Lenders should be aware that a broad definition of “wages” owing to employees of a borrower/customer in bankruptcy or receivership can take priority over what a lender might otherwise believe is its “first ranking charge” against the borrower.
Canada, British Columbia, Banking, Employment & Labor, Insolvency & Restructuring, Gowling WLG, Wage, Bankruptcy, Debtor, Health insurance, Unemployment benefits, Secured creditor, Bankruptcy and Insolvency Act 1985 (Canada), Supreme Court of Canada
(Judgment 3/2009)
The liquidators of Flightlease (Guernsey) Limited (“FLGL”) applied to the Court for an order that no dividends be paid in the liquidation of FLGL to Flightlease (Ireland) Limited (“FLI”) in respect of guarantees given by
FLGL in respect of FLI’s liabilities. FLI’s liabilities to FLGL were outweighed by the liabilities owed in the opposite direction.
Guernsey, Insolvency & Restructuring, Litigation, Ogier, Dividends, Consideration, Liability (financial accounting), Liquidation