Industries Cover inc. (Syndic des)
2015 QCCS 136
PROVINCE OF QUEBEC
January 13, 2015
PRESIDING : THE HONOURABLE MICHEL A. PINSONNAULT, J.S.C.
IN THE MATTER OF THE BANKRUPTCY OF :
INDUSTRIES COVER INC.
GUARDIAN INDUSTRIES CANADA CORP., AN ONTARIO CORPORATION
GUARDIAN INDUSTRIES CORP., A DELAWARE CORPORATION
GESTION J&N BOUDREAULT INC.
OFFICE OF THE SUPERINTENDENT OF BANKRUPTCY CANADA
Mis en cause
JELD-WEN DU CANADA LTÉE
JUDGMENT ON MOTION IN ANNULMENT OF BANKRUPTCY, on motion of the Directors for review and directions and on MOtion for a CONFIDENTIALITY order
 The Court is seized with a Motion to Annul the Bankruptcy of Industries Cover Inc. (“Cover”) presented by the Petitioner, Gestion J&N Boudreault Inc. (“Gestion”), a Motion for Review and Directions presented by two of the directors of Cover, Mr. Michael Morrison (“Morrison”) and Mr. Richard Zoulek (“Zoulek”) and a Motion of Gestion for the issuance of an order of confidentiality that is contested by Jeld-Wen du Canada Ltée (“Jeld-Wen”), who filed an intervention.
 On Monday August 25, 2014, pursuant to a resolution passed on Friday August 22, 2014 by a majority of its directors, Cover filed a voluntary assignment in bankruptcy with PricewaterhouseCoopers Inc. acting as trustee in bankruptcy (the “Trustee”). On the same day, the bankruptcy was immediately stayed temporarily until August 28, 2014 by order of Mr. Justice Jean Lemelin.
 The present Motion to Annul the Bankruptcy of Cover (the “Motion to Annul”) was presented on August 28, 2014 by Gestion before Mr. Justice Brian Riordan, who granted Gestion’s request for a Safeguard Order and ordered the stay of the bankruptcy proceedings until final judgment on the present Motion to Annul (the “Stay Order”).
 The Trustee had also filed a Motion for Directions in which it sought an order to take possession of the assets of Cover and be allowed to exercise conservatory measures during the present proceedings. In its Stay Order, Justice Riordan did not authorize the Trustee to take possession of Cover’s assets, even on a conservatory basis. In fact, until now the Trustee was never vested in the property of Cover.
 Justice Riordan also ordered Cover, its directors and officers not to conduct any affairs outside the normal course of business.
 Other than conducting a somewhat distant monitoring of Cover’s business with Raymond Chabot Inc., an observer appointed by Justice Riordan, the Trustee has not been further involved in its capacity of Trustee to the bankruptcy of Cover, who attempts to continue to conduct its affairs in the normal course of business despite the present circumstances.
 Morrison and Zoulek also filed a Motion seeking directions from the Court with respect to their function as directors of Cover during the present proceedings.
 Cover is a Quebec corporation who specializes in the manufacturing of glass products, mainly (but not exclusively) insulated glass units (“IGUs”) that it sells to manufacturers of windows (industrial, commercial and residential).
 Cover operates in different plants in Quebec and New Brunswick with some 300 employees.
 Cover has two shareholders:
- Guardian Industries Canada Corp., an Ontario corporation, (“Guardian Canada”) holds 75% of Cover’s shares;
- Gestion owns the remaining 25%.
 Guardian Canada is a wholly-owned subsidiary of Guardian Industries Corp., a Delaware corporation (“Guardian”) with its head office in Auburn Hills, Michigan. Guardian is a worldwide glass manufacturer who supplies glass products to Cover, its principal raw material for its operations.
 Cover’s board of directors (the “Board”) is composed of three members, two designated by Guardian Canada and one by Gestion. On August 22, 2014, the three members of the Board were Morrison and Zoulek, both employees of Guardian and Mr. James Boudreault (“Boudreault”), the principal shareholder of Gestion, a Quebec corporation.
 Since its creation in 1990, the operations of Cover have always been conducted, inter alia, by Boudreault, its president and his son, Mr. Terence Boudreault (“Terence”), who acts presently as its vice-president finance.
 Guardian and Guardian Canada are not involved in the daily operations of Cover other than supplying the glass products required by Cover to manufacture, among other things, the IGUs.
 Jeld-Wen is a manufacturer of doors and windows who purchased IGUs from Cover and alleges that it was sold defective products. In July 2012, Jeld-Wen instituted a $4,621,900 lawsuit against Cover in product liability. The case is still pending and is actively contested by Cover. No trial date has yet been set.
 Cover was constituted in 1990 as a result of a merger of corporations in which Boudreault had a personal interest.
 The Court understands that over the years, Boudreault had developed a close relationship with the Late William Davidson (“Davidson”), president, chairman and CEO of Guardian. That relationship was such that around 1990, Guardian, through Guardian Canada, accepted to become a 50% shareholder of Cover.
 Their excellent relationship lasted beyond Mr. Davidson’s passing away in 2009 until Koch Industries became the majority shareholder of Guardian in or about December 2013.
 According to Gestion’s lawyers, that is when the “tide changed” for Boudreault and for Cover, its employees and clients who all became the collateral victims of Guardian and Guardian Canada’s abusive, if not illegal use of the provisions of the Bankruptcy and insolvency Act (the “BIA”) in order to extricate Guardian of certain financial obligations contracted in favour of Gestion since 1995 through four successive shareholders’ agreements.
- The Assignment in Bankruptcy Resolution of August 22, 2014
 In support of its Motion to Annul, Gestion essentially alleges that the resolution to have Cover file a voluntary assignment in bankruptcy was passed by Morrison and Zoulek, two of the three directors present at a special meeting of the board of directors (the “Board”), held on August 22, 2014 (the “Assignment in Bankruptcy Resolution”). It not only came as a total surprise and without any prior warning to Boudreault, the third director who voted against such a drastic and unwarranted resolution, but it was as well passed in flagrant violation of the provisions of the existing Shareholders’ Agreement that prevented the Board to proceed to Cover’s liquidation without the approval of Gestion, acting through Boudreault, its designated director.
 Moreover, at the special meeting of the Board, Boudreault realized that the main reason given to justify the bankruptcy of Cover was the recent “catastrophic” discovery by Guardian and Guardian Canada in July 2014 of an “unusual and alarming” rate of returned defective residential IGUs manufactured in 2011 (the “2011 Production”).
 Directors Morrison and Zoulek based their decision to adopt the Assignment in Bankruptcy Resolution on a report from MNP LLP (“MNP”) entitled “Cover Industries Inc. - Defect Liability - Financial Impact Assessment”, dated August 21, 2014 (R-6), addressed to Mtre Michel La Roche (“La Roche”), one of the attorneys for Guardian and Guardian Canada, who had ordered the same on August 12, 2014 (the “MNP Report”).
 MNP came to the conclusion that Cover was insolvent as its entire 2011 Production of 679 392 IGUs had to be replaced during the 15-year warranty granted by Cover to its customers, ending in 2026, at an estimated cost of some $42M. With such a contingent liability with a $37M value as at August 2014, Cover was clearly insolvent with only some $13.76M in assets. The fact that Cover was honouring its obligations and liabilities as they became due at the time without any pressure exercised by its creditors was irrelevant to MNP. If Cover had to replace its entire 2011 Production on a single day, namely on August 22nd, 2014, it just did not have the financial resources to do it.
 Therefore, Cover was insolvent on that day. Under such circumstances, Cover had to file for a voluntary assignment in bankruptcy, hence the resolution voted by Morrison and Zoulek.
