Sager (Re)

Sager (Re)

Though the bankrupt is largely an honest but unfortunate debtor, proven s.173 factors relating to pre-bankruptcy asset structuring and intercompany/ trust-funded transfers justify denying an absolute discharge; court exercises s.172(2) discretion to grant a conditional discharge subject to payment of $200,000...

Source-derived case information.

Citation
2021 NSSC 281
Parties
Bankrupt: Arthur Ian Sager; Trustee: Ernst & Young Inc.; Creditor: Bank of Montreal
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
27 September 2021
Procedural Posture
Bankruptcy and Insolvency / Discharge Application / Hearing Under S.172
Outcome
Discharge granted subject to conditions under s.172(2)
Legal Topics
Discharge Under S.172, Misconduct and S.173 Factors, Preferences S.95, Surplus Income S.68, Treatment of Family Trust Assets, Mortgage Assignment as Payment
Source Language
english
Bankruptcy Law Insolvency Trusts Property Law Discharge Under S.172 Misconduct and S.173 Factors Preferences S.95 Surplus Income S.68 +2 more

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Parties

Arthur Ian Sager

Bankrupt

Ernst & Young Inc.

Trustee

Bank of Montreal

Creditor

Procedural Posture

Bankruptcy and Insolvency / Discharge Application / Hearing Under S.172

Legal Issues

  1. 1 Whether the bankrupt is entitled to an absolute discharge or a discharge subject to conditions under s.172
  2. 2 Whether transactions and transfers placed assets out of reach of creditors and amount to s.173 misconduct
  3. 3 Whether any transfers constitute s.95 preferences

Ratio Decidendi

Though the bankrupt is largely an honest but unfortunate debtor, proven s.173 factors relating to pre-bankruptcy asset structuring and intercompany/ trust-funded transfers justify denying an absolute discharge; court exercises s.172(2) discretion to grant a conditional discharge subject to payment of $200,000 (minimum $2,500/month) and permits Trustee to register claim on 150 Pentz Road, with option for Taksindu to assign its mortgage to satisfy the condition.

Court Disposition

Discharge granted subject to conditions under s.172(2)

Orders

  • Bankrupt to pay $200000 into estate for benefit of creditors, payable at least $2500 per month
  • Trustee to register and retain its claim of interest in 150 Pentz Road pending further order