A secured creditor applied under the Bankruptcy and Insolvency Act and the Courts of Justice Act for the appointment of a receiver and approval of a “quick flip” sale of the debtor’s assets to a related purchaser.
The secured creditor, debtor, and purchaser shared common ownership.
The court held that the evidentiary record was insufficient to justify the appointment of a receiver or approval of the proposed sale, particularly given the related‑party nature of the transaction and the timing of the security granted while the debtor appeared insolvent.
The court found inadequate evidence concerning the validity of the security, the fairness of the sale process, and the valuation of the assets.
In the absence of evidence demonstrating that a court‑appointed receiver was necessary or that the proposed transaction was fair to stakeholders, the application was dismissed without prejudice to re‑apply on better evidence.