 One of the problems raised by Gestion with such a conclusion is that the people that were actually operating Cover on a daily basis, and more particularly Boudreault and Terence, had never seen nor read the MNP Report before the special meeting of the Board on August 22nd, 2014. They had no prior knowledge of the preparations (obtaining the MNP Report, retaining the services of a trustee in bankruptcy, etc.) made by Guardian and Guardian Canada to put Cover in bankruptcy. Boudreault and Terence were taken completely by surprise and disputed the findings and conclusions of the MNP Report, Boudreault sought an adjournment of the meeting to be able to understand better this unexpected turn of events and to have the opportunity to submit the MNP Report to Ernst & Young, the auditors of Cover for their review and comments. Boudreault’s request was declined by his two colleagues who attended at the offices of the Trustee immediately after the meeting that ended abruptly.
 On that Friday afternoon, August 22, 2014, Morrison attended the offices of the Trustee with Zoulek or another colleague who was present at the special meeting of the Board, Mr. Thomas Pastore (“Pastore”) also of Guardian in order to sign the documentation required for Cover’s voluntary assignment in bankruptcy.
 On Monday August 25, 2014, the Trustee filed Cover’s voluntary assignment in bankruptcy while Boudreault’s lawyers successfully obtained the temporary stay of the bankruptcy proceedings. Gestion subsequently filed the present Motion to Annul Cover’s bankruptcy on the grounds that Cover was not insolvent on August 22 and 25, 2014 and that Guardian and Guardian Canada had abused the process of bankruptcy in order to avoid an $18 million financial obligation of Guardian in favour of Gestion stemming from a Shareholders’ Agreement binding the parties.
 As to the problems related to the 2011 Production, Boudreault and his son Terence stated that Cover was aware of the problem (as well as Guardian and Guardian Canada); that they took steps to correct the same as soon as possible in late 2011 and by 2012 the problem had been corrected. Most important of all, Cover is not only solvent but the company has always offered an after-sale service and honoured the warranty granted on its products. As far as they are concerned, Cover was and still is in a position to continue to do so as valid claims are made and honoured.
 Of course, if by a certain fiction, one expects Cover to replace in one day (August 22 or 25, 2014) the entire 2011 Production involving some 679 392 IGUs (that do not all need to be replaced) at an estimated cost of $42M, it would not be able to do so. In Gestion’s view, the 100% replacement scenario is an unrealistic and grossly exaggerated hypothesis.
 Guardian and Guardian Canada (collectively referred from time to time as the “Guardian Group”) are vigorously contesting Gestion’s Motion and maintain that Cover was indeed insolvent on August 25th, 2014 and that the bankruptcy proceedings are not only necessary but also in the interest of Cover’s creditors and customers who have defective products. The bankruptcy proceedings will prevent Gestion from becoming an unsecured creditor of Cover for $18 million and thus prevent Gestion from “competing” with the other creditors regarding any dividend that may eventually be paid by the Trustee. Their use of the provisions of the BIA is totally legitimate and guided by their genuine concerns for the customers of Cover.
 The Court notes that the Guardian Group’s reasons or justifications to provoke Cover’s voluntary assignment in bankruptcy evolved between the August 22, 2014 special meeting of the Board and the hearing of the present Motion to Annul.
 In their written contestation, Guardian and Guardian Canada alleged that Cover's assignment in bankruptcy was justified by multiple factors including, without limitation, the difficult and increased competitive glass industry market, Cover's steady declining financial performance, the pending multi-million dollar product liability lawsuits instituted against Cover, the drastic increase of its returns and allowances caused by the defective production of its 2011 insulated glass units, which Boudreault concealed from Respondents, resulting in replacement costs in excess of $3,500,000 since 2012 and liability exposure conservatively estimated at approximately $36,000,000 as well as Gestion Boudreault's $18,000,000 redemption right coming to fruition under the Amended Restated Shareholders Agreement (R-3).
 Not all these subjects were raised or discussed by Morrison and Zoulek at the August 22, 2014 special Board meeting to justify the adoption of the Assignment in Bankruptcy Resolution.
 Be that as it may, the Court also understands that besides the important expenses related to the defects stemming from the 2011 Production and anticipated to be incurred by Cover over the next 11-12 years based on a 15-year warranty period ending in 2026 and the potential liability stemming from two product liability lawsuits, Guardian also claimed that it had lost all confidence in Boudreault as a shareholder and as manager of Cover’s operations, in that the latter failed to disclose in a timely manner the “true” problems relating to the 2011 Production and Cover’s replacement program of the defective units. The Guardian Group alleges that it only became aware in July 2014 of the importance of the problems related to the 2011 Production. Boudreault contested such an assertion, adding that Guardian and Guardian Canada had constant and full disclosure of Cover’s financial and production situation and were fully aware of the higher than usual rate of returns linked to the 2011 Production, and well before August 2014. Cover had diligently corrected the situation and the subsequent productions did not have the same problems. Cover had to stand by its warranty with respect to its 2011 Production, but it certainly did not have to replace each and every unit, defective or not.
 During the hearing, the Guardian Group’s position evolved even further. In addition to the problems related to the 2011 Production raised at the August 22nd Board meeting, the Guardian Group now contended that each and every IGU that Cover manufactured until now was not only defective at 100% but did not have the necessary certification and, as such, the entire production had to be replaced, including the 2012, 2013 and 2014 productions.
 Moreover, the directors designated by Guardian intervened expressing the view that it was their duty as directors of Cover to notify as quickly as possible the many users of Cover’s products of the alleged generalised defects and lack of certification issues. A Canada wide advertising in newspapers was seriously being considered by them.
 Anyone intent on destroying a company and its goodwill could not think of a better solution.
 In the present context of the bankruptcy of Cover, the directors’ true intent to notify all purchasers or users of Cover products that the entire 2011 production is defective and that their products are not duly certified by a competent authority is seriously questionable. Was it motivated by their desire to have Cover provide them all with replacement products even if it was not necessary? Casting a serious doubt in Cover’s brand name and the quality of its products could only create an instantaneous and insurmountable liability that would undoubtedly provoke the immediate demise of the company. Again, under the present circumstances, what would have been the benefit of such an announcement for Cover’s customers and users of its products? None whatsoever in a scenario where those highly concerned directors had absolutely no intention to see Cover make good on its warranty program. In all appearances, the whole idea was guided by the Guardian Group’s goal to ensure that Cover will close permanently once and for all.
 The message conveyed by the Guardian Group, their designated directors and their lawyers was that Gestion’s Motion to Annul the bankruptcy of Cover is an exercise in pure futility if such a pan-Canadian announcement is made, if and when Cover’s bankruptcy is annulled.
 The principal questions that the Court must answer are the following ones:
- Was Cover an “insolvent person” on August 25, 2014, within the meaning of the BIA, when it filed for a voluntary assignment in bankruptcy?
- Did Guardian and Guardian Canada abuse the process of bankruptcy for illegitimate motives to the extent that it warrants that the Court’s exercises its discretion and annul Cover’s bankruptcy?
 Depending on the answer to those two questions, the Court will also have to deal with the Motion for Review and Directions of the two directors, Morrison and Zoulek, in which they seek the following:
“CONFIRM that, until a final decision is rendered in respect to the Motion to Annul the Bankruptcy of Cover, the Directors of Cover Industries Inc., including the Directors/Petitioners, are entitled to exercise all their functions and powers in accordance with the law;
ORDER James Boudreault and Terence Boudreault to provide the Directors/Petitioners with all the information and documents requested in the letter that was sent to them by the Directors/Petitioners on October 9th, 2014;
ORDER Cover, its officers, employees and representatives to fully collaborate with the Directors/Petitioners in the context of the exercise of their functions as directors of Cover Industries Inc., namely with regard to the issues raised by the Sale of non-certified IGU;”
 Given the fact that the Tribunal has already decided that the Stay Order, made by Justice Riordan on August 28, 2014, was to remain in full force and effect until judgment on the present Motion to Annul, the aforementioned conclusions are likely to become somewhat moot.
