Ontario Commercial Court rules proceeds of bia preference action subject to rights of secured creditors

On August 18, 2011, Mr. Justice Morawetz, of the Ontario Superior Court of Justice, released an important decision in regard to preference actions in the matter of Tucker v. Aero Inventory (UK) Limited (together with Aero Inventory plc, Aero).

Background

Filed under:
Canada, Ontario, Insolvency & Restructuring, Litigation, Norton Rose Fulbright, Bankruptcy, Unsecured debt, Legal burden of proof, Secured creditor, Unsecured creditor, Bankruptcy and Insolvency Act 1985 (Canada), High Court of Justice, Ontario Superior Court of Justice, Trustee
Location:
Canada
Firm:
Norton Rose Fulbright Canada LLP
SCC confirms no crown priority for unremitted GST/QST in a bankruptcy

On October 30, 2009, the Supreme Court of Canada released its long-anticipated decision in Quebec (Revenue) v. Caisse populaire Desjardins de Montmagny. At issue in this case (and two companion cases) was the legal characterization of Crown rights with respect to collected but unremitted GST and Quebec sales tax (QST) in the hands of a trustee in bankruptcy. The Supreme Court confirmed that the Crown is an ordinary unsecured creditor with respect to such amounts, subject to the rights of prior ranking security holders.

Summary of Facts

Filed under:
Canada, Insolvency & Restructuring, Litigation, Tax, Norton Rose Fulbright, Bankruptcy, Accounts receivable, Tax deduction, Secured creditor, Unsecured creditor, Bankruptcy and Insolvency Act 1985 (Canada), SCOTUS, Supreme Court of Canada
Authors:
Virginie Gauthier
Location:
Canada
Firm:
Norton Rose Fulbright Canada LLP