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Jul 6, 2015

Champerty and Maintenance Revisited - Considering the Assignment of Litigation by Companies in Receivership

*This article appeared June 17, 2015 issue of Aird & Berlis LLP Financial Services Flash and is written by Brett Kenworthy.

On May 1, 2015, the Alberta Court of Appeal rendered its decision in 1773907 Alberta Ltd. v. Davidson, 2015 ABCA 150, and allowed an appeal permitting an action, brought in the name of an insolvent company, to proceed, notwithstanding that the company had assigned this claim to a third party. As will be discussed, the assignment of an action to a third party is often found to be caught by the doctrines of champerty and maintenance, and the decision by the Court serves to identify where such an assignment will be permitted.

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