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ARTICLE · 16 JANUARY 2026

Why Courts Take Bad Faith Seriously: Insights From The VK Group Decision

MLT Aikins LLP
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On December 9, 2025, the Court rendered its decision in V K Delivery & Moving Services Ltd. (Re), 2025 BCSC 2454, and on December 19, 2025, the Court of Appeal refused to grant the debtors leave to appeal.

CanadaInsolvency/Bankruptcy/Re-Structuring

The British Columbia Supreme Court determined that bad faith conduct by the debtors was sufficient to terminate proceedings under the Companies' Creditors Arrangement Act ("CCAA") and that appointing a receiver under the Bankruptcy and Insolvency Act was appropriate.

On December 9, 2025, the Court rendered its decision in V K Delivery & Moving Services Ltd. (Re), 2025 BCSC 2454, and on December 19, 2025, the Court of Appeal refused to grant the debtors leave to appeal. This was a highly contentious case where Royal Bank of Canada ("RBC"), a senior secured creditor, sought the appointment of a receiver of a debtor group of companies, while faced with a competing CCAA proceeding.

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