The creditors sought to lift a stay of proceedings in bankruptcy to continue a civil action against the bankrupt, Thomas G. Assaly, and to annul his bankruptcy.
The court found that the bankrupt had engaged in a pattern of filings (US Chapter 11, consumer proposal, then bankruptcy) to avoid litigation.
While the consumer proposal ceased to exist upon bankruptcy, the court declined to annul the bankruptcy, finding that the bankrupt's liabilities exceeded his assets, distinguishing it from cases where annulment was granted due to solvency or abuse of process.
The court lifted the stay of proceedings to allow the quantification of provable claims for the purpose of filing a proof of claim in bankruptcy, and also allowed non-monetary claims (declaration of vexatious litigant, and an order restricting future proceedings) to proceed as they are not provable in bankruptcy.
The court also ordered the bankrupt to disclose all worldwide creditors and for the trustee to investigate certain assets.
