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The court dismissed the BIA and FCA claims, finding the share transfer was an arm's-length transaction for fair value without fraudulent intent.
The plaintiff, 1085372 Ontario Limited, brought an action under the Bankruptcy and Insolvency Act (BIA) and the Fraudulent Conveyances Act (FCA) to set aside a transfer of shares in Linus Entertainment Inc. from Michael Shumak to Geoff Kulawick.
The plaintiff alleged the transfer was at undervalue or a fraudulent conveyance.
The court found that the parties dealt at arm's length, the transaction occurred outside the one-year clawback period under the BIA, and the transfer was not at undervalue.
Furthermore, the court found no fraudulent intent on the part of Shumak and that Kulawick acted in good faith and paid good consideration.
The action was dismissed.
