The case of Electro-Works Ltd. v. Fogler, Rubinoff LLP expands the scope of liability for breach of trust to include monies received through settlement funds and applied as payment for lawyers’ fees.
In the Spring of 2021, Dan Fridmar prepared an information video for the Tourism Industry Association of Yukon (TIAY) on the basics and fundamentals of Bankruptcy Law in Canada. We’re excited to share this information with you now!
In bankruptcy proceedings, there are two players: Licensed Insolvency Trustees and Bankruptcy Lawyers. It is important to note who to call first.
In this case, the Court considers the importance of establishing a direct connection/chain between the party claiming a trust relationship and the party against whom trust obligations are imparted.
Section 67(1)(a) of the Bankruptcy and Insolvency Act (the “BIA”) establishes that the property of a bankrupt divisible among his creditors shall not comprise property held by the bankrupt in trust for any other person. This means that, monies held in trust – such as the CLA imposed trust – would not be considered as property of the bankrupt for distribution amongst creditors.