Maggie Sullivan

The decision concerns a motion by creditors Jennifer Look-Hong and Geoffrey MacKay in the bankruptcy of The Aggressive Good Inc. The motion sought, among other things, to challenge the eligibility of Christopher Falconi to act as an inspector and to have his votes at the first meeting of creditors revoked.

The court found that the Trustee made a palpable and overriding error in determining the date Mr. Falconi ceased to be a director, and that Mr. Falconi was not dealing at arm’s length with the debtor within the year prior to bankruptcy.

The court also found that Mr. Falconi was ineligible to act as an inspector due to his involvement in contested actions against the estate.

The motion was granted, and the order was signed as requested, with a new meeting of creditors to be held.

The appellant, a judgment creditor, appealed the dismissal of its application seeking a declaration of fraudulent conveyance and damages for unlawful conduct conspiracy against the respondents.

The appellant alleged that the transfer of shares by the debtor to Capital Dentistry Group Limited was a fraudulent conveyance and part of an unlawful conspiracy.

The Court of Appeal upheld the application judge's finding that there was no fraudulent intent, noting that the transaction was initiated by an arm's length party, structured consistently with past deals, and occurred as part of a larger acquisition.

As fraudulent intent was not established, the essential element of unlawful conduct for the conspiracy claim failed.

The appeal was dismissed, and costs were awarded to the respondents.