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Inside Internal Controls

News and discussion on implementing risk management

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insolvency

Firepower: Guidance on whether commissions owed to salespersons are held in trust by a business and outside of insolvency

In Firepower Debt GP Inc. v. TheRedPin, Inc., 2019 ONCA 903 (“Firepower”), the Ontario Court of Appeal recently affirmed a decision of Justice Penny that commissions held by an insolvent real estate brokerage but owed to real estate salespersons were not held in trust and were thus subject to the security of the brokerage’s lenders.

 

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The Ontario Court of Appeal determines when it is appropriate to vest out a royalty interest as part of an insolvency proceeding

Ontario’s highest court has created a framework for determining when it is appropriate for courts to approve sales and vest out interests in assets in the context of insolvency proceedings. This has given resource extraction industries and insolvency practitioners some much needed clarity on how to navigate situations when assets subject to encumbrances and other interests are being sold, especially when land subject to a royalty interest is involved.

 

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The future of insolvency

Industry Canada sought public input on the state and future of Canada’s insolvency legislation through early 2014. Interested parties can review the issues in the agency’s discussion paper on the statutory review of the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.

 

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