Pay to Play

Thanks to a decision of the Supreme Court of British Columbia released on June 13, 2013, Court-appointed receivers can now accept appointments with greater confidence that their fees and expenses incurred in passing their accounts are recoverable from the estate - or possibly from a third party who raises opposition, if no assets remain in the estate.

In Re Avant Enterprises Inc.^[1], the Supreme Court of British Columbia expressed its reluctance to leave its receiver exposed in respect of costs incurred in the passing of its accounts.

The Facts

In Avant, Fasken Martineau acted for Ernst & Young Inc. (the "Receiver") in its capacity as Court-appointed receiver of Bay City Auto Inc. ("Bay City") and Abenante Motor Sports Inc. ("AMS"), as well as interim receiver of Avant Enterprises Inc. ("Avant"). Avant was a guarantor of the obligations of Bay City and AMS to the petitioning creditor (the "Bank").