Equipment Financiers May Have An Advantage In Receiverships

In the recent case of Integris Credit Union v. Mercedes-Benz Financial Services Canada Corporation, 2016 BCCA 231, the B.C. Court of Appeal rendered a decision which provides certain equipment financiers with the ability to avoid sharing in the costs of certain receiverships. The decision, while helpful to equipment financiers, does not apply universally to all receiverships and certain circumstances need to exist, and certain steps need be undertaken, in order to obtain such relief.

In particular, it appears that an equipment financier must, at a minimum, (i) have either a purchase money security interest (PMSI), lease or conditional sales contract and (ii) make it known early in the receivership that it wishes to seize its assets and resell the assets outside of the scope of the receivership. Further, the receivership must be a "liquidation" style of receivership and not one where all of the assets are being sold as a going concern.