Court File and Parties
SUPERIOR COURT OF JUSTICE – ONTARIO [Commercial List]
RE: 7032749 CANADA INC. Applicant
AND:
1998514 ONTARIO INC., 5005070 ONTARIO INC., 5019233 ONTARIO LTD., 5026173 ONTARIO INC., 5032807 ONTARIO INC., 1937777 ONTARIO LTD., 1982360 ONTARIO INC., 1966708 ONTARIO INC., SANCOR HOLDINGS INC., LEADER MEDIA II LTD. AND CARLO LICONTI, ALSO KNOWN AS CARLO LAWRENCE LICONTI Respondents
BEFORE: Justice Jana Steele
COUNSEL: Domenico N. Magisano & Chelsea McKee, for the Receiver, GlassRatner Restructuring Inc. Gustavo F. Camelino, for the Creditor Peng Yu Fan Peter Waldmann, for Alejandro Escobar May Cheng, for Cinema Siete Manish Kshatriya, Self-Represented
HEARD: January 13 and February 20, 2026, with supplemental written submissions March 6, 2026, and April 30, 2026
ENDORSEMENT
1The Receiver brings this motion seeking, among other things, a declaration that certain transfers that were made constitute transfers undervalue and an order that those transfers be repaid. Certain of the transfer recipients object to the Receiver’s request for repayment of the transferred funds.
2Carlo Lawrence Liconti, and/or the various companies he controlled, caused certain payments to be made to the Transfer Recipients (defined below) following the issuance of a tax refund from Canada Revenue Agency to Family Corp. (defined below), one of the respondent companies. The transfers were made despite there being a court order in place that any tax refunds received were to be held in trust.
3The Transfer Recipients were arm’s length from the respondents and were either creditors or service providers to some or all of the respondent entities.
4For the reasons set out below, I have determined that although the transfers were made at undervalue, the circumstances of this case are such that I should exercise my discretion and not require the Transfer Recipients to repay the transferred funds.
5The Receiver’s request for approval of its Reports and professional fees is granted.
Background
6The Applicant, 7032749 Canada Inc., is the administrative agent for a group of lenders. The Applicant provides debt financing to film and television producers.
7The Applicant made loans to the Borrowers (defined below).
8Each of the Borrowers guaranteed the obligations of the others under a Cross Collateralization Security Agreement dated September 11, 2021 (the “Cross-Collateral Agreement”).
9GlassRatner Restructuring Inc. (the “Receiver”) was appointed receiver over the property of 1998514 Ontario Inc. (“Charity”), 5005070 Ontario Inc. (“Apprentice”), 5019233 Ontario Ltd. (“Bordello”), 5026173 Ontario Inc. (“Clive”), 5032807 Ontario Inc. (“Family Corp.”, and together with Charity, Apprentice, Bordello, and Clive, the “Borrowers”), 1937777 Ontario Ltd. (“Skin”), 1982360 Ontario Inc. (“Perpetual”), 1966708 Ontario Inc. (“Beginner’s”, and together with Skin and Perpetual, the “Prior Borrowers”), Sancor Holdings Inc. (“Sancor”), and Leader Media II Ltd. (“Leader”, and together with Sancor, the “Corporate Guarantors”) pursuant to an Order of Black J., dated August 20, 2024 as amended and restated by the Order of Cavanagh J., dated December 23, 2024 (the “A&R Appointment Order”).
10The Borrowers, Prior Borrowers and Corporate Guarantors were controlled by Carlo Liconti. Mr. Liconti was the sole officer and director of each of the Borrowers, Prior Borrowers and Corporate Guarantors.
11Mr. Liconti passed away on or about November 28, 2025.
12The Borrowers and Prior Borrowers were single purpose corporations that were engaged in the production of a film or television program.
13The Corporate Guarantors are engaged in the distribution of film and television productions.
14Prior to the Receiver being appointed, but following the commencement of the application, on or about May 6, 2024, the parties attended a chambers appointment to schedule the application. The court made the following Preservation Order at that appointment:
... in as much as the urgency from the applicant’s side relates to the potentially pending tax credit payment from CRA, I also order if and when the payment is received (respondent’s counsel advises that it has not yet been received) it is to be held in a trust account of the Oslers firm (counsel [at that time] to the respondents).
