The sole surviving executor of an estate improperly loaned estate money to his own company and executed a debenture that was not registered.
After the executor died, the new administrators applied for late registration of the debenture under the Corporation Securities Registration Act.
However, a petition in bankruptcy had already been filed against the debtor company.
The Supreme Court of Canada held that while the executor's misconduct constituted 'sufficient cause' for late registration, the bankruptcy petition vested the company's assets in the trustee.
Section 75 of the Bankruptcy Act did not operate to elevate the estate's unsecured claim to a secured claim after the bankruptcy commenced.
The appeal was dismissed.
