Creditors brought a motion under s. 69.4 of the Bankruptcy and Insolvency Act seeking a declaration that the statutory stay of proceedings arising from a proposal no longer applied to their civil action against the debtor.
The underlying action alleged fraud, conspiracy, deceit, and conversion involving the misappropriation of significant funds.
The court held that the creditors would likely be materially prejudiced by continuation of the stay and that equitable grounds justified lifting it, particularly where the alleged debt would likely survive a bankruptcy discharge and the debtor appeared to be delaying the proceedings.
The court also confirmed a previously granted Mareva injunction on a nunc pro tunc basis to preserve assets.
Costs were awarded to the moving parties on a partial‑indemnity basis.