On August 25, 2023, the British Columbia Supreme Court granted the first reverse vesting order (RVO) in British Columbia receivership proceedings “solely for the purpose of achieving a tax benefit”.

In Peakhill Capital Inc. v Southview Gardens Limited Partnership, 2023 BCSC 1476, Justice Loo approved a sale resulting from a receivership over real estate in South Vancouver. Cenyard Southview Gardens Ltd. (the Purchaser), an entity related to the second-ranking secured creditor in the receivership proceedings, Cenyard Pacific Developments Inc. (Cenyard), offered to purchase the real property. There were two alternative transaction structures put in front of the Court to complete the sale of the property. Firstly, there was the “Primary Transaction”, under which the Purchaser would acquire all of the issued and outstanding shares in the corporation (the Nominee) that held the real property, by way of an RVO. Or secondly, there was the “Alternative Transaction”, under which the Purchaser would acquire the real property by way of a traditional vesting order.

This article was originally published on Law360TM Canada (www.law360.ca), part of LexisNexis Canada Inc and the full article can be viewed here.