S. Babe

The court-appointed receiver brought a motion to determine entitlement to the proceeds of the sale of a leased truck and past lease payments.

The respondent lessor had trespassed and seized the truck from the receiver without court approval.

The court found that while the lessor remained the owner of the truck and was entitled to past lease payments, its failure to sign a new security agreement or file a financing change statement after the original lessee's bankruptcy rendered its security interest unperfected.

The unperfected interest was subordinate to the receiver and secured creditors, so the lessor was ordered to pay the sale proceeds to the receiver, along with full indemnity costs due to its reprehensible self-help conduct.

The Receiver of Atlas Block Co. Limited moved for approval of the distribution of net sales proceeds from certain assets between two secured creditors, RBC and BDC, and for approval of its allocation of fees and costs.

BDC objected to the distribution, arguing the purchase price allocation in the approved Asset Purchase Agreements undervalued the real property compared to historic appraisals.

The court rejected BDC's objection, noting BDC had not opposed the sale approval motion and the appraisals were dated and less reliable than the market-tested sale price.

The court also approved the Receiver's pro rata allocation of shared costs, finding it prima facie reasonable and noting BDC's delayed objection.

The applicants moved under the Companies' Creditors Arrangement Act for an extension of the stay of proceedings until June 6, 2012.

A successful bid had been selected following a sale and investor solicitation process, and the extension was required to finalize the purchase agreement and seek court approval.

The court found that the applicants had acted in good faith and with due diligence, and granted the extension as the applicants had sufficient interim financing to proceed.