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Legal Memorandum: Permissible Sales under PPSA

Issue: What types of sales are permissible under the British Columbia Personal Property Security Act (PPSA)?

Area of Law: Corporate & Securities, UCC & Secured Transactions
Keywords: Public or private sales of shares; British Columbia Personal Property Security Act ("PPSA")
Jurisdiction: British Columbia
Cited Cases: None
Cited Statutes: PPSA § 59(3), § 59(6) and (7), § 63, § 63(2)
Date: 02/01/2010

Sale of the shares may be accomplished by private sale or public sale, including a public auction or closed tender.  British Columbia Personal Property Security Act (“PPSA”) § 59(3).  Other than the notice requirements that must be satisfied prior to the sale, see id. § 59(6) and (7), the PPSA does not mandate any specific methods or procedures that must be followed in connection with any type of sale of collateral.  No British Columbia cases were located that discuss the requirements attendant to public or private sales of shares, or any other collateral for that matter, in this context.  But see Chapman v. Summer, 2009 BCSC 1591 (Sup. Ct. 2009) (discussing public sale of shares by bailiff under writ of seizure and sale and bailiff’s duties in connection with conducting the sale).

In case of serious doubt as to the proper procedures to be followed, a creditor could protect itself by applying to the court for approval of a proposed method of sale pursuant to § 63 of the PPSA which allows the court to make an order “giving directions to a person with respect to the exercise of the person’s rights or the discharge of the person’s obligations under [Part 5—Rights and Remedies Upon Default] of the Act.  Id. § 63(2).

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