Court allows seizure of assets without an appointed receiver
In September 2016, Spencer Chimuk represented Western Lion Capital Inc. (WLC) in their court application to avoid costly bankruptcy proceedings or debt restructuring under CCAA in their seizure of all assets of a distressed oil and gas company. WLC’s application was resisted by some of the distressed company’s secured creditors. These creditors wanted a full valuation of assets and a receiver appointed to ensure proper protection of the other secured creditors.
This case is important because it is highly unusual for a party to be able to seize all assets of a company without having a receiver appointed to manage and oversee the process.
Results
We were able to persuade the Justice that forcing WLC to undertake bankruptcy proceedings would not result in any net gains to the complainant creditors and that allowing the seizure of assets was warranted. The outcome was a tremendous result for WLC, avoiding months of delay, substantive costs, and deal risks to third-party transactions it was pursuing.
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