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Dec 8, 2015

Financial Services Flash - Trustee Cannot Disclaim Bankrupt Landlord’s Lease

In Aventura, a recent decision of the Ontario Superior Court of Justice (Commercial List), the Honourable Justice Penny confirmed that a bankruptcy trustee does not have the authority, pursuant to section 30(1)(k) of the Bankruptcy and Insolvency Act, to disclaim a lease on behalf of a bankrupt landlord. Rather, a trustee’s authority to disclaim a lease is limited to situations where the bankrupt is the tenant. His Honour held that, where the bankrupt is the landlord and "[w]here the tenant is not in breach, neither the landlord, nor his trustee in bankruptcy, has the power to terminate the lease."

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