 However, during his pleadings, the lawyer for the directors Morrison and Zoulek indicated that if Cover’s bankruptcy was annulled or not, his clients would want to know what powers they would be able to exercise in their capacity as directors of Cover. Their lawyer emphasized in particular their alleged duty as directors to notify the public as soon as possible, inter alia, of the non-certification and of the generalised defects of the 2011 Production and subsequent ones for their immediate and full replacement. The Court shall deal with that issue later on in this judgment.
 Finally, the Court will have to rule on Gestion’s request that an order of confidentiality be made regarding certain testimonial evidence adduced in closed session (huis-clos) and certain exhibits that should remain sealed and unavailable to the public as they are presently. Jeld-Wen is contesting that Motion.
 Boudreault acquired his first company manufacturing IGUs in the early 1980s. Over the next years, he teamed up with Mr. Pierre Tardif (“Tardif”) on an equal basis and they acquired other IGUs businesses. In 1989, his companies formed the largest Canadian client base of Guardian, who supplied them with glass products, their main raw material. In 1989, Boudreault decided to approach Davidson, then president of Guardian. Boudreault wanted to negotiate with Guardian a more favourable supply arrangement and ideally, enter into a joint venture with Guardian in Canada.
 The two businessmen met in May 1989 and Davidson proposed to acquire 50% of the shares of the company that will become Cover in 1990, after the merger of Boudreault’s companies. Soon after, Guardian would own 50% of the shares, Boudreault 25% and Boudreault’s then partner, Tardif 25%.
 In 1995, Tardif wanted to withdraw and sell his shares in Cover. Davidson decided to acquire Tardif’s shares. That gave Guardian a majority position in Cover with 75% of its issued shares. Boudreault was uneasy about it, as the equilibrium (50/50) would be broken. Davidson reassured him. Boudreault should not worry; he would continue to manage and operate Cover. The idea of entering into a Shareholders’ Agreement was Davidson’s idea, according to Boudreault. The latter explained that one of the main purposes for such an agreement was to protect Boudreault, who was to become a minority shareholder and induce him as well to continue operating Cover for their mutual benefit.
 Boudreault’s protection came in the form of an option to have Cover redeem his (Gestion’s) shares during a three-month window period in 2000, five years later from September 1st, 2000 to November 30, 2000 (the “Option”). Boudreault reiterated that the Option was not only designed to protect him, but as well was to be an inducement to remain and continue operating Cover for the following five years. The Option also gave Guardian the possibility to acquire Boudreault’s shares in Cover (through Gestion) during the same three-month period window by having Cover redeem the same upon Guardian’s instructions. Guardian could then achieve full ownership of Cover. The parties also agreed on a mechanism to establish the purchase price with a minimum and on Guardian providing the Guardian Guarantee, as mentioned and defined hereinafter.
 The Shareholder Agreement was entered into in 1995 and was amended and restated three more times in 2000, 2004 and 2010.
 Given the nature of the arguments made by Gestion in support of its Motion to Annul and given that according to Gestion, the Assignment in Bankruptcy Resolution of August 22nd, 2014 was prompted mainly, if not solely, by Guardian’s determination to avoid any personal financial exposure stemming from the obligations it contracted with Cover and Guardian Canada in favour of Gestion via the Shareholders’ Agreement, it is necessary to examine the evolution of certain relevant provisions of the four Shareholders’ Agreements signed over the years.
 As certain of the provisions and obligations contracted by Cover and Guardian as a principal debtor in favour of Gestion in these Shareholders’ Agreements play a key and determining factor in the decision to put Cover in bankruptcy on August 22, 2014, according to Gestion, it is also necessary to identify these provisions and obligations and their evolution in time, as the case may be.
- The Shareholders’ Agreements
 On September 1st, 1995, Guardian Canada became the majority shareholder of Cover (75%) and from the onset, Gestion, Guardian and Guardian Canada entered into a Shareholders’ Agreement (R-4.2) (the “1995 Shareholders’ Agreement”) that was subsequently amended and restated on September 1st, 2000 (R-4.1) (the “2000 Shareholders’ Agreement”), on February 29, 2004 (R-4) (the “2004 Shareholders’ Agreement”) and on March 16, 2010 (R-3) (the “2010 Shareholders’ Agreement”).
 All Shareholders’ Agreements stipulate, inter alia, that the Board of directors will be composed of three directors. Boudreault is not only one of the three directors but was also given the responsibility to essentially continue to manage the daily operations of Cover with however, the obligation for the latter to purchase all its glass products, its principal raw material, from Guardian.
 Section 4 of the 1995 Shareholders’ Agreement (R-4.2) entitled “Options to Cause Redemption of Shares” created options in favour of Guardian (not Guardian Canada) and Gestion for Cover to redeem all the shares held by Gestion subject to the following terms and conditions:
“4.1 Each of Guardian and Gestion Boudreault will have the option, exercisable by written notice to the other and the Company between September 1, 2000 and November 30, 2000, to cause the Company to redeem the GB Stock [Gestion’s shares in Cover]. The purchase will be at the price computed in accordance with Section 6.1, with settlement to take place in accordance with Section 5.
4.2 Option Upon Death. Disability or Dismissal. Gestion Boudreault will have the option to cause the Company to redeem the GB Stock upon: (i) the death of James Boudreault, (ii) the permanent disability (as defined below) of James Boudreault, or (iii) the termination of James Boudreault's employment with Cover by Cover for any reason, with or without cause, exercisable by written notice to Guardian and the Company within ninety (90) days. In this Agreement, disability means Mr. Boudreault's inability to perform substantially all of his responsibilities as an employee for a period of 120 days due to illness or injury. The purchase will be at the price computed in accordance with Section 6.2 with settlement to take place in accordance with Section 5.
5.4 Redemptions Under Section 4. When GB Stock is being redeemed under Section 4, the settlement will take place by February 15, 2001, if Section 4.1 applies and within 60 days after receiving a written notice in the case of Section 4.2, and the Company will pay for the GB Stock by certified or cashier's check, or by wire transfer, at the settlement date.”
 In Section 6, entitled “Price”, the parties stipulated as follows the formula to be used and the price to be paid to Gestion for its shares in case of the exercise of the Option by either Gestion or Guardian:
6.1 Price Under Section 4. 1. The price for the GB Stock upon exercise of the option described in Section 4.1 will be the greater of:
(a) an amount equal to (i)(x) six times the average of the Company's consolidated earnings before interest and taxes (computed in accordance with Canadian generally accepted accounting principles) for the years 1999 and 2000, minus (y) the total consolidated borrowings of the Company as of December 31, 2000 multiplied by (ii)(x) the number of shares of GB Stock, divided by (y) the number of outstanding shares of common stock of the Company; or
(b) an amount equal to:
(i) $5,250,000.00, plus
(ii) the excess, if any, of $1,575,000.00 over the aggregate amount of dividends paid by the Company to Gestion Boudreault with respect to the period beginning January 1, 1996, and ending December 31, 2000.
6.2 Price for Purchases Under Section 3 and Redemptions Under Section 4.2. The purchase price of GB Stock under Section 3 and the redemption price of GB Stock upon exercise of the option described in Section 4.2 will be an amount equal to:
(i) $5,250,000, plus
(ii) the excess, if any, of:
(x) $1,575, 000 multiplied by an amount equal to (I) the number of months that have elapsed between January 1, 1996, and the date of settlement of the purchase, divided by (II) 60, over
(y) the aggregate amount of dividends paid by the Company to Gestion Boudreault with respect to the period beginning on January 1, 1996, and ending on the earlier of the settlement date or December 31, 2000.”
 For the purposes hereof, the Option that is of interest here is the one created in section 4.1.
