This article is part of the series from the Higgerty Law statement of claim. You can read what a statement of claim and a Quistclose Trust is in the first article in this series.
This portion of the statement alleges
- who knew what when,
- what they did or didn’t do about what they knew,
- and how these actions contributed to ABC District’s insolvency.
Please note that these are allegations only and this case has not been adjudicated in a court of law. As always, if you have any legal questions or need legal advice please consult appropriate legal counsel.
J. The CCAA Proceedings
110. As a result of the events set out herein, the ABC District was unable to meet its obligations to the depositors to the CEF.
111. Knowing they were unable to meet their obligations to the CEF depositors, the ABC District, its Officers and Directors, acting in bad faith, nevertheless continued to encourage and accept or renew deposits to the CEF up to and including December 31, 2014, and deliberately failed to take any steps to inform the depositors to the CEF that their deposits were at risk.
112. The LCC and/or LCCFM were aware of the insolvency of the ABC District and the impending CCAA application. However, LCC and/or LCCFM took no steps to halt the operations of the CEF, or to inform the depositors to the CEF that their deposits were at risk.
113. On January 2, 2015 ABC District, DIL, ECHS and EMSS (the “Applicants”) sought protection from their creditors under the Company’s Creditors Arrangement Act, RSC 1985, c.C-36, as amended (the “CCAA Proceedings”). An Order to that effect was granted by the Court of Queen’s Bench of Alberta on January 23, 2015 in Court of Queen’s Bench Action No. 1501-00955.
114. Taman and Bishop McKenzie acted as counsel for the Applicants in the CCAA Proceedings
115. The assets of the ABC District are not sufficient to satisfy its approximately $97,000,000.00 in total outstanding obligations to its members who have made deposits to the CEF.
116. The unlawful actions of each of the Defendants herein described caused or in the alternative contributed to the insolvency of the ABC District.