In the Matter of the Bankruptcy of Erwin Singh Braich

In the Matter of the Bankruptcy of Erwin Singh Braich

The court concluded the Trustee acted within its s.30 authority, negotiated the Clock agreement in good faith to reduce the real risk of failing to set aside the security given weak evidence and absent bankrupt, and the agreement protected the Petitioning Creditor's advance by priority; therefore s.38 relief was not...

Source-derived case information.

Citation
2003 BCSC 1789
Parties
Bankrupt: Erwin Singh Braich; Trustee: KPMG Inc.; Creditor (petitioner): Glen Walsh; Secured Creditor: Clock Holdings Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
27 November 2003
Procedural Posture
Bankruptcy and Insolvency / Chambers Applications Under S.38 and S.34 of the Bankruptcy and Insolvency Act
Outcome
Application by Glen Walsh under s.38 dismissed; Trustee authorized under s.34 to proceed with the Clock agreement; Trustee awarded costs of both applications.
Legal Topics
Fraudulent Preference, Trustee Powers, Compromise and Settlement, Priority of Claims, Trustee Authorization S.30, Creditor Proceeding S.38, Court Direction S.34
Source Language
english
Bankruptcy Insolvency Civil Procedure Fraudulent Preference Trustee Powers Compromise and Settlement Priority of Claims Trustee Authorization S.30 +2 more

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Parties

Erwin Singh Braich

Bankrupt

KPMG Inc.

Trustee

Glen Walsh

Creditor (petitioner)

Clock Holdings Ltd.

Secured Creditor

Procedural Posture

Bankruptcy and Insolvency / Chambers Applications Under S.38 and S.34 of the Bankruptcy and Insolvency Act

Legal Issues

  1. 1 Whether s.38 order should be granted authorizing creditor to pursue fraudulent preference action against Clock Assignment
  2. 2 Whether the Trustee refused or neglected to take a proceeding for the benefit of the estate
  3. 3 Whether the Trustee validly exercised authority to compromise under s.30 and may be directed under s.34 to proceed with the settlement

Ratio Decidendi

The court concluded the Trustee acted within its s.30 authority, negotiated the Clock agreement in good faith to reduce the real risk of failing to set aside the security given weak evidence and absent bankrupt, and the agreement protected the Petitioning Creditor's advance by priority; therefore s.38 relief was not warranted and the Trustee was authorized under s.34 to proceed with the Clock agreement; costs awarded to the Trustee.

Court Disposition

Application by Glen Walsh under s.38 dismissed; Trustee authorized under s.34 to proceed with the Clock agreement; Trustee awarded costs of both applications.

Orders

  • Dismissal of the Petitioning Creditor's application under s.38 of the Bankruptcy and Insolvency Act
  • Order pursuant to s.34 of the Bankruptcy and Insolvency Act authorizing KPMG Inc., Trustee, to proceed with the Clock agreement as outlined