The applicants, companies engaged in leasing motor vehicles and equipment, sought a declaration that the Bulk Sales Act did not apply to a proposed asset securitization financing transaction involving the periodic sale of leases and related equipment to a special purpose vehicle.
The transaction was designed to raise operational financing while the applicants continued operating their businesses.
The court examined the purpose and scope of the Bulk Sales Act and the definition of a "sale in bulk".
It held that the proposed transaction constituted an ordinary-course financing technique and did not amount to a sale of assets out of the usual course of business.
Accordingly, the Act did not apply to the transaction.
