Insolvency legislation is full of trade-offs—chief among them is expediency versus fairness. On the one hand, insolvencies are often urgent matters with the fate of the debtor’s business or the value of its assets resting on a speedy and efficient resolution of its creditors’ claims. On the other hand, those creditors expect to be treated fairly and receive a real opportunity to advance and resolve their claims, which often entails a slow, deliberate process.

Where an individual is both a corporate director and a shareholder, can they be held personally liable for stripping value from a corporation to defeat corporate creditors? “Yes”, according to the Court of Appeal for Ontario’s recent decision in FNF Enterprises Inc. v. Wag and Train Inc, 2023 ONCA 92. But what is the legal basis for imposing personal liability for the corporation’s obligations?