Receivers not entitled to blanket releases

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At the end of a court receivership, the final step is usually an application for orders approving their accounts including fees, and formally discharging them as receiver. In the past, such discharge orders included broad releases, absolving the receiver from any liability, present or future, for any action taken (or not taken) during the receivership.

In the recent BC decision of Re Redcorp Ventures Ltd., Justice Burnyeat took aim at such sweeping waivers, even questioning the court’s jurisdiction to consider such orders. The plain language of the proposed order insulated the Receiver from future liability and from liability even for gross negligence or wilful misconduct, both of which Justice Burnyeat held went too far.

Recorp joins a growing line of authorities in which such orders are being cut back to more reasonable protections for receivers.

Not all orders sought in receivership proceedings are appropriate, and anyone involved with such proceedings should seek legal advice to protect their position.

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