In what appears to be a first for a Court in British Columbia (if not a first, certainly in recent times), the British Columbia Supreme Court recently ordered a live auction following an application by a Receiver to approve a sale. The auction took place in front of a full courtroom and was lively until the last bid, generating a significant increase in value from the original offered purchase price. 

Deloitte Restructuring Inc. was appointed Receiver on March 4, 2025, of a 100-room luxury boutique hotel near the Vancouver airport in Richmond, BC. The property was listed for sale by Colliers in May 2025, and the marketing generating a fair amount of interest. An Agreement of Purchase and Sale (the Citation Agreement) was ultimately negotiated and signed with the preferred purchaser, Citation Property Holdings (Citation), an affiliate of a Hong Kong-based private real estate investment fund. This led to an application by the Receiver for an Approval and Vesting Order in respect of the Citation Agreement. The related application materials disclosed the CA$48 million purchase price under the Citation Agreement.

A representative of another potential purchaser, Silverport Properties Ltd. (Silverport), attended the sale approval hearing on October 23, 2025, and sought to participate by seeking to submit a sealed bid in an amount greater than the CA$48 million purchase price under the Citation Agreement. After hearing extensive submissions, the Court ordered the disclosure of the proposed competing bid from Silverport and ordered a live auction to be conducted in Court the following day.

At the live auction, the bidding went back and forth multiple times. When the Justice of the Supreme Court heard the last bid and brought the auction to a close, Citation had agreed to pay CA$51.5 million, which increased recovery for creditors by CA$3.5 million in mere minutes.

Although extremely unusual in insolvency proceedings, the live auction process seems consistent with recent guidance from the BC Court of Appeal. The live auction process simultaneously achieved the overarching goal of maximizing recovery for creditors in proceedings under the Bankruptcy and Insolvency Act (BIA)¹, while also balancing the factors relevant to sales processes in insolvency proceedings as recently considered in QRD (Willoughby) Holdings Inc. v. MCAP Financial Corporation.²

In British Columbia v. Peakhill Capital Inc, the BC Court of Appeal emphasized that the “goal of maximizing recovery for creditors is a bona fide purpose intended to further the objectives of the BIA.”³ In that case, the Court of Appeal was addressing the approval of a reverse vesting order (RVO) transaction in a receivership proceeding, specifically when such a deal structure was sought solely for the purpose of avoiding the payment of property transfer taxes. In confirming the jurisdiction to grant a RVO, the Court of Appeal stressed that the purpose and object of a receivership commenced under the BIA “is to facilitate and enhance the preservation and realization of the assets of an insolvent debtor for the benefit of the creditors.”⁴

Although maximizing recovery for creditors is clearly an overarching objective in a receivership proceeding, Canadian courts consistently engage with more specific considerations when approving sales in insolvency proceedings, often referred to as the Soundair factors. Similar to Peakhill, the Court in Royal Bank of Canada v. Soundair Corp (Soundair) stated that “[w]hile it is accepted that the primary concern of a receiver is the protecting of the interests of the creditors, there is a secondary but very important consideration and that is the integrity of the process by which the sale is effected,” which process is assessed by weighing the following factors:⁵

1. Whether the receiver has made a sufficient effort to get the best price and has not acted improvidently;
2. The interests of all parties;
3. The efficacy and integrity of the process by which offers are obtained; and
4. Whether there has been unfairness in working out of the process.

In many decisions, the integrity of the process factor has precluded competing “late bids” when the Court is faced with the approval of a transaction by a party that participated in the process fairly. Recently, the BC Court of Appeal considered how to weigh the Soundair factors in MCAP Financial.⁶ In MCAP Financial, the Court reiterated that a receiver is bound “to protect the interests of the creditors and to obtain the highest price it could for their benefit.”⁷ However, the delicate balancing process under the Soundair factors requires that the process is fair for all parties.

Unlike in MCAP Financial, in this case the marketing process conducted by the Receiver and resulting in the Citation Agreement was not at issue. The Court had a proposed sale approval order before it in the amount of $48 million to Citation that was acceptable to all parties. However, the Court was faced with a competing bidder that had shown up to the sale approval hearing with a sealed bid. As a result, the Court had to delicately balance the Soundair factors, while attempting to maximize recovery for creditors, given the “late bid.” In these circumstances, the Court exercised its discretion and crafted a pragmatic solution to allow an opportunity for further bids and greater recovery for creditors, while ensuring the process was fair to Citation and Silverport. The live auction allowed both Citation and Silverport to participate in the sales process on equal footing. Ultimately, the result for creditors was ideal, as the live auction resulted in Citation increasing its offer and the Court approving the sale.

Dentons Canada LLP is counsel for the Receiver.

For more information on this topic, please contact the authors, John Sandrelli, Eamonn Watson and Cassandra Federico.

1. Bankruptcy and Insolvency Act, RSC 1985, c B-3 https://canlii.ca/t/56fbr; British Columbia v. Peakhill Capital Inc., 2024 BCCA 246 [Peakhill] https://canlii.ca/t/k5jx0, at paras 21, 23, & 31, leave to appeal to the Supreme Court of Canada denied, per His Majesty the King in Right of the Province of British Columbia v. Peakhill Capital Inc., et al., 2025 CanLII 38366 https://canlii.ca/t/kbvmv ↩
2. QRD (Willoughby) Holdings Inc. v. MCAP Financial Corporation, 2024 BCCA 318 [MCAP Financial], https://canlii.ca/t/k6nnr ↩
3. Peakhill at para. 31. ↩
4. Peakhill at paras 21-25, citing Third Eye Capital Corporation v. Resources Dianor Inc./Dianor Resources Inc., 2019 ONCA 508l, at para 73. ↩
5. Royal Bank of Canada v. Soundair Corp., 1991 CanLII 2727 (ON CA) [Soundair], https://canlii.ca/t/1p78p, at paras 16, 42. ↩
6. MCAP Financial. ↩
7. MCAP Financial at para 70. ↩