 The 1995 Shareholders’ Agreement also provided for its termination upon the dissolution or the bankruptcy of Cover :
This Agreement will terminate upon the earliest to occur of: (a) dissolution or bankruptcy of the Company or (b) the date on which one person or entity owns all of the Company's common shares.”
 Finally, at the end of the 1995 Shareholders’ Agreement, Guardian agreed to be bound as a principal debtor, specifying “not merely as surety” and guaranteed the performance by Guardian Canada of all its obligations under that Agreement as follows:
“12. Guarantee by Guardian. Guardian, hereby waiving the benefit of division and discussion, agreeing to be bound as principal debtor and not merely as surety, guarantees the performance by Guardian Canada of all of Guardian Canada's obligations under this Agreement.”
[the “Guardian Guarantee”]
 Although it is not specifically stated in the said Agreement, the Guardian Guarantee was necessarily for the benefit of Gestion.
 In the 2000 Shareholders’ Agreement, the clauses that are of particular interest in this matter remained essentially the same, except that the Option could then be exercised by either Guardian or Gestion between September 1, 2005 and November 30, 2005 at a minimum price for Gestion’s shares increased from $5,250,000 to $8,000,000 (Section 6.1 (b)(i)).
 Moreover, in the 2000 Shareholders’ Agreement, Guardian Guarantee is broadened to include as well Cover’s obligations under it:
“12. Guarantee by Guardian. Guardian, hereby waiving the benefit of division and discussion, agreeing to be bound as principal debtor and not merely as surety, guarantees the performance by Guardian Canada and the Company of all of Guardian Canada's and the Company's obligations under this Agreement.”
 In the 2004 Shareholders’ Agreement, the parties agreed that henceforth Gestion would, to all intents and purposes, also enjoy a right of veto should the Board wish to “liquidate” Cover:
“1.1 […] The Company will not, without the approval of Gestion Boudreault: (i) amend its articles or bylaws (other than ministerial or technical changes that do not affect any substantial rights of any shareholder); or (ii) sell assets which are responsible, in the aggregate, for 40 percent of the sales of the Company; or (iii) sell the shares of a subsidiary or a subsubsidiary; or (iv) amalgamate or merge with another company; or (v) liquidate the Company.”
 Incidentally, Gestion raised in the present proceedings that the Assignment in Bankruptcy Resolution was illegally adopted in violation of that specific clause as Boudreault’s objection and negative vote was disregarded by Morrison and Zoulek.
 Guardian’s lawyers responded that bankruptcy did not fall within the ambit of the expression “liquidate” contemplated in the said Section 1.1.
 The right of veto conferred upon Gestion in case of the Board deciding on the liquidation of Cover, pursuant to Section 1.1 of the 2004 Shareholders’ Agreement, did not exist in the two previous Shareholders’ Agreements.
 Furthermore, in 2004, the three-month window Option to redeem Gestion’s shares in Cover was moved to September 1, 2010 and the minimum purchase price was increased again to $9,000,000 from $8,000,000 in the previous Agreement (Section 6.1 (a)(2)(i)).
 In 2010, the last Shareholders’ Agreement which is the current one, was entered into and the parties agreed to amend it in order to reflect another change in the three-month window to exercise the Option, starting on September 1, 2014 and the minimum price was once again increased substantially from $9,000,000 to $18,000,000 (Section 6.1 (a)(2)).
 The Guardian Guarantee and all other relevant clauses remained unchanged in the 2010 Shareholders’ Agreement.
 As September 2000 was getting closer, Davidson approached Boudreault and asked him not to exercise his Option. He wanted Boudreault to remain with and continue operating Cover for another five years until 2005; hence, the 2000 Shareholders’ Agreement was signed. The minimum purchase price was increased as previously indicated.
 The same situation occurred in February 2004 and caused the 2004 Shareholders’ Agreement to be executed. The new three-month window period was set to start on September 1st, 2010. Boudreault continued to operate Cover.
 Unfortunately, Davidson passed away in 2009.
 In 2010, the then management of Guardian, represented by Morrison, asked Boudreault once again not to exercise the Option and proposed that the 2010 Shareholders’ Agreement be signed with a minimum purchase price of $18M, also negotiated by Morrison. The latest Option could be exercised by either Guardian or Boudreault between September 1st, 2014 and November 30th, 2014.
 In the spring of 2013, Morrison came to Montreal to meet with Boudreault. Morrison was accompanied by Mr. Scott Thompson, also of Guardian. Boudreault testified that Morrison asked him not to exercise the Option in September 2014 and stay with Cover for an additional two-year period until the end of 2016.
 Morrison also proposed that Guardian, through Guardian Canada, would buy 14% of Gestion’s 25% shareholding in Cover for some $10M based on the $18M minimum purchase price agreed upon in the 2010 Shareholders’ Agreement. The Option would be amended to be exercised in 2016 at a minimum purchase price of some $8M, again based on the existing minimum purchase price of $18M.
 Boudreault agreed and Guardian prepared the necessary documentation with the intention to make the $10M purchase transaction before the end of the year 2013.
 Guardian’s following internal memo, dated October 31, 2013 (R-20), communicated to Boudreault the outline of the agreed transaction:
Guardian Industries Corp. Confidential
October 31, 2013
Guardian Industries Canada Corp ("GICC") is a wholly-owned subsidiary of Guardian Industries Corp. ("Guardian"), a Delaware corporation. GICC owns 100% of the Class A Shares (750,000 shares, all issued and outstanding) of Industries Cover (“Cover”), a Quebec corporation. Gestion J&N Boudreault Inc. ("Boudreault Inc.") a Quebec corporation owns 100% of the Class B Shares (250,000 shares, all issued and outstanding)
B. Proposed Transaction
Guardian would purchase 14% of additional equity in Cover to prepare for a potential amalgamation of GICC and Cover in the future which would result in a new entity ("Amalco"). By amalgamating GICC and Cover, Amalco could utilize the existing Net Operating Loss (NOL) asset held by GICC today against Cover profits. The potential amalgamation will not occur in fiscal year 2013, and will be under review again in 2014.
As Guardian is obligated to purchase the remaining equity held by Boudreault Inc at the end of James Boudreault's employment contract, Guardian has decided to break up that purchase and to purchase 14% prior to the amalgamation.
C. Transaction Summary
• GICC to acquire an additional 14% (140,000 shares) equity in Industries Cover
• Purchase price of shares calculated at $10,080,000 CAD
• Share purchase to take place on or prior to December 31, 2013
Note: Employment contract to follow”
 By email dated December 9, 2013 (R-20), Mr. A.J. Berres (“Berres”) of Guardian’s Corporate Development, sent to Boudreault and Terence drafts of an Amendment to the 2010 Shareholders’ Agreement (the “Amendment”) and a Share Purchase Agreement.
"Hi Guys -
9 décembre 2013 11:38
Terence Boudreault; James Boudreault
Contracts & Share Purchase
Cover - Amendment to Shareholders Agreement - December 5.docx; Cover - Stock Purchase Agreement - December 5 2013 Draft.doc; Third Amendment - Boudreault.docx
Attached are the contract drafts. Please review and let us know when you would like to discuss this week.
These items that are required to close are still outstanding:
*These items are needed by Dec 20th at the latest so please let me know if you have issue obtaining any of them
1. Original minute book
2. original share certificates
3. wire instructions
4. J&N Boudreault Resolution (we have asked our counsel in Canada to prepare this on your behalf to save you time)
Assuming everything is agreed upon and in place by December 20th, we will be ready to fund. Please let me know if there is any condition or situation that would require funding prior to December 31st.
 The draft Amendment attached to Berres’ email confirmed that the Option could be exercised during a three-month window commencing on September 1st, 2016. If Gestion exercises the Option, its shares will be purchased by either Cover or Guardian Canada, at the latter’s discretion.
