Key Points:

• Context: Application under Bankruptcy and Insolvency Act and Courts of Justice Act regarding the administration and distribution of a debtor’s assets.

• Receiver’s Role:

  • Appointed on May 23, 2023, to manage and realize the assets of the debtor, 170 Willowdale Investments Corp..
  • Oversaw the sale of the debtor’s primary asset (hotel property) for $8 million.
  • Filed reports recommending the distribution of proceeds and discharge of their duties.

• Distributions Ordered:

  • Payments to the Canada Revenue Agency for outstanding tax liabilities.
  • Amounts to RBC for secured ($851,578.09) and unsecured ($60,926.23) claims.
  • Reserve funds for employee claims and administration costs.
  • Surplus ($1,228,879.66) to be distributed to the debtor after creditor claims are satisfied.

• Dispute Between Debtor and RBC:

  • The debtor challenged RBC’s claim to proceeds from the real property, arguing that RBC lacked security over the property itself and thus over its sale proceeds.
  • The court found RBC’s general security agreement valid and enforceable over the proceeds, dismissing the debtor’s objections.

• Court’s Findings:

  • RBC had a perfected security interest in the proceeds, supported by a General Security Agreement.
  • The sale proceeds are part of the receivership estate and subject to secured claims.
  • The debtor is still entitled to surplus funds after creditors are paid in full.

• Outcome:

  • The court approved the Receiver’s actions, distributions, and fees.
  • Directed the payment of RBC’s secured claims from the sale proceeds.
  • Discharged the Receiver upon completion of its duties.