Bankruptcy and Insolvency Act

Marginal note:Avoidance of general assignment of book debts

• 94 (1) Where a person engaged in any trade or business makes an assignment of his existing or future book debts or any class or part thereof and subsequently becomes bankrupt, the assignment of book debts is void against the trustee with respect to any book debts that have not been paid at the date of the bankruptcy.

• Marginal note:Foregoing provisions not to apply in some cases

  (2) This section does not apply to an assignment of book debts that is registered pursuant to any statute of any province providing for the registration thereof if the assignment is valid in accordance with the laws of the province.

• Marginal note:Further cases where this section not to void assignments

  (3) Nothing in this section renders void any assignment of book debts due at the date of the assignment from specified debtors, or of debts growing due under specified contracts, or any assignment of book debts included in a transfer of a business made in good faith and for adequate valuable consideration.

• Marginal note:Definition of "assignment"

  (4) For the purposes of this section, assignment includes assignment by way of security, hypothec and other charges on book debts.