An Ontario court has rejected a motion from an insolvent brokerage firm seeking to have a vote of its creditors, which put it into bankruptcy, overturned.
In a decision handed down last week, the Ontario Superior Court of Justice rejected a motion from Casimir Capital Ltd., which brought a motion seeking to set aside its assignment into bankruptcy, and a review of a decision of a trustee to allow certain creditors to vote on a proposal put forth by the firm to settle its debts. At that meeting, 93.7% of the creditors voted against the proposal. However, in the motion, Casimir argued that some of the creditors should not have been allowed to vote as it disputes the validity of their claims.
In a decision handed down last week, the court dismissed the Casimir motion, ruling that the trustee “was correct in allowing the disputed creditors to vote,” based on the information it had. “The steps taken by the proposal trustee in reviewing and validating the proofs of claims filed, including the disputed creditors, for the purpose of voting at the first meeting were more than sufficient.”
The court noted that even if the votes of the disputed creditors were disallowed, 69.4% of the other creditors, whose claims are not disputed, voted against the proposal.
“I agree with the trustee that the debtor’s motion to have its deemed assignment set aside fails in any event because even if the disputed creditors votes are set aside, the votes of the remaining creditors still defeat the proposal,” wrote Judge Laurence Pattillo in the decision.