Philip Gaidy and Judy-Kae McLeod v. Chrysler Financial Services Canada Inc. CV-09-095088-00 (S.C.J.) (Lauwers, J.)

Gaidy leased a 2007 Dodge truck from Chrysler Financial (“CF”) as lessor. McLeod entered into a conditional sales contract for a 2006 Hummer with CF as vendor.

Both were chronically late in payment and hid the vehicles. CF recovered the vehicles. Both applied to court to force CF to allow them to re-instate their agreements under s. 66(2) of the Personal Property Security Act (“PPSA”).

Caisse populaire Desjardins de l’Est de Drummond v. Canada, 2009 SCC 29 (Can LII) (S.C.C.); on appeal from 2006 FCA 366 (Can LII)

The Caisse granted Camvrac a line of credit of up to $297,000. Camvrac deposited $200,000 with the Caisse subject to a “Security Given Through Savings” agreement (the “Savings Agreement”) and agreed:

(i) to have the $200,000 on deposit as long as the line of credit was outstanding; and

Re Ted LeRoy Trucking Ltd. and 383838 B.C. Ltd. (2009), 52 C.B.R. (5th) 225, 2009 BCSC 41 (B.C.S.C.)

Ted LeRoy Trucking Ltd. obtained protection under the CCAA and PriceWaterhouseCooper was its monitor. The debtor tried to restructure and failed, and was assigned into bankruptcy with PriceWaterhouseCooper as its trustee.

National Leasing Group Inc. v. Raymond Veterinary Clinic Ltd., [2009] A.W.L.D. 2017, 2009 ABQB 219 (Alta. Q.B.)

The Lessor leased specialized medical equipment to the corporation and three individuals as lessees. The veterinary clinic failed and closed its doors.

TD Bank v. Dunn-Rite Cattle Corp. [2009] A.W.L.D. 2075; 2009 ABQB 227 (Alta. Q.B.), on hearing of issue from (2006) 26 C.B.R. (5th) 1 (Alta. C.A.)

The master granted TD priority to the subject cattle ahead of the Dunns’ lien pursuant to the since repealed Livery Stable Keepers Act. The Dunns appealed to the Alberta Court of Appeal, which allowed the appeal and because of sparse evidence, directed the matter of priority be heard by the Court of Queen’s Bench.

Some of the customers of Farepak, the failed Christmas hamper company that went into liquidation with BDO Stoy Hayward some three years ago, will apparently soon receive their first dividend cheques out of the insolvency. Perhaps even in time for Christmas 2009!

The High Court in England has made an interesting decision in the case of ED Games Limited. A director of that company procured that it did not pay VAT for a period prior to its liquidation and in that period, the net deficit on the company's balance sheet increased. The High Court has held that the director could be held personally liable for the increase in such net deficit.

If you are interested in submitting a bid to buy assets from a Court appointed receiver in Ontario and there is a Court approved sales process, then it is important to submit your bid as part of that Court approved sales process. A bid tendered outside the sales process time line and procedure (even if it turns out to be the highest bid) will generally end up being a losing bid.

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.

Implementation of the Bankruptcy and Diligence etc (Scotland) Act 2007 continues apace. 22 April 2009 saw the most recent instalment with the passing of Commencement Order NO.4 including Parts 5 and 10 of the Act: namely the parts relating to inhibition, arrestments in execution and actions of furthcoming.

Part 5 - Inhibition