The Licensed Insolvency Trustee brought a motion to approve a proposal made by the bankrupt, a real estate holding company whose primary assets were 62 unserviced residential lots.
An opposing creditor argued the proposal was not properly authorized by the corporation, failed to meet statutory requirements under the Bankruptcy and Insolvency Act, and was unreasonable as it primarily benefited the other shareholders.
The court found that the proposal was authorized in substance, did not violate statutory priority or conduct rules, and was reasonable as it forecasted a significantly higher return to creditors than a liquidation in bankruptcy.
The proposal was approved and a confidential valuation supplement was ordered sealed.
