Can a bankrupt dispose of a surplus before the creditors have been paid full?
British Columbia, Canada
The following excerpt is from Lasersight Inc. v. Wiese, 2001 BCSC 1791 (CanLII):
Bird v. Philpott is cited from time to time for the proposition that a bankrupt is entitled, as cestui que trust, to any surplus, and the trustee in bankruptcy is accountable to him. Counsel have cited no authority, and I am aware of none, which relies upon Bird v. Philpott for the proposition that the bankrupt may dispose of a surplus before the creditors have been paid in full and the amount of the surplus has been ascertained. Insofar as Bird v. Philpott suggests that this is possible, I would respectfully decline to follow it.
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