Simon's Legal Resources

Insolvency (BIA) - "Insolvent Person"

. Aquino (Re)

In Aquino (Re) (Ont CA, 2026) the Ontario Court of Appeal dismissed a BIA insolvency appeal, this brought against two orders: the first "adjudging the appellant bankrupt and appointing [a] trustee of his bankrupt estate" and the second "determining that a pre-existing Mareva injunction, granted in litigation that resulted in a substantial judgment against the appellant (the “TUV litigation”), remained and continued in full effect until further order of the court (the “Mareva Order”).

Here the court considers the definition of an 'insolvent person' [BIA s.2]:

[43] I also do not accept the appellant’s argument that he is a solvent person who should not have been subject to a bankruptcy order, and the bankruptcy judge’s discretion should have been exercised to avoid that result. The BIA defines an insolvent person as

a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and

(a) who is for any reason unable to meet his obligations as they generally become due,

(b) who has ceased paying his current obligations in the ordinary course of business as they generally become due, or

(c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due

[44] The appellant was admittedly insolvent under prongs (a) and (b) of that definition. Given that he had no current ability to realize on corporate assets he may as well have been insolvent under prong (c). ...