 The Court notes that Section 4.2(a) of the 2010 Shareholders’ Agreement was to be modified in order to provide that Guardian Canada would purchase Gestion’s shares should there be a negative impact to Cover purchasing the said shares and that the applicable financial tests could not be met as a result thereof:
“The first clause of Section 4.2(a) of the Shareholders' Agreement is hereby deleted in its entirety, and replaced with the following:
4.2(a) Gestion Boudreault will have the option to cause the Company or Guardian Canada (at Guardian Canada's option, it being understood that upon the death of James Boudreault, if there is no negative impact to the Company to purchase the GB Stock and that the financial tests set forth under the applicable laws are met, the Company will purchase the GB Stock rather than Guardian Canada) to purchase the GB Stock upon:…”
 The amended Option would carry a minimum purchase price of $7,920,000. As Guardian Canada was to acquire an additional equity of 14% in Cover from Gestion and pay $10,080,000, the “amended Option” carrying a minimum purchase price of $7,920,000 reflected the current minimum purchase price of $18M.
 The documents attached to the email (R-20) also reveal that Guardian was seriously contemplating merging Cover with Guardian Canada for tax considerations and that Boudreault was called upon to give his consent thereto.
 Boudreault forwarded the email to his lawyers, who provided their comments back to Berres. Everything seemed to work just fine.
 The December 9th, 2013 email (R-20) will be the last written communication between the parties concerning this proposed transaction. In fact, it will never materialise.
 On a different note but related however to the issue of dividends, in early December 2013, at the very same time that the parties were exchanging draft contracts regarding Gestion’s $10M share purchase, Boudreault received another letter whose contents surprised him. Cover was showing a $500,000 profit for the year 2013, but Guardian wanted Cover to declare a $5M dividend before the end of December. Boudreault objected to it as it was unrealistic to declare such a large dividend under such circumstances. He added that Morrison contacted him and urged him to give his consent. Morrison explained to him that Guardian was, to all intents and purposes, doing Gestion a favour. If the $5M dividend is declared and paid before the $10M transaction is completed, Gestion was certain to be entitled to a dividend based on its current 25% shareholding as opposed to only 11%, Gestion’s expected remaining shareholding in Cover after the $10M purchase transaction. As Gestion’s stake in Cover was to be significantly reduced with only 11% and 89% for Guardian Canada, Morrison finally managed to convince Boudreault to go along with a major dividend but Morrison accepted Boudreault’s condition to reduce the declared dividend from $5M to $4M.
 In retrospect, Guardian is now blaming Boudreault for having given his consent. Yet, if Boudreault did not have the interest of Cover at heart, he would not have objected to the disproportioned dividend and ultimately insisted on reducing it by $1M. In doing so, he was renouncing to an additional $250,000 dividend as opposed to $110,000 after the proposed transaction.
 On December 17, 2013, Boudreault, as director of Cover, signed a resolution prepared by Guardian’s legal department declaring the $4M dividend (R-15). The resolution was also signed by Zoulek, the only other director designated by Guardian Canada at the time. In fact, Cover only had a two-member Board of directors for some time. It changed on August 6th, 2014, when Morrison was added as the third director. Boudreault did not realize at that time that Morrison’s appointment was to give Guardian a majority of votes for the first and last special meeting of the Board that was about to be called a few days later.
 At that time, Boudreault never anticipated either that the $10M share purchase with Guardian or Guardian Canada would not take place.
 Terence testified that in March 2014, he spoke to Berres about the $10M transaction. Berres apologised. “We have egg on our face.” There was apparently a new procedure that had been put in place and Guardian’s board wanted to perform a due diligence process. It came to a surprise to Terence. Why would Guardian want to perform a due diligence process of a company that it owns at 75% for more than 20 years and that generated $81,496,000 in dividends during that period?
- Guardian’s Due Diligence of Cover
 As previously indicated, December 31st, 2013 went by without the $10M transaction being completed with regard to the purchase by Guardian Canada of a portion of Gestion’s shares in Cover.
 Boudreault was not given any explanation other than the one offered by Berres to Terrence. In April 2014, Morrison called Boudreault to say that due to the new ownership of Guardian, they had to proceed with what he called a due diligence process of Cover, an astonishing news knowing that Guardian already owned 75% of Cover and had already agreed to acquire 89% of it by the end of 2013.
 Be that as it may, Boudreault agreed to go along with the exercise. There were meetings and interviews with lawyers and numerous documentation and information was supplied as requested. Guardian even requested to get the entire backup of all emails in Cover’s servers. Boudreault obliged.
 On August 13, 2014, Mr. Thomas Pastore (“Pastore”) of Guardian sent to various persons, including Boudreault, an email (D-13) with due diligence reports on accounting, tax and environmental subjects. These attachments are not the actual reports but rather some sort of executive reports.
 Among the attachments, is a document entitled “Cover IG Product Warranty Reserve Analysis - December 2013”. The document dealt with the reserve needed on December 31, 2013 to take into consideration the cost of returns or replacement of IGUs under warranty. The 2011 Production was showing an abnormally high rate of returns already. A reserve of between $2M and $5M should have been allocated for it by Cover with the real exposure being closer to the $5M mark.
 The Court notes that this report mentions a reserve with a range between $2M and $5M for the 2011 Production.
 We are now on August 13th, 2014, a few days before the special meeting of the Board when the Assignment in Bankruptcy Resolution will be passed with a $42M estimated liability for the same production based on a 100% replacement rate.
 Why then give such a document to Boudreault on August 13th, 2013 that suggests that Cover should have only allocated a reserve of $2M to $5M for the replacement of the defective IGUs of the 2011 Production when Guardian itself had already decided that a 100% replacement rate was applicable? One has to bear in mind that on the previous day, August 12th, 2014, the lawyers for Guardian and Guardian Canada had given a mandate to MNP LLP to establish the damages stemming from the 2011 Production with a 100% failure rate. This mandate will turn out to be the second attempt since the beginning of August 2014 by the lawyers to get an accounting firm to quantify the damages stemming from the 2011 Production.
 At the time, Guardian never informed Boudreault of the mandate given to MNP and did not identify the subject of the bankruptcy of Cover in the agenda of the August 22nd, 2014 special meeting of the Board.
 On the accounting side, the executive report identified, inter alia, the declining financial performance of Cover who generated less sales since Cardinal, Guardian’s competitor, had entered the Canadian market, an unrecorded IGUs warranty liability of between $2M to $5M (estimated to be closer to the higher number), Jeld-Wen lawsuit (that was known since July 2012) and Cover’s dealings with parties related to Boudreault and members of his family, including the use of an helicopter.
 On that latter issue, the evidence will show that Boudreault’s dealings with related parties and the use of the helicopter were duly authorized in the past with proper resolutions signed as well by the two directors designated by Guardian, who was clearly aware of the situation and approved it at the time.
 In July 2014, it suddenly became an issue.
 On the tax front, no risks were identified or issues found and no significant issues were found on the environmental side.
 As part of the due diligence process dealt with the 2011 Production, it is necessary to examine the relevant facts relating thereto.
- The 2011 Production of IGUs
 The evidence reveals that in late 2009, Cover was contemplating automating its manufacturing process of the IGUs. Cover wanted to acquire and use machines that would automatically apply a sealant between the glass windows and the Inex spacer placed in between. Until then, the fabrication of the IGUs was essentially done manually.
 The use of Erdman machines to automatize the sealant application process was deemed to improve the durability of Cover’s products. However, the new process required a different type of sealant to be used. At the request of Cover, tests were conducted by HB Fuller at the end of 2009 and in the first half of 2010, in order to determine the suitable sealant to be used with the Erdman machine and the Inex spacer that is made of plastic material. In fact, with the Erdman machine, Cover could no longer use the polyurethane sealant that was currently applied manually. The machine required a hot melt sealant.
