Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.
Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.
In In re KB Toys,1 a recent decision by the Third Circuit Court of Appeals, the Court held that a claim that is disallowable under § 502(d)2 if held by the original claimant is also disallowable in the hands of a purchaser or subsequent transferee. In other words, if a creditor sells or assigns its claim to a claims trader and the creditor later becomes liable on a preference or fraudulent transfer,3 the claim may be disallowed in the hands of the claims trader if the creditor fails to pay the amount it owes to the estate.
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Introduction