Section 243 — Bankruptcy and Insolvency Act: Court may appoint receiver

Subject to subsection (1.1), on application by a secured creditor, a court may appoint a receiver to do any or all of the following if it considers it to be just or convenient to do so: take possession of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt; exercise any control that the court considers advisable over that property and over the insolvent person’s or bankrupt’s business; or take any other action that the court considers advisable. In the case of an insolvent person in respect of whose property a notice is to be sent under subsection 244(1), the court may not appoint a receiver under subsection (1) before the expiry of 10 days after the day on which the secured creditor sends the notice unless the insolvent person consents to an earlier enforcement under subsection 244(2); or the court considers it appropriate to appoint a receiver before then. Subject to subsections (3) and (4), in this Part, receiver means a person who is appointed under subsection (1); or is appointed to take or takes possession or control —

of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt — under an agreement under which property becomes subject to a security (in this Part referred to as a “security agreement”), or a court order made under another Act of Parliament, or an Act of a legislature of a province, that provides for or authorizes the appointment of a receiver or receiver-manager. For the purposes of subsection 248(2), the definition receiver in subsection (2) is to be read without reference to paragraph (a) or subparagraph (b)(ii). Only a trustee may be appointed under subsection (1) or under an agreement or order referred to in paragraph (2)(b). The application is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor. If a receiver is appointed under subsection (1), the court may make any order respecting the payment of fees and disbursements of the receiver that it considers proper, including one that gives the receiver a charge, ranking ahead of any or all of the secured creditors, over all or part of the property of the insolvent person or bankrupt in respect of the receiver’s claim for fees or disbursements, but the court may not make the order unless it is satisfied that the secured creditors who would be materially affected by the order were given reasonable notice and an opportunity to make representations. In subsection (6), disbursements does not include payments made in the operation of a business of the insolvent person or bankrupt.