 Cover had HB Fuller test various IGU samples in a P1 Chamber where they remained for more than 20 weeks. The Court understands that the P1 Chamber serves to test IGUs durability and suitability as well as to certify products. A one week period in a P1 Chamber is equivalent to a one year period in a normal environment. In other words, an IGU successfully passing a 20 week test in the P1 Chamber indicates that under normal condition, the IGU would perform as expected during 20-year life.
 By the end of June 2010, Cover had HB Fuller tested five IGUs with a HL5130 sealant, six IGUs with the Bostik 5192 Sealant and seven IGUs with HL 5160C sealant. All IGUs were assembled on December 16, 2009 with an Erdman machine using the three different sealants.
 In an email sent on June 23, 2010 (R-17), Mr. Thomas Kopacz (“Kopacz”) of HB Fuller, reported to Mr. François Ouellette (“Ouellette”), an engineer employed by Cover that, among other things, four of the six IGUs assembled with the Bostik 5192 sealant successfully passed the 22 week test:
Attached is the June 23rd update on the Cover lnex spacer units in P1.
This is the 20th week point for 5160-C-149 and the 22nd week for 5130 and the 5192.
The last frost point measurements shows that an additional unit manufactured with Bostik 5192 has a frost point above
-80F and the last unit with HL-5130 also failed.
-4 of 6 Bostik 5192 units remain at -80F.
-5 of 7 HL-5160 units remain at -80 NF, One unit is at -70F - 0 of 5 HL-5130 units remain at -80 N
Luc Beliveau will be contacting you to schedule a conference call to discuss what further analysis should be done to evaluate these or any additional units.
Window Technical Services Manager”
 On August 3, 2010, the email in question to which were attached the actual detailed results of all the tests performed by HB Fuller (R-17) was sent to Morrison and to Mr. Jeremy Wong (“Wong”), a senior analyst who worked at Guardian with Morrison.
 Cover could not acquire the Erdman machines for its plants without the prior approval of Guardian. In order to obtain Guardian’s approval, Morrison’s department had to recommend internally the proposed acquisition with a Capex report (Capital expenditure). This email was part of a series of information and data provided by Cover to Guardian (Morrison’s department) for the preparation of the Capex report. Obviously, if Morrison did not approve the Capex, Cover would have never gone ahead with its proposed acquisition of the Erdman machines at a cost in excess of $1.8M.
 The Capex report prepared by Wong of Morrison’s department mentioned:
“As a strategic response, Cover initiated its own P-1 testing in collaboration with two hot melt butyl suppliers: HB Fuller and Bostick. The tests were started in Dec 2009 and are still in progress after 23 weeks as at Jul 3, 2010, with most units passing the 20-week mark with hot melt butyl from both manufacturers. Based on the success of the P-1 tests, Cover is moving ahead with the decision to switch from the polyurethane sealant to hot melt butyl for all its IG units. It is believed that the improved durability of the hot melt butyl, combined with the energy efficiency characteristics of the INEX spacer, will provide Cover with a very potent competitive edge in the market place with retaining existing customers, attracting new customers, as well as taking back the lost business from Jeld-Wen. The strong test results (over 20 weeks in P-1 chamber is equivalent to approximately 20 years in the field) could also provide Cover compelling arguments to neutralize competitive threats from Cardinal, and the 20-year warranty that Cardinal offers.”
 Following Morrison’s Capex Report, Guardian approved the acquisition of the Erdman machines and the production of IGUs with the use of Erdman machines started in 2011. After the above mentioned tests that were described by Wong in his Capex recommendation as “successful P-1 tests”, it was decided to use the Bostik 5192 Sealant with the Inex spacer.
 It must be noted that none of the three sealants used in the tests came out with 100% successful test results. However, the Bostik 9152 sealant had 4 of 6 IGUs successfully passed the 22-week mark (66.6%) and a fifth one had successfully passed the 15-week test that is the equivalent of 15 years of normal use and of the 15-year warranty given by Cover. In other words, those P-1 Chamber tests communicated to Guardian and directly to Morrison on August 3rd, 2010, showed an 83% success rate for 5 of the six IGUs assembled with Bostik 9152 for a minimum 15-week period (the equivalent of Cover’s 15-year warranty).
 Morrison will testify at the hearing that he only discovered the existence of the HB Fuller tests in July 2014 and insisted that a single failure in the P-1 Chamber tests meant a 100% failure rate.
 Unfortunately, the 2011 Production of residential IGUs was determined to be problematic in that the Bostik 5192 sealant did not always bond well to the Inex spacer, causing potential leakage and a shorter life period. A greater than normal rate of return of IGUs of the 2011 Production started showing in 2012 and accentuated in 2013. Even Guardian noted the unusual increase in June 2013 (D-5) and sent one of their own specialists to Quebec for one week during that month, according to Morrison’s affidavit of September 18, 2014 (par. 159, 160 and 161).
 Cover had already identified the problem towards the end of 2011 and replaced the Bostik 9152 sealant with a more appropriate one. Cover completed in 2012 the phasing out of the manufacturing using Bostik 9152 sealant that it had started at the end of 2011.
 The replacement sealant used since then by Cover does not cause the problem.
 Yet, the Guardian Group has adopted in the present proceedings the surprising position that it only discovered in July 2014 the existence of the problems related to the 2011 Production and that Boudreault concealed this crucial information ever since December 2009 when he allegedly received the HB Fuller Technical Report (D-11).
 The Guardian Group, through Morrison’s very lengthy and detailed affidavit made in support of their contestation of the present Motion, claims that they only discovered in July 2014 the existence of a report of tests conducted by HB Fuller dated December 16, 2009 (D-11). In his affidavit, Morrison blamed Boudreault for proceeding with the 2011 Production with the Bostik 9152 sealant despite a “negative Fuller report” (D-11) that indicated a failure rate of 66.6% of the sampled units manufactured with the lnex spacer and the secondary Bostik 5192 sealant.
 The preponderant evidence shows that these allegations made by Morrison are false.
 Firstly, the HB Fuller Technical report (“Technical report”) dated December 16, 2009 (D-11) mentioned by Morrison, appears to be a synopsis of the same tests conducted at the time between December 17, 2009 and June 23, 2010 that were emailed to Morrison in August 2010 in order to get his authorization (and Guardian’s) to acquire the Erdman machines.
 Secondly, the Technical report could not possibly exist on December 16, 2009 and Boudreault could not know of the problem with the Bostik 5192 sealant on that date, as the tests had not even started. In fact, the actual detailed results annexed to the Technical report show that the various IGUs used by HB Fuller were assembled with an Erdman machine on December 16, 2009. The tests in the P1 Chamber started on the following day December 17th and lasted until June 23, 2010. The detailed results also reveal that four of the six IGUs made with the Bostik 9152 sealant successfully passed the 22 week test (and a fifth one passing the 15-week mark). In reality, it was a 66.6% success rate and not a 66.6% failure rate for 4 of the 6 tests (and an 83.3% for 5 of the 6 tests after 15 weeks). [Emphasis added]
 It is true that the synopsis in the Technical report itself indicated that four of the six IGUs with the Bostik 5192 sealant had failed. But, it turned out to be an error made by the person who wrote the synopsis in the interpretation of the actual results attached to it.
 But there is more.
 Guardian and Guardian Canada are claiming through Morrison’s affidavit that they were unaware of the results of these tests conducted in 2010 by HB Fuller.
 Yet, the evidence shows that Morrison himself had received the detailed results from Cover on August 3rd, 2010, as previously mentioned and with the correct interpretation of the actual test results.
 On that day, Ouellette, an engineer at Cover, had forwarded to Morrison and to his assistant Wong an email that Cover had received on June 23, 2010 (R-17) from Kopacz of HB Fuller in which the latter reported the good tests results and that, among other things, four of the six IGUs with Bostik 5192 had successfully passed a 22 week test. The detailed test results attached to that email confirmed the validity of Kopacz’s affirmation.
