/21/2009
Country, State of Foreign Proceeding: 
United States, District of Minnesota
Canadian Court: 
Ontario Superior Court of Justice
Summary: 
The U.S. District Court on an ex parte motion froze the assets of the respondents, who had allegedly engaged in a massive ponzi scheme, and through a receivership order appointed the applicant as the receiver over all the respondents’ assets in the U.S. (the “Receivership”). The Canadian Court granted an order recognizing the Receivership in Canada as a “foreign proceeding” and recognizing the applicant as foreign representative under Part XIII of the BIA. The Court considered whether a receivership that arose out of an application relating to a U.S. securities violation could be considered as a “foreign proceeding” under Part XIII, given that a “foreign proceeding” must be for the purpose of reorganization or liquidation, pursuant to the wording of the statute. Although the initial focus of the receivership order was on asset preservation in such proceedings involving ponzi schemes, that was only the first stage of a process that would ultimately lead to the liquidation of assets and a distribution to creditors.