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ARTICLE · 23 MARCH 2023

Priority Between Builders' Liens + Trustee Fees In A Bankrupt Estate

In Golfside Ventures Ltd. (Re), Golfside had a Joint Venture Agreement to develop their land with Obcorp. Golfside subsequently went bankrupt, and its only asset was the land subject...

CanadaReal Estate and Construction

Usually, secured claims against a bankrupt estate (such as builders' liens) are paid out before any other claims, including a bankruptcy trustee's fees. But fairness is the most important consideration when administering a bankrupt estate. It would be unfair if a secured claim ate up the entire bankrupt estate, leaving the trustee with unpaid expenses. The Court confirmed they can exercise their inherent jurisdiction to secure a trustee's fees over other secured claims, including builders' liens.


In Golfside Ventures Ltd. (Re), Golfside had a Joint Venture Agreement to develop their land with Obcorp. Golfside subsequently went bankrupt, and its only asset was the land subject to the joint venture agreement, valued at approximately $1.6 million. The bankruptcy trustee determined that the Estate would be able to cover its fees and expenses but took steps to enter agreements with other secured creditors to allow their fees and expenses to be paid

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