Legal Blog

Fraudulent Conveyance / Preference

Bearsfield Developments Inc. v. McNabb 2016 Ont SCJ

Employee embezzled funds between 2006 and 2011 and then retired. In 2012, she paid $207,000 to an insurer for an annuity. An annuity, or a registered plan with an insurance component, cannot be seized and sold by a creditor. One month later, the employer discovered the embezzlement. The employee was ultimately convicted and the employer obtained a default judgment of approximately $1 million. Their employer moved under the Fraudulent Conveyances Act to set aside the transfer of the money into the annuity. Even though the employer was not a creditor at the time of the transfer, the court held that the employee had an intent to defeat the employer by way of the transfer of seizable money into a non-seizable asset. The court set aside the transfer.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.