Outdoor Broadcast Networks Inc (Re), 2010 ONSC 5647
The debtor had filed a notice of intention to make a proposal (“NOI”) to its creditors under the BIA. It was proposing to immediately sell certain assets in Ontario and BC to help it fund its proposal. As the proposal had not yet been made, the debtor was the one selling assets out of the ordinary course, and the sale was subject to the Ontario Bulk Sales Act. That Act does not apply to sales by bankruptcy trustees, receivers, sheriffs, or other liquidators for the benefit of creditors.
When the BIA was amended in Sept. 2009, a new section 65.13 was added to the BIA prohibiting a debtor from making a sale out of the ordinary course during the NOI time period without prior court approval. As this sale was by the debtor, it was also subject to the BSA for the Ontario assets.
The Registrar granted a vesting order for the sale under BIA sections 65.13(7) and 192(1)(f), noting that:
- while a Bulk Sales Act exemption order was to be granted by a “judge” and not a “registrar”, the registrar had authority to make a vesting order by operation of BIA section 192(1)(f); and
- section 65.13(7) of the BIA allowed approval of a sale during the NOI period “free and clear of any security, charge or other restriction…”, which the Registrar held included any bulk sale restriction.