As of September 18, 2009, certain amendments to the
Bankruptcy and Insolvency Act, including amendments to the provisions regarding preferences and transfers at undervalue, came into force. In particular, section 95(1)(b) of the Act provides that transfers in favour of non-arm's length creditors within 12 months of an initial bankruptcy event which have the effect of giving a preference, are void against the Trustee in bankruptcy. Contrary to the prior legislation, there is no express requirement to consider the intent of the parties. There is no rebuttable presumption. This article considers the courts' application of these provisions, which have the potential to work injustice if literally applied. Published in the
Journal of the Insolvency Institute of Canada by Carswell.
Please note that this publication presents an overview of notable legal trends and related updates. It is intended for informational purposes and not as a replacement for detailed legal advice. If you need guidance tailored to your specific circumstances, please contact one of the authors to explore how we can help you navigate your legal needs.
For permission to republish this or any other publication, contact Amrita Kochhar at kochhara@bennettjones.com.