Bankruptcy and Insolvency Act

Marginal note:Preferences

• 95 (1) Every transfer of property, every charge made on property, every payment made, every obligation incurred and every judicial proceeding taken or suffered by any insolvent person in favour of any creditor or of any person in trust for any creditor with a view to giving that creditor a preference over the other creditors is, when it is made, given, incurred, taken or suffered within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date the insolvent person became bankrupt, both dates included, deemed fraudulent and void as against, or in the Province of Quebec, may not be set up against, the trustee in the bankruptcy.

• Marginal note:When view to prefer presumed

  (2) If any transfer, charge, payment, obligation or judicial proceeding mentioned in subsection (1) has the effect of giving any creditor a preference over other creditors, or over any one or more of them, it shall be presumed, in the absence of evidence to the contrary, to have been made, incurred, taken, paid or suffered with a view to giving the creditor a preference over other creditors, whether or not it was made voluntarily or under pressure and evidence of pressure shall not be admissible to support the transaction.

• Marginal note:Exception

  (2.1) Subsection (2) does not apply in respect of the following:

  • (a) a margin deposit made by a clearing member with a clearing house; or

  • (b) a transfer, charge or payment made in connection with financial collateral and in accordance with the provisions of an eligible financial contract.

• Marginal note:Definitions

  (3) In this section,

  clearing house

  chambre de compensation

  clearing house means a body that acts as an intermediary for its clearing members in effecting securities transactions; (chambre de compensation)

  clearing member

  membre

  clearing member means a person engaged in the business of effecting securities transactions who uses a clearing house as intermediary; (membre)

  creditor

  créancier

  creditor includes a surety or guarantor for the debt due to the creditor; (créancier)

  margin deposit

  dépôt de couverture

  margin deposit means a payment, deposit or transfer to a clearing house under the rules of the clearing house to assure the performance of the obligations of a clearing member in connection with security transactions, including, without limiting the generality of the foregoing, transactions respecting futures, options or other derivatives or to fulfil any of those obligations. (dépôt de couverture)