 Boudreault did not purposely decide to use the Bostik 9152 sealant “knowing that 66.6% of the test IGUs had failed”, contrary to Morrison’s affirmation. It was the opposite and Morrison knew it as early as on August 3rd, 2010. In fact, Morrison’s own department recommended that Cover acquire the Erdman machines “Based on the success of the P-1 tests”. The Capex report specifically referred to also the Bostik 9152 sealant mentioned in the very same HB Fuller tests.
 In 2010, with Wong’s Capex report, Morrison recommended to Guardian to acquire Erdman machine and use them to manufacture IGUs. Guardian gave its consent to the recommendation contained in the Capex report that also referred to successful P-1 tests involving the Bostik 9152 sealant, the same tests that they allegedly only discovered in July 2014. During his cross-examination, Morrison was very evasive on this question, not remembering even having received that email at first and then confirming having received it.
 During his testimony, Morrison was asked about the contradiction in the Technical report synopsis (D-11) when compared with the actual test results annexed to it. Morrison simply dismissed it by responding that he was not “a technical person”. In doing so, Morrison tried to let the Court believe that he did not have the abilities or knowledge to interpret such technical test results. With all due respect, the Court cannot believe for a moment that Morrison, an experienced executive employed by Guardian since the 1980s and having occupied important executive functions even abroad in a world leading glass manufacturing company, cannot read test results involving glass products like the ones submitted by HB Fuller in 2010 (R-17). The Court cannot believe that Guardian would leave the control of the expenditure of substantial funds to acquire equipment in the glass manufacturing business to such an unexperienced person unfamiliar or incapable of understanding detailed P-1 Chamber test results that are far from being uncommon in the glass window industry.
 The Court has serious doubts about the credibility of the witness. Other components of his testimony will contribute to undermine his credibility in the eyes of the Court.
 Be that as it may, the alleged “sudden and alarming” discovery during the summer of 2014 by the Guardian Group of the 2011 Production failure was the keystone of the latters’ strategy to provoke to bankruptcy of Cover.
 This alleged “sudden and alarming” discovery in July 2014 has led the Guardian Group to the immediate conclusion that the entire 2011 Production of some than 679,392 residential IGUs was defective and that each unit had to be replaced. This conclusion was reached by Guardian and Guardian Canada without ever discussing the same in any detail with anyone at Cover.
 As previously mentioned, Boudreault and his son Terence agreed that there was a bonding issue between the Inex spacer and the sealant Bostik 9152 used in the 2011 Production of residential IGUs. However, Cover had dealt with the problem and had actively replaced defective IGUs since 2012. The in-house financial statements communicated monthly to Guardian revealed the increase in the rate of return.
 By July 2014, three years later, the return rate had reached 7.33%, clearly a higher than usual rate compared to past and subsequent productions, but not as catastrophic as Guardian pretends. At the hearing, the return rate had reached 7.9%. In their minds, the returns were expected to continue for a while and peak. They insisted that not all IGUs will fail. If the defects were such that Guardian now claims, the return-rate would have already been far greater, which is not the case.
 But first and foremost, Cover was always in a position to honour its warranty and was doing so to satisfy its client base and the latter’s clients. Obviously and unfortunately, Cover’s profits would undoubtedly suffer for a while but the company has been good to its shareholders with more than $81M paid in dividends. Cover could continue to honour its obligations and, if necessary could count on the support of its shareholders.
- The special meeting of the board of directors of Cover - August 2014
 On August 6, 2014, Morrison was appointed to Cover’s Board of directors to join Zoulek and Boudreault. Incidentally, Boudreault pointed out that in 23 years, Cover’s Board of directors never met in person, not even once. The Board’s resolutions were always passed without any physical meetings. No physical meetings, no votes, no need to have three directors until August 6, 2014. Boudreault did not know at the time the reasons underlying Morrison’s return to Cover. He did not know that a special meeting of the Board would be called soon, that a vote would take place and that Guardian needed to ensure a majority of that vote.
 On or about August 11, 2014, Boudreault received a Notice of a special meeting of the Board of the directors of Cover. The Notice indicated that the meeting would be held on August 18, 2014 at Guardian’s head office in Auburn Hills, Michigan and that the following items would be discussed:
- Product failure rates;
- Current business environment and strategic action to be taken; and
- Business due diligence review.
 By letter dated August 12, 2014 (R-5.1), Boudreault advised Morrison and Zoulek that he could not attend the meeting on August 18th as he had an important medical appointment. Moreover, he was expected to be deposed in the Jeld-Wen lawsuit on August 19th.
 By Notice dated August 13th (R-5), the special meeting was postponed to August 22nd, 2014 in Dorval at 10:00 a.m. The agenda remained identical and no documents were attached to the Notice. It will be Boudreault’s first and last meeting of the Board in the presence of the other two directors. He had no idea that his two colleagues would propose that Cover file a voluntary assignment in bankruptcy.
 On August 22nd, Boudreault left his home in Baie-St-Paul at 6:00 a.m. to attend the meeting in Dorval at 10:00 a.m. without checking his emails. Boudreault did not know of the existence of the MNP Report dated August 21, 2014 (R-6). He did not know that Morrison had emailed a report concluding to Cover’s insolvency to him at 8:53 p.m. on that evening. At that time, Boudreault was asleep in bed and at the hearing Morrison admitted that he knew that Boudreault was in bed at the time that he sent the email. Thus, Boudreault never had a chance to carefully read it before the fateful meeting.
 At the meeting, Morrison and Zoulek are accompanied by Pastore, who had been involved in Guardian’s due diligence process. Pastore had emailed the due diligence executive summaries to Boudreault on August 13th. Terrence accompanied his father.
 Morrison changed the order of the agenda and decided to start with the third item “Business Due Diligence Review”. Boudreault wanted to get more information on this point as he only got the email (D-13) with a few attachments and details on August 13, 2014. The exchange was relatively short as Pastore responded that the results of the process constituted privileged information that could not be divulged to him. Pastore reassured Boudreault that they did not find anything about him or on him. Pastore’s reassurances are surprising for someone coming as a Guardian official who is attending a special meeting, knowing full well that his two colleagues are going to put Cover in bankruptcy in a few minutes. Pastore’s refusal to provide more information to Boudreault on their findings regarding the 2011 Production is even more troubling as it is that precise subject that is at the heart of the MNP Report that will serve to justify the adoption of the Assignment in Bankruptcy Resolution to be tabled a few minutes later. In other words, the subject is on the agenda but the findings of the due diligence process are privileged and confidential and cannot be communicated to Boudreault.
 On the second item “The current business environment” Boudreault acknowledges that the sales have been declining, due to fierce competition from the new comer on the Canadian market which sometimes sells to competitors below Cover’s cost; Terence pointed out that Cover was nevertheless regaining market share.
 Morrison then passed to the first item on the agenda “Product failure rates”, Morrison referred to the MNP Report that Boudreault has not seen before entering the meeting and had not read. Pastore got copies printed for all in attendance.
 Morrison reviewed the three scenarios contemplated by MNP in its report and expressed his agreement with MNP’s conclusion that Cover was insolvent due to the 2011 Production failure. Morrison moved that Cover file a voluntary assignment in bankruptcy, given its state of insolvency. Zoulek seconded the motion. Boudreault and his son Terence, in addition to being shocked by the unexpected turn of events, expressed their total disagreement. Cover was not insolvent: it had very few debts, unencumbered assets with significant value, a line of credit that was used to less than half its limit and all suppliers, including Guardian, were always paid in sufficient time for Cover to benefit from discounts. Moreover, Cover had always been able to deal with the defective products and to honour its warranty. Cover could continue to do so. There was no justification to close the company so abruptly and dismiss some 300 employees after 23 years of successful and profitable operations. The profitability may be temporarily reduced to deal with the 2011 Production, if and when claims are made, but profitability was nevertheless still there.
