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ARTICLE · 26 JULY 2022

Bankruptcy Doesn't Invalidate Existing Contracts, BCSC Rules

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Just because a company has gone bankrupt doesn't mean its contracts are unenforceable, the Supreme Court of British Columbia has confirmed.

CanadaInsolvency/Bankruptcy/Re-Structuring
William E. J. Skelly
William E. J. Skelly
Arooj Shah
Arooj Shah
Dana Nowak
Dana Nowak
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Just because a company has gone bankrupt doesn't mean its contracts are unenforceable, the Supreme Court of British Columbia has confirmed.

On July 5, B.C.'s Supreme Court rendered its decision in 9019235 Canada Inc. v Coast Fraser Enterprises Ltd., 2022 BCSC 1132 (CanLII), a case that involved a trustee attempting to collect outstanding debts from the former clients of EncoreFX, a B.C.-based financial services firm that filed for bankruptcy in March, 2020.

Background

EncoreFX provided foreign exchange risk management services and cross-border payment services to small and medium enterprises. Its services included foreign exchange spot transactions, foreign exchange derivative contracts (including forward contracts and options) and payment processing services.

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