Law360 Canada (July 31, 2024, 4:11 PM EDT) -- Appeal by Appellants from a judgment of the British Columbia Court of Appeal Court, which upheld a chambers judge’s conclusion that administrative penalties and disgorgement orders came within the exception set out in s. 178(1)(e) of the Bankruptcy and Insolvency Act (BIA). The Appellants were undischarged bankrupts. They had engaged in market manipulation that caused vulnerable investors to lose millions of dollars. The Respondent ordered the payment of administrative penalties by both Appellants. It also issued disgorgement orders. These sanctions were registered with the Supreme Court of British Columbia. The Respondent applied for a declaration that the amounts owed to it by the Appellants would not be released by any order of discharge. The chambers judge granted the Respondent’s application finding that the debts were exempt from and would survive any discharge. The Court of Appeal dismissed the appeal. It disagreed that the sanctions fell within s. 178(1)(a) of the BIA but agreed that they fell within the exemption defined in s. 178(1)(e) of the BIA. The question before the Court was whether the administrative penalties or the disgorgement orders imposed by the Respondent fell within the exceptions of ss. 178(1)(a) or 178(1)(e) of the BIA. If so, they would not be released by any order of discharge and would survive bankruptcy....