Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Act current to 2013-05-20 and last amended on 2013-04-01. Previous Versions

Marginal note:Postponement of claims — creditor not at arm’s length

  • 137. (1) A creditor who, at any time before the bankruptcy of a debtor, entered into a transaction with the debtor and who was not at arm’s length with the debtor at that time is not entitled to claim a dividend in respect of a claim arising out of that transaction until all claims of the other creditors have been satisfied, unless the transaction was in the opinion of the trustee or of the court a proper transaction.

  • (2) [Repealed, 2007, c. 36, s. 47]

  • R.S., 1985, c. B-3, s. 137;
  • 2000, c. 12, s. 15;
  • 2005, c. 47, s. 89;
  • 2007, c. 36, s. 47.
Previous Version

138. [Repealed, 2007, c. 36, s. 48]

Previous Version
Marginal note:Postponement of claims of silent partners

139. Where a lender advances money to a borrower engaged or about to engage in trade or business under a contract with the borrower that the lender shall receive a rate of interest varying with the profits or shall receive a share of the profits arising from carrying on the trade or business, and the borrower subsequently becomes bankrupt, the lender of the money is not entitled to recover anything in respect of the loan until the claims of all other creditors of the borrower have been satisfied.

  • R.S., c. B-3, s. 110.
Marginal note:Postponement of wage claims of officers and directors

140. Where a corporation becomes bankrupt, no officer or director thereof is entitled to have his claim preferred as provided by section 136 in respect of wages, salary, commission or compensation for work done or services rendered to the corporation in any capacity.

  • R.S., c. B-3, s. 111.
Marginal note:Postponement of equity claims

140.1 A creditor is not entitled to a dividend in respect of an equity claim until all claims that are not equity claims have been satisfied.

  • 2005, c. 47, s. 90;
  • 2007, c. 36, s. 49.
Marginal note:Claims generally payable rateably

141. Subject to this Act, all claims proved in a bankruptcy shall be paid rateably.

  • R.S., c. B-3, s. 112.
Marginal note:Partners and separate properties

  • 142. (1) Where partners become bankrupt, their joint property shall be applicable in the first instance in payment of their joint debts, and the separate property of each partner shall be applicable in the first instance in payment of his separate debts.

  • Marginal note:Surplus of separate properties

    (2) Where there is a surplus of the separate properties of the partners, it shall be dealt with as part of the joint property.

  • Marginal note:Surplus of joint properties

    (3) Where there is a surplus of the joint property of the partners, it shall be dealt with as part of the respective separate properties in proportion to the right and interest of each partner in the joint property.

  • Marginal note:Different properties

    (4) Where a bankrupt owes or owed debts both individually and as a member of one or more partnerships, the claims shall rank first on the property of the individual or partnership by which the debts they represent were contracted and shall only rank on the other estate or estates after all the creditors of the other estate or estates have been paid in full.

  • Marginal note:Costs out of joint and separate properties

    (5) Where the joint property of any bankrupt partnership is insufficient to defray any costs properly incurred, the trustee may pay such costs as cannot be paid out of the joint property out of the separate property of the bankrupts or one or more of them in such proportion as he may determine, with the consent of the inspectors of the estates out of which the payment is intended to be made, or, if the inspectors withhold or refuse their consent, with the approval of the court.

  • R.S., c. B-3, s. 113.