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Receivership application adjourned on conditions that debtor maintain loan payments and provide financial disclosure.
The applicant bank sought the appointment of a receiver over the assets of the respondent debtor, alleging the debtor committed an event of default by providing falsified financial statements from the vendor of a gas station.
The respondents requested an adjournment to cross-examine the bank's affiant, arguing the evidence of the falsified statements was double hearsay.
The court adjourned the application to a date to be scheduled, on the conditions that the debtor remain current on all loan payments and provide the bank with full visibility into its financial and operational information.
Leave granted to pursue claim against receiver despite arguments of frivolousness.
In litigation concerning environmental liabilities associated with the purchase of a paper mill asset from a receivership, the defendant purchaser sought leave under s. 215 of the Bankruptcy and Insolvency Act to pursue a third party claim against the court-appointed receiver for alleged wilful negligence and intentional misrepresentation.
The receiver moved to dismiss or permanently stay the third party claim on the basis that leave had not been obtained and that the claim was frivolous.
Applying the low threshold for granting leave established in the case law, the court held that the pleadings and contractual documents disclosed a sufficient factual basis for the proposed claim.
The court granted leave nunc pro tunc to proceed against the receiver (rather than the receiver’s firm), dismissed the receiver’s motion to stay, and awarded costs to the purchaser.
