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Bankruptcy and Insolvency Act

Version of section 65.2 from 2002-12-31 to 2004-12-14:

Marginal note:Insolvent person may disclaim commercial lease

  •  (1) At any time between the filing of a notice of intention and the filing of a proposal, or on the filing of a proposal, in respect of an insolvent person who is a commercial tenant under a lease of real property, the insolvent person may disclaim the lease on giving thirty days notice to the landlord in the prescribed manner, subject to subsection (2).

  • Marginal note:Landlord may challenge

    (2) Within fifteen days after being given notice of the disclaimer of a lease under subsection (1), the landlord may apply to the court for a declaration that subsection (1) does not apply in respect of that lease, and the court, on notice to such parties as it may direct, shall, subject to subsection (3), make such a declaration.

  • Marginal note:Where no declaration to be made

    (3) No declaration under subsection (2) shall be made if the court is satisfied that the insolvent person would not be able to make a viable proposal without the disclaimer of the lease and all other leases that the tenant has disclaimed under subsection (1).

  • Marginal note:Effects of disclaimer

    (4) Where a lease is disclaimed under subsection (1),

    • (a) the landlord has no claim for accelerated rent;

    • (b) the proposal must indicate whether the landlord may file a proof of claim for the actual losses resulting from the disclaimer, or for an amount equal to the lesser of

      • (i) the aggregate of

        • (A) the rent provided for in the lease for the first year of the lease following the date on which the disclaimer becomes effective, and

        • (B) fifteen per cent of the rent for the remainder of the term of the lease after that year, and

      • (ii) three years' rent; and

    • (c) the landlord may file a proof of claim as indicated in the proposal.

  • Marginal note:Classification of claim

    (5) The landlord’s claim shall be included in either

    • (a) a separate class of similar claims of landlords; or

    • (b) a class of unsecured claims that includes claims of creditors who are not landlords.

  • Marginal note:Landlord’s vote on proposal

    (6) The landlord is entitled to vote on the proposal in whichever class referred to in subsection (5) the landlord’s claim is included, and for the amount of the claim as proven.

  • Marginal note:Determination of classes

    (7) The court may, on application made at any time after the proposal is filed, determine the classes of claims of landlords and the class into which any particular landlord’s claim falls.

  • Marginal note:Section 146 not affected

    (8) Nothing in subsections (1) to (7) affects the operation of section 146 in the event of bankruptcy.

  • 1992, c. 27, s. 30
  • 1997, c. 12, s. 42

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