In Gidda (Re), 2020 BCSC 121, the Supreme Court of British Columbia affirmed the Crown’s priority as a secured creditor in bankruptcy proceedings, insofar as the registration of a tax debt judgment against the bankrupt’s interests in property is made prior to the bankruptcy order or assignment. The case is an appeal from a decision by a trustee in bankruptcy, who denied the Crown’s entitlement to proceeds from the sale of the Bankrupts’ property following his voluntary assignment into bankruptcy.

In 2016-0628741I7, CRA headquarters was asked by a CRA tax services office whether s. 143.4 would apply in respect of a debt-restructuring plan (the Plan) at a point in time before the unpaid interest owing by the taxpayer was actually settled (forgiven) under the Plan steps.  CRA headquarters answered yes.  The takeaway: this view can potentially result in income in the course of debt restructuring before the debt is actually settled.  Here are the main points:

In Paul L. Schnier v. Her Majesty the Queen, the Tax Court of Canada dismissed the motion brought by the Respondent under Rule 53(3)(c) of the Tax Court of Canada Rules (General Procedure) to quash the appeal on the basis that the Appellant, who was an undischarged bankrupt at the time of filing his Notice of Appeal, had failed to obtain permission of the trustee in bankruptcy at the outset to initiate the appeal.

In Gaumond v. The Queen, 2014 TCC 339, a shareholder forgave his loan to a company as part of the company’s proposal in bankruptcy, which proposal allowed the company to emerge from bankruptcy and continue its R&D activities.  The shareholder claimed a business investment loss (BIL) on the forgiven loan under s.

In 2011-0427101C6 (released this week), the CRA was asked whether a creditor’s acquisition of an interest in a debtor-partnership could qualify as a “seizure” of the debtor-partnership’s property for purposes of s. 79.1. Section 79.1 contains rules (often favorable) for a creditor where the creditor has “seized” property of a debtor as a result of a foreclosure, conditional sale repossession, or similar transaction.