Bankruptcy and Insolvency Act

Marginal note:Insolvent person may disclaim or resiliate commercial lease

• 65.2 (1) At any time between the filing of a notice of intention and the filing of a proposal, or on the filing of a proposal, in respect of an insolvent person who is a commercial lessee under a lease of real property or an immovable, the insolvent person may disclaim or resiliate the lease on giving thirty days notice to the lessor in the prescribed manner, subject to subsection (2).

• Marginal note:Lessor may challenge

  (2) Within fifteen days after being given notice of the disclaimer or resiliation of a lease under subsection (1), the lessor may apply to the court for a declaration that subsection (1) does not apply in respect of that lease, and the court, on notice to any parties that it may direct, shall, subject to subsection (3), make that declaration.

• Marginal note:Circumstances for not making declaration

  (3) No declaration under subsection (2) shall be made if the court is satisfied that the insolvent person would not be able to make a viable proposal without the disclaimer or resiliation of the lease and all other leases that the lessee has disclaimed or resiliated under subsection (1).

• Marginal note:Effects of disclaimer or resiliation

  (4) If a lease is disclaimed or resiliated under subsection (1),

  • (a) the lessor has no claim for accelerated rent;

  • (b) the proposal must indicate whether the lessor may file a proof of claim for the actual losses resulting from the disclaimer or resiliation, or for an amount equal to the lesser of

    • (i) the aggregate of

      • (A) the rent provided for in the lease for the first year of the lease following the date on which the disclaimer or resiliation becomes effective, and

      • (B) fifteen per cent of the rent for the remainder of the term of the lease after that year, and

    • (ii) three years’ rent; and

  • (c) the lessor may file a proof of claim as indicated in the proposal.

• Marginal note:Classification of claim

  (5) The lessor’s claim shall be included in either

  • (a) a separate class of similar claims of lessors; or

  • (b) a class of unsecured claims that includes claims of creditors who are not lessors.

• Marginal note:Lessor’s vote on proposal

  (6) The lessor is entitled to vote on the proposal in whichever class referred to in subsection (5) the lessor’s claim is included, and for the amount of the claim as proven.

• Marginal note:Determination of classes

  (7) The court may, on application made at any time after the proposal is filed, determine the classes of claims of lessors and the class into which the claim of any of those particular lessors falls.

• Marginal note:Section 146 not affected

  (8) Nothing in subsections (1) to (7) affects the operation of section 146 in the event of bankruptcy.