Forest & Marine Financial Corporation (Re)

Forest & Marine Financial Corporation (Re)

The court held that the receivership order authorized the Receiver to pursue an orderly realization and workout strategy rather than mandating an immediate en bloc sale; the Receiver's plan was reasonable and within its discretion, Asset Engineering's stalking horse proposal was denied, and the Receiver's fees and...

Source-derived case information.

Citation
2009 BCSC 1781
Parties
Debtors: Forest & Marine Financial Corporation and affiliated entities (Forest & Marine Investments Ltd.; Forest & Marine Capital Ltd.; Forest & Marine Insurance Services Ltd.; Treesea Holdings Inc.); Court Appointed Receiver: The Bowra Group; Secured Creditor / Applicant: Asset Engineering LP; Creditor Committee / Supporting Party: Ad Hoc Committee of Investment Receipt Holders
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
9 November 2009
Procedural Posture
Receivership Under the Companies' Creditors Arrangement Act and the Business Corporations Act / Interlocutory Applications for Directions on Realization Strategy and for Approval of a Stalking Horse Sale
Outcome
Application by Asset Engineering denied; Receiver authorized to continue and implement its realization and orderly workout strategy; Receiver to report further progress by December 15, 2009; Asset Engineering may bring a further hearing on December 18, 2009 if Receiver reports material lack of progress.
Legal Topics
Realization and Liquidation of Assets, Stalking Horse Bids, Priority of Receiver's Fees and Expenses, Fiduciary Duties of Receivers
Source Language
english
Insolvency Receivership Corporate Law Realization and Liquidation of Assets Stalking Horse Bids Priority of Receiver's Fees and Expenses Fiduciary Duties of Receivers

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Parties

Forest & Marine Financial Corporation and affiliated entities (Forest & Marine Investments Ltd.; Forest & Marine Capital Ltd.; Forest & Marine Insurance Services Ltd.; Treesea Holdings Inc.)

Debtors

The Bowra Group

Court Appointed Receiver

Asset Engineering LP

Secured Creditor / Applicant

Ad Hoc Committee of Investment Receipt Holders

Creditor Committee / Supporting Party

Procedural Posture

Receivership Under the Companies' Creditors Arrangement Act and the Business Corporations Act / Interlocutory Applications for Directions on Realization Strategy and for Approval of a Stalking Horse Sale

Legal Issues

  1. 1 Whether the receivership order required immediate sale/liquidation of all assets
  2. 2 Whether the Receiver's proposed orderly workout strategy was consistent with the receivership order and the Receiver's duties
  3. 3 Whether Asset Engineering's proposed stalking horse purchase should be approved

Ratio Decidendi

The court held that the receivership order authorized the Receiver to pursue an orderly realization and workout strategy rather than mandating an immediate en bloc sale; the Receiver's plan was reasonable and within its discretion, Asset Engineering's stalking horse proposal was denied, and the Receiver's fees and expenses are entitled to indemnity from assets in priority to other charges.

Court Disposition

Application by Asset Engineering denied; Receiver authorized to continue and implement its realization and orderly workout strategy; Receiver to report further progress by December 15, 2009; Asset Engineering may bring a further hearing on December 18, 2009 if Receiver reports material lack of progress.

Orders

  • Asset Engineering's application for an order compelling immediate liquidation and approving its stalking horse offer is denied
  • The Receiver (Bowra Group) is directed to continue with the realization strategy set out in its reports and to provide a further report no later than December 15, 2009