15On or about December 23, 2024, the Court granted a further Order (the “Ancillary Order”) providing the Receiver with certain additional powers, including the ability to investigate and seek direction on certain transactions which could be considered transfers under value (“TUVs”) or preferential payments under sections 95, 96, 98, 101, 163, and 164 of the Bankruptcy and Insolvency Act, R.S.C, 1985, c. B-3 (the “BIA”).
16The Receiver determined that $525,150 of tax credit funds that were payable to Family Corp were delivered to certain third parties (the “Transfer Recipients”)1 soon after the Preservation Order was made. The transfers were confirmed by Mr. Liconti, who provided the Receiver with a list of the Transfer Recipients and the amounts he transferred to each:
| PAYEE | AMOUNT | FEE | TOTAL |
|---|---|---|---|
| Cinema Siete Inc. | $150,000.00 | $50.00 | $150,050.00 |
| Stephen Chung | $40,000.00 | $50.00 | $40,050.00 |
| Manish Kshatriya | $75,000.00 | $75,000.00 | |
| Peng Yu (Robert) Fan | $90,000.00 | $90,000.00 | |
| Alejandro Escobar | $25,000.00 | $50.00 | $25,050.00 |
| Gallo F | $125,000.00 | $125,000.00 | |
| 223649 ONT | $20,000.00 | $20,000.00 | |
| TOTAL | $525,000.00 | $150.00 | $525,150.00 |
17The transfers to the Transfer Recipients were made in and around May 2024.
18The Receiver asked Mr. Liconti in an email dated October 1, 2024 to explain why the above payments were made “in the face of a court order that required [Mr. Liconti] to pay the full amount of the tax credit over to Osler’s trust account.” Mr. Liconti responded on the same day:
... I don’t want to explain it as it will seem to be contrived and slanted to make me appear right and not wrong. ... [P]lease look at the amounts that were dispersed and you’ll see I did not partake in the receipt of a single penny as I only cared that those few were compensated for approximately 3 years without their invested funds and in essence gave free labour to EPC.
19The Receiver’s position is that the above transfers were made in contravention of the Preservation Order.
20On or about February 14, 2025, the Receiver’s counsel wrote to each of the Transfer Recipients advising that it believed the Transfers were preferential payments pursuant to section 95 of the BIA and demanded repayment.
21The applicant is a secured creditor of Family Corp in the amount of approximately $3.5 million, as set out in the Receiver’s First Report. The applicant is a collection of individual investors.
22Three Transfer Recipients, Peng Yu (Robert) Fan, Alejandro Escobar, and Manish Kshatriya filed materials in advance of the motion objecting to the Receiver’s request for the repayment of the transferred funds they had received. These Transfer Recipients appeared and made oral submissions to the court. They also filed written supplemental submissions at the court’s request.
23Another Transfer Recipient, Stephen Chung provided a letter in which he stated, among other things, that he requested a dismissal of the Receiver’s request for relief from him.
24At the appearance on January 13, 2026, Mr. Cristian de la Rosa, who indicated that he is the sole shareholder and director of Cinema Siete Inc. (“Cinema Siete”), attended and made brief oral submissions. After hearing from Mr. de la Rosa, I determined that evidence from Mr. de la Rosa was required. Accordingly, the motion was adjourned to February 10, 2026 to provide time for materials to be delivered. At the return, Cinema Siete was represented by counsel, and had filed materials.
25As noted by the Receiver, in its Second Report, certain of the Transfer Recipients responded to the Receiver’s demand. The Receiver stated: “While various issues were raised by the Transfer Recipients, a common theme in the responses was that Family Corp was not indebted to the Transfer Recipients, and that the Transfers were paid in settlement of obligations of other entities related to Liconti.”
Analysis
26A receiver is not routinely granted the wide investigative powers, rights, and remedies available to a BIA bankruptcy trustee. Cavanagh J., in granting the Ancillary Order, stated at para. 7 of his endorsement:
In a court-appointed receivership, a receiver is not routinely granted the investigative powers, rights and remedies available to a trustee in bankruptcy pursuant to the BIA. It is open to a receiver to seek expanded powers, and for the Court to grant expanded powers, where it is satisfied that such powers are reasonably necessary for the receiver to exercise its powers and authority and discharge its mandate under the existing appointment order.
27Cavanagh J. further indicated, at para. 9 of his endorsement, that he was satisfied “in these circumstances, based on the Receiver’s First Report” that the Receiver ought to be granted the expanded powers requested. Paragraph 2 of the Ancillary Order provides for the following expanded powers:
THIS COURT ORDERS that the Receiver shall be authorized, but not obligated to, exercise investigative powers, rights, and remedies available to a trustee in bankruptcy pursuant to the following sections of the BIA: a) Section 95 – Preferences; b) Section 96 – Transfers at undervalue; c) Section 98 – Recovering proceeds if transferred; d) Section 101 – Inquiry into dividends, redemption of shares or compensation; e) Section 163 – Examination of bankrupt and others by trustee; and f) Section 164 – Trustee may require books and property of bankrupt be produced.
Should the Court declare that the Transfers are void as against the Receiver and ought to be returned to the Receiver?
28Initially, as set out above, the Receiver had relied on both sections 95 and 96 of the BIA. At the motion, the Receiver indicated that it was no longer relying on section 952 of the BIA.
29Section 96(1) of the BIA provides:
On application by the trustee, a court may declare that a transfer under value is void against, ..., the trustee – or order that a party to the transfer or any other person who is privy3 to the transfer, or all of those persons, pay to the estate the difference between the value of the consideration received by the debtor and the value of the consideration given by the debtor – if a) The party was dealing at arm’s length with the debtor and i. The transfer occurred during the period that begins on the day that is one year before the date of the initial bankruptcy event and that ends on the date of the bankruptcy, ii. The debtor was insolvent at the time of the transfer or was rendered insolvent by it, and iii. The debtor intended to defraud, defeat or delay a creditor; or b) The party was not dealing at arm’s length with the debtor and [...]4 [Emphasis added.]
30As discussed further below, s. 96 of the BIA grants the court the discretion to declare that a TUV is void, or order that the difference between the value of the consideration given and the value of the consideration received be repaid if certain conditions are met.
31I first consider whether there was a “transfer at undervalue” and whether the conditions set out in s. 96 have been met. Second, I consider whether the court should exercise some discretion with respect to the Transfers.
Was there a “transfer at undervalue”?
32The Court must first ascertain whether there was a “transfer at undervalue.” The BIA defines “transfer at undervalue” to mean “a disposition of property or provision of services for which no consideration is received by the debtor or for which the consideration received by the debtor is conspicuously less than the fair market value of the consideration given by the debtor:” s. 2, BIA.
33As stated by Myers J. in National Telecommunications Inc. (Re), 2017 ONSC 1475, 45 C.B.R. (6th) 181, at para. 30, “the first question for resolution is whether the bankrupt disposed of property for no consideration or for conspicuously less than the fair market value of the property.”
34The Transfer Recipients were not creditors of Family Corp. Family Corp did not receive consideration for the transfers made to the Transfer Recipients. Accordingly, the transfers were at undervalue.
Did the Transfers occur during the period set out in s. 96(1)(a)(i)?
35In Re National Telecommunications Inc., at para. 10, Myers J. held that the date of the initial bankruptcy event was the date that the application for receivership was brought.
36The receivership Application in the instant case was started on April 25, 2024. The Transfers to the Transfer Recipients occurred around May 9, 2024. There has been no bankruptcy in the instant case. However, the Receiver was appointed on or about August 20, 2024.
37I am satisfied that the condition set out in 96(1)(a)(i) has been met in respect of the Transfers.
Was the debtor insolvent at the time of the transfer?
38The insolvency of the debtor at the time of the transfer must be established by the Receiver. As noted by the court in Re Van der Liek (1970), 14 C.B.R. (N.S.) 229, at para 3: “The court will not presume insolvency. It must be proved and if it is not, then the application must be dismissed.” Further, the evidence of the debtor’s insolvency must be “clear and convincing:” Fisher v. Moffatt & Powell (Perth) Ltd. (1984) 53 C.B.R. 28 (Ont. S.C.), at para. 11.
39“Insolvent person” is defined in section 2 of the BIA:
Insolvent person means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and a) Who is for any reason unable to meet his obligations as they generally become due, b) Who has ceased paying his current obligations in the ordinary course of business as they generally become due, or c) The aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due;
40The Transfer Recipients have argued that there is no clear and convincing evidence that Family Corp. was insolvent at the time of transfer.
41In Van der Liek, at para. 6, the court provided guidance on how insolvency may be established:
In this case, the proof of insolvency left a great deal to be desired, and I would like to say a few words about how insolvency should be proved to the court. The usual method is to call two or three creditors whose claims were overdue at the date of the preference. It might be possible for the trustee to prepare a balance sheet to show insolvency within the meaning of s. 2(j)(iii) but from my own experience, the records of a bankrupt are usually in such a state that this is very difficult and the method I have suggested is usually the most convenient way of establishing insolvency.
42The Receiver relies on the fact that on February 24, 2024, the Applicant demanded on its loans and issued notices under s. 244 of the BIA. The Borrowers failed to repay the loans by the deadline in the demand. The Receiver submits that, therefore, the Borrowers (including Family Corp) were unable to satisfy their obligations as they generally became due.
43The application to appoint a receiver was issued on April 25, 2024. The matter was returnable on May 6, 2024, at which appearance the Preservation Order was granted. The receivership application was heard in August 2024, when the Court granted the receivership order on consent. Mr. Liconti’s (untested) evidence is that he consented to the appointment of the receiver because he understood that a forensic accounting would be conducted in respect of certain loans. Mr. Liconti took issue with the accuracy of the indebtedness claimed to be owing under these loans.
44In appointing the Receiver, on August 24, 2024, Black J. found:
a. The loans were cross-collateralized and guaranteed (para. 6) b. The loans had all matured and were payable in full. (para. 7) c. The lender demanded payment of the loans on February 8, 2024. The loans have remained in default. (para. 8)
45Mr. De La Rosa’s evidence is that Family Corp had almost $1.5 million in tax credit refunds expected for this year and the following three years. As noted by the Receiver these statements by Mr. De La Rosa are not substantiated by evidence. The Receiver reported to the court on the status of the outstanding tax credit applications. The Receiver has indicated that there are risks with the remaining tax credit applications, including Family Corp, because of the Borrowers’ corporate structure and the flow of funds between the Borrowers.
46The Receiver submits that because of the Cross Collateralization Agreement5, even if Family Corp was solvent, it had guaranteed debts from Mr. Liconti’s other companies, which were not solvent at the relevant time.
47I am satisfied that Family Corp was not solvent at the time the transfers were made. Among other things, demands were made on Family Corp’s loans, which were not satisfied. Family Corp was unable to satisfy its obligations as they generally became due.
Family Corp intended to defraud or delay its creditors
48In considering the intent of an insolvent person, the Court has held that it only requires proof “that the prohibited intention was among” the intentions of the debtor, not that it was the “only or even ... its primary intention:” National Telecommunications Inc., at para. 51.
49The court will consider whether there are “badges of fraud,” which may give rise to an inference of a debtor’s intent to defeat, defraud or delay creditors: Ernst & Young Inc. v. Aquino, 2021 ONSC 527, 88 C.B.R. (6th) 60, at paras. 151-155, aff’d 2022 ONCA 202, 160 O.R. (3d) 284, aff’d 2024 SCC 31, 175 O.R. (3d) 400. Dietrich J. indicated, at para. 155, that “[w]here a transaction displays one of the badges of fraud, this will usually be enough to establish the debtor’s illegal purpose unless the debtor can provide an innocent explanation.”
50In the instant case, Family Corp breached a court order by not delivering the tax credits to its counsel to be held in trust, and used a large portion of the tax credits to pay third parties
51The Transfer Recipients were not aware of Mr. Liconti’s efforts to breach a court order. The Transfer Recipients understood that Mr. Liconti was repaying the debts he personally owed to each of them. However, the Court looks at the intent of the insolvent transferor.
52It is clear that Family Corp made the transfers with the intent of defeating, defrauding or delaying its creditors.
Should the Court exercise discretion with respect to the transfers?
53As noted above, the BIA provides that where the criteria set out in 96(1)(a)(i)-(iii) have been established (as is the case here), the court MAY require the transferee to return the difference between the value of the consideration received by the debtor and the value of the consideration given by the debtor.
54In Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68, [2004] 3 S.C.R. 461, at para. 92, the Supreme Court of Canada commented that a finding that a person is “privy” to a reviewable transaction is not the end of the analysis. The Supreme Court concluded that if the necessary factors were established, then “having considered the context and [the factors], the judge must conclude that the case is a proper one for holding the person liable.” The Court in Peoples considered the former s. 100 of the Bankruptcy and Insolvency Act.
55Generally, where the above three criteria set out in s. 96 have been met, the Court will require the return of the funds to the estate. However, as noted in Bank of Montreal v. EL04 Inc. (Just Between Us and Pink Elephant), 2012 ONCA 80, 88 C.B.R. (5th) 261, at para. 13, referring again to the former s. 100 of the BIA, “the court still retained the discretion to refuse to grant judgment.”
56I am of the view that this is one of those rare cases where the court should not order the Transfer Recipients to return the funds to Family Corp.
57This is not a case, like Aquino, where there was a fraudulent invoicing scheme used to strip money out of the company. This is a case where the principal of the debtor, Mr. Liconti, who is now deceased, improperly took funds from Family Corp and used the money to pay his personal creditors who were unaware that Mr. Liconti was repaying them with funds that were taken contrary to the Preservation Order.
58The Transfer Recipients received the money with no knowledge of any impropriety in or around May 2024. They were not notified until the February 2025 letter from the Receiver that there may have been an issue with the payments.
59One of the issues with the relief sought by the Receiver is that the Transfer Recipients were legitimately owed money by either Mr. Liconti or one or more of his companies. The Transfer Recipients had either loaned money to Mr. Liconti or his companies and had not yet been repaid, or had provided services to Mr. Liconti or his companies, in respect of which no compensation had yet been paid. When the funds were transferred to the Transfer Recipients, they believed they were partial repayments that were owed to them. They were not aware of the Preservation Order or the receivership proceedings. For example:
a. Mr. Escobar loaned $50,000 to Mr. Liconti personally. A promissory note, dated April 20, 2018 was issued by Mr. Escobar to Mr. Liconti and Perpetual. On May 17, 2024, Mr. Liconti provided Mr. Escobar a cheque for $24,950.05. Mr. Escobar’s evidence is that the $24,950.05 “is a partial repayment of a personal loan by Liconti”. The cheque that Mr. Liconti wrote to Mr. Escobar shows Carlo L. Liconti as the purchaser of the bank draft. However, the funds came from an account that was held jointly by Mr. Liconti and 1969478 Ontario Inc. (“Wild Card”). Mr. Liconti had transferred $24,960 from Family Corp to Wild Card.
b. Peng Yu Fan made a series of loans to various companies controlled by Mr. Liconti. Mr. Fan’s fourth advance resulted in Mr. Liconti and Clive Corp executing an amalgamating promissory note to supersede and replace the three prior notes, and reflecting the total $96,000 that Fan had advanced. In September 2022 Fan made the first demand for payment under the Amalgamating Note. Over the next 20 months Mr. Fan made several more requests for Mr. Liconti to repay the $96,000. On May 6, 2024, Mr. Liconti offered to pay Mr. Fan $90,000 towards the principal owing under the Amalgamating Note by direct deposit to Fan’s bank account. Mr. Fan provided Mr. Liconti with his banking information, and on May 9, 2024, Mr. Fan received a payment of $90,000 by direct deposit into his bank account. Mr. Fan’s bank statement did not provide any information about the source. Mr. Fan was aware that the payment had been directed into his account by Mr. Liconti in respect of the outstanding indebtedness.
c. 2236349 Ontario Inc. o/a PS Consulting & Professional Services is a company controlled by Patti Spero. The Receiver’s Second Report indicates that Ms. Spero had provided bookkeeping services to Mr. Liconti’s companies and that her understanding was that the $20,000 was compensation for services rendered related to work done on tax credit applications, including the application that gave rise to the refund in question.
d. Manish Kshatriya states that the $75,000 he received was toward arrears on a secured loan of $115,000 that he had advanced to Mr. Liconti in 2018. He says that he received the payment of money that was owed to him from Mr. Liconti without any knowledge of impropriety. The $75,000 was repaid to him by way of bank transfer.
e. Cinema Siete Inc. provided various production services to the Borrowers. Christian De La Rosa, the sole director and shareholder for Cinema Siete provided affidavit evidence. Among other things, Cinema Siete loaned $164,698.00 to one of the Borrower companies. Mr. De La Rosa’s evidence was that Mr. Liconti would repay the loan when certain tax credits were obtained. When Cinema Siete was paid $150,000, Mr. De La Rosa understood that it was to reimburse him on the outstanding loan.
f. Stephen Chung did not provide affidavit evidence but sent an email to the court. He states that he is a “senior citizen living on a government pension.” In the letter Mr. Chung indicated that they were “unsuspecting investors” who should not be held responsible for the actions of an “irresponsible film maker.” He referred to his “ill-fated loans,” and that Mr. Liconti had “finally repaid [him] $40,000.”
60This is an unusual situation where Mr. Liconti, who controlled various companies, took the CRA refund money from one company to pay loans he owed either personally or were owed by other companies in his network. The recipients, who were legitimately owed money, generally thought that they were being repaid debts that were owed by Mr. Liconti or his companies. It is similar to a situation where improperly taken funds are then transferred to a third-party purchaser for value without notice.
61The Transfer Recipients had loaned money to Mr. Liconti or his businesses or had provided services to him or his businesses and had not yet been paid. Mr. Liconti improperly, and in the face of a court order requiring preservation of the tax refund monies, decided to take some of the CRA refund payable to Family Corp and use the funds to repay a portion of select personal debts. Mr. Liconti controlled Family Corp, as well as the other Borrowers. His evidence was that instead of abiding by the Preservation Order, he took the money from Family Corp and used it to pay certain of his creditors.
62These third parties accepted payments made from Mr. Liconti in good faith in respect of debts that were outstanding. As noted by Mr. Kshatriya, these recipients would not have the ability to audit the inner workings of Mr. Liconti’s business enterprise.
63In my view, the exceptional circumstances of this case are such that the court should exercise its discretion and not require the Transfer Recipients to repay the money to Family Corp’s estate. There would be significant hardship on some or all of the Transfer Recipients, who may not be in a position to repay the funds (having held them, and spent some or all of the funds, for some time before receiving any notice that there may have been an issue with the transfer). While not requiring the repayment of the funds will result in less funds in the Family Corp estate for the benefit of the applicants and any other secured creditors, it would be unjust in the circumstances to require the repayment by the Transfer Recipients.
Approval of Receiver’s Activities and Professional Fees
64The Receiver seeks approval of its activities and conduct as set out in the Second Report, Supplemental Report to the Second Report of the Receiver, Second Supplemental Report to the Second Report of the Receiver, and Third Supplemental Report to the Second Report of the Receiver (collectively, the “Reports”). As noted by the Receiver, the approval of a court officer’s activities and reports is “routinely granted:” Target Canada Co (Re), 2015 ONSC 7574, 31 C.B.R. (6th) 311, at paras. 2 and 23.
65I am satisfied that the activities of the Receiver as set out in the Reports were necessary and undertaken in good faith pursuant to the Receiver’s powers and duties and should be approved.
66I am also satisfied that the fees and disbursements of the Receiver and its counsel (as set out in the fee affidavits) are fair and reasonable and should be approved.
Disposition
67The Receiver’s motion for approval of the Reports and professional fees is granted. The balance of the relief sought by the Receiver is dismissed.
Justice Jana Steele
Date: May 26, 2026
(a) in favour of a creditor who is dealing at arm’s length with the insolvent person, or a person in trust for that creditor, with a view to giving that creditor a preference over another creditor is void as against [..] the trustee if it is made, incurred, taken or suffered, as the case may be, during the period beginning on the date that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy; and (b) in favour of a creditor who is not dealing at arm’s length with the insolvent person, or a person in trust for that creditor, that has the effect of giving that creditor a preference over another creditor is void as against [....] the trustee if it is made, incurred, taken or suffered, as the case may be, during the period beginning on the day that is 12 months before the date of the initial bankruptcy event and ending on the date of the bankruptcy.
Footnotes
- Family Corp. received a payment from CRA in the amount of $837,900.99. $312,718.69 was transferred to Osler, in trust, on account of the Preservation Order, which was subsequently transferred to a receivership trust account at the direction of the Receiver.
- Section 95(1) of the BIA provides: A transfer of property made, a provision of services made, a charge on property made, a payment made, an obligation incurred or a judicial proceeding taken or suffered by an insolvent person
- Section 96(3) provides: In this section, a person who is privy means a person who is not dealing at arm’s length with a party to a transfer and, by reason of the transfer, directly or indirectly, receives a benefit or causes a benefit to be received by another person.
- There is no evidence to suggest that the parties in the instant case were not at arm’s length.
- The issue was raised regarding whether the Cross Collateralization Agreement was binding. The allegation was that there was no consideration. As noted by the Court in Lancia v. Park Dentistry, 2018 ONSC 751, at para. 54: “[I]t is trite law that courts will not inquire into the adequacy of consideration – a “peppercorn” will do. As long as there is consideration, contracts may be varied or superseded by new agreements.” The Cross Collateralization Agreement references “for value received.”