 Terrence requested that the resolution and the meeting be adjourned to give them time to carefully read the MNP Report and to obtain the reaction and comments from Cover’s auditors, Ernst & Young, but to no avail as Morrison and Zoulek refused their request, which was quite reasonable under such circumstances. According to Terence, Morrison even invited Boudreault to join them at the offices of PricewaterhouseCoopers to meet with the Trustee, Mr. Christian Bourque (“Bourque”) and sign the appropriate documentation for the assignment in bankruptcy.
 Boudreault refused and the meeting was adjourned abruptly.
 At no time during the August 22nd meeting was the question of Gestion’s $18M Option ever raised or mentioned.
 Then, what was the urgency of passing the Assignment in Bankruptcy Resolution on August 22nd, 2014?
 Absolutely no pressure was being exercised at the time by Cover’s creditors and suppliers on its finances.
 Based on the preponderant evidence, there is only one possible answer to that question, the Option that could be exercised by Gestion and Boudreault in ten days. Yet, Boudreault was offered and had agreed to stay with Cover until the end of 2016 and to postpone by as much the three-month window to exercise the Option. Boudreault had agreed to sell to Guardian Canada for some $10M 14% of his stake in Cover. Who could possibly think of bankruptcy under such circumstances?
 The Court is convinced that when he walked into the special meeting of the Board on that fateful August 22nd, 2014, the bankruptcy of Cover was not on “his radar”.
 Yet, in cross-examination, the first questions put to Boudreault by Guardian’s lawyer dealt with his apparent sole objective for contesting the bankruptcy of Cover, namely salvaging the Option. Boudreault disagreed firmly. His priority was always to maintain in operation the company that he founded for the benefit of its shareholders, of course, but as well its workforce and its clients, who benefit from an after-sale service and long-term warranties.
 In any event, as previously mentioned, on the Monday following the August 22, 2014 special meeting of the Board, PricewaterhouseCoopers filed Cover’s assignment in bankruptcy while Boudreault was obtaining a first temporary stay order that led to the August 28, 2014 Stay Order that is presently in force until judgment is rendered on the present Motion to Annul Cover’s bankruptcy.
 The Tribunal is called upon:
- to determine whether Cover was an “insolvent person” within the provisions of the BIA when it filed an assignment in bankruptcy on August 25, 2014; and
- whether Guardian and Guardian Canada unlawfully misused or abused the provisions and the spirit of the BIA in order to terminate abusively the 2010 Shareholders’ Agreement (R-3) and thus avoid certain financial obligations towards Gestion stemming from the same.
 The Court believes that it should first answer the second question as the convincing and compelling preponderant evidence leads the Court to conclude that the Respondents have seriously, if not grossly, abused the bankruptcy process in order to achieve their real and only goal to extricate Guardian from its personal and direct liability of $18M to Gestion under the 2010 Shareholders’ Agreement. That financial obligation would automatically disappear with the termination of the 2101 Shareholders’ Agreement occurring upon the bankruptcy of Cover as the Option and the Guardian Guarantee would immediately become void and unenforceable.
 Temporarily setting aside the issue of the $18M Option, the preponderant evidence also leads the Court to conclude that on August 22 and 25, 2014, Cover was solvent and able to honour its financial obligations as they became due.
 The only way to “conveniently” render Cover insolvent for the purpose of putting it in bankruptcy was to create a sudden and “catastrophic situation”, in virtue of which each and every of the 679 392 IGUs manufactured in 2011 was deemed by Guardian to be defective without exception, placing Cover in a situation that if it had to replace them all on August 25th, 2014, the financial obligation stemming from it was rendering Cover insolvent.
 In the elaboration of their scheme, Guardian and Guardian Canada obtained self-serving expert evidence in their attempt to establish that on August 25, 2014, Cover was an “insolvent person” based on the 100% replacement catastrophic scenario.
 It is important to always bear in mind the principles underlying the BIA “to assist honest but unfortunate debtors and to allow realization and equitable distribution of the assets of the bankrupt for the benefit of the creditors”.
 The scheme concocted by Guardian and Guardian Canada with their catastrophic scenario does not justify that Cover be maintained in a state of bankruptcy as the goals sought by the Respondents clearly do not adhere to these principles.
 Given the main questions at issue to be determined, the Court will first examine the conduct of Guardian and Guardian Canada as they were preparing to avail themselves of the remedies offered by the BIA to provoke the bankruptcy of Cover.
- Guardian’s preparatory works to the special meeting of the directors of August 22, 2014
 On August 22, 2014, upon entering the room where the Assignment in Bankruptcy Resolution would be voted by Morrison and Zoulek, Boudreault and Terence were unaware of various facts which came to light during the hearing.
 Bourque, of PricewaterhouseCoopers, testified that he was first approached by La Roche, one of the lawyers of the Guardian Group, at the beginning of August 2014. The proposed mandate was to assess and quantify the damages linked to Cover’s 2011 Production. Bourque declined the mandate as PricewaterhouseCoopers were the auditors of Guardian.
 On or about Monday August 18, 2014, La Roche approached Bourque once again and asked if he would accept to act as trustee to the bankruptcy of Cover. This time, Bourque did not see any conflict of interest as “a shareholders’ conflict” involving Guardian and Gestion was of no concern to PricewaterhouseCoopers acting as eventual trustee to the bankruptcy of Cover. Also, the fact that PricewaterhouseCoopers were the auditors of Guardian did not constitute an impediment. Bourque testified that on the contrary, their relationship with Guardian helped to make the decision to act as Trustee.
 To proceed with the bankruptcy filing, Bourque needed a resolution passed by the Board of Cover. Bourque knew that the resolution would be available at some point during the day on Friday August 22, 2014, as a special meeting of the Board of Cover had already been called for that morning. Bourque scheduled a 3:00 p.m. appointment with Morrison after the Board meeting. Bourque was also asked to prepare the necessary documentation for the filing. All required information was to be provided to him by Guardian and its lawyers. Bourque said that he understood that he could not contact anyone at Cover to get the information that he needed to prepare the Statement of affairs, like a detailed list of Cover’s assets, liabilities and creditors as it is normally done. Guardian supplied a list of Cover’s customers but without their addresses. Bourque had his employees find their addresses on the Internet for some three hours. Obviously, Cover had such information. Surprisingly, Bourque testified later that he was not aware that this exercise was all being done by Guardian in secret and outside the knowledge of Cover and of Boudreault.
 As to the MNP Report, contrary to Boudreault who only got it at 8:53 p.m., Guardian provided a copy of the report to Bourque early in the afternoon of August 21st through their lawyer La Roche.
 At 3:00 p.m. on August 22nd, Morrison and Zoulek or Pastore attended Bourque’s offices with the resolution. Morrison signed the Statement of affairs (R-10). The resolution appeared to Bourque to be in order, although it did not reflect that one of the three directors had voted against it. Bourque must have been aware of Boudreault’s dissidence as he asked La Roche if there was a Shareholders’ Agreement and in the affirmative, if any of its provisions prevented the filing of a voluntary assignment. La Roche told him that there were no such restrictions; in the Court’s opinion, that is a statement that is inaccurate. Bourque never saw the 2010 Shareholders’ Agreement.
 When Morrison left the offices of PricewaterhouseCoopers with his colleague, it was too late for Bourque to file the assignment documents on that day. He was asked by Morrison to hold the documents in escrow until the following Monday at which time he would receive instructions from Guardian to file the assignment.
 At 7:09 a.m. on Monday August 25th, 2014, Bourque replied to an email (R-49) received at 6:57 a.m. from Mr. Kyle Krywko (“Krywko”), Guardian’s in-house lawyer, in all likelihood instructing him to file the assignment immediately. Bourque responded as follows:
“8:30, but add at least an hour (