The Alberta Court of Appeal recently released its decision with respect to the appeal of Brookfield Bridge Lending Fund Inc. v. Vanquish Oil and Gas Corporation and has rekindled discussion as to the risks associated with an Operator’s right to commingle his own general funds with trust funds held for the benefit of Joint Operators.

Facts

Often, when creditors start to take action against a debtor, the debtor will seek relief through the Bankruptcy and Insolvency Act(i). Some Trustees in bankruptcy even advertise that the bankruptcy process can be an important step on the road to “financial well being”. Creditors, upon receiving notice of their Debtor’s bankruptcy, may feel that the chance of any recovery all but disappears with the assignment into bankruptcy.