Interim receiver (BIA section 47)
An interim receiver is a licensed insolvency trustee a court appoints to safeguard a debtor’s property and do what the court directs. Section 47 of the Bankruptcy and Insolvency Act lets a court appoint one when a secured creditor’s notice of intention to enforce its security is about to be sent or has been sent; sections 46 and 47.1 cover bankruptcy applications and proposals.
A buyer meets an interim receiver when a seller’s secured lender has sent notice of enforcement and a court has appointed a trustee over property subject to that security. It differs from a court-appointed receiver, which section 243 of the Act covers.
How section 47 works
If the court is satisfied that a notice is about to be sent or was sent under subsection 244(1), it may appoint a trustee as interim receiver of all or part of the debtor’s property that is subject to the security. The appointment lasts until the earliest of a receiver or trustee taking possession of that property, or the end of the period set in paragraph 47(1)(c) or any period the court specifies. The court may direct it to take possession, exercise control over the property and business as it considers advisable, take conservatory measures and summarily dispose of perishable or rapidly depreciating property. Under subsection 47(3), the appointment is made only if necessary to protect the debtor’s estate or the creditor’s interests.
What to ask
- What the court order directs the interim receiver to do
- Whether a sale needs court approval
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Government of Canada (Department of Justice)GovernmentBankruptcy and Insolvency Act, R.S.C. 1985, c. B-3
- 02Office of the Superintendent of Bankruptcy CanadaRegulatorDefinitions
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