Last year, we
reported that Ontarians may finally be able to bid farewell to
the archaic Bulk Sales Act (Ontario) (the
BSA). The BSA was initially enacted to protect
creditors of a seller against the sale of assets in bulk where the
seller did not satisfy its outstanding debts to the creditor.
After much anticipation, on March 22, 2017 the Burden Reduction Act, 2017 was
enacted, which, among other things, repeals the BSA, an ancient
piece of legislation that all other jurisdictions in Canada
repealed years ago. For reasons that are readily apparent as well
as those set out below, M&A lawyers in Ontario welcome this
change.
Given modern Ontario statutes (some of which are discussed
below), the BSA served no practical purpose. In the industry, the
BSA was seen as costly and burdensome. Protections afforded under
the Personal Property Security Act (Ontario), the
Fraudulent Conveyances Act (Ontario) and
Business Corporations Act (Ontario), to name a few,
adequately
