The trustee in bankruptcy of two related entities sought an order authorizing procedural and substantive consolidation of their bankruptcy estates.
The entities consisted of a general partner corporation and a limited partnership that operated within a broader group providing air medical transport services in Ontario.
The court considered the relationship between the entities under the Bankruptcy and Insolvency Act and the Limited Partnerships Act, noting that the general partner’s unlimited liability and s. 85(1) of the Bankruptcy and Insolvency Act resulted in the partnership’s assets vesting in the trustee upon the general partner’s bankruptcy.
The court found that consolidation would improve administrative efficiency, avoid duplication in estate administration, and prevent unnecessary disputes regarding creditor claims and allocation of professional fees.
Concluding that no creditors would be prejudiced, the court granted both substantive and procedural consolidation of the estates.