The Receiver and Monitor sought court approval for the sale of geothermal assets and an order compelling the assignment of a long-term lease (the "Berm Lease") to the purchaser.
King Towns North Inc. (KTNI), the landlord under the Berm Lease, opposed the assignment order, arguing that the Bankruptcy and Insolvency Act (BIA) does not grant receivers statutory authority to compel assignments and that the assignment was inappropriate given the nominal rent and a lease clause allowing unreasonable withholding of consent.
The court found jurisdiction to grant the assignment order under BIA s. 243(1)(c) in conjunction with s. 100 of the Courts of Justice Act, or alternatively, through its inherent jurisdiction, emphasizing a purposive approach to Canadian insolvency laws.
The court concluded that the assignment was appropriate, as it was critical to the transaction, the assignee's financial obligations were nominal, and KTNI's allocation entitlements could be addressed at a later date.
The sale transaction and a sealing order for confidential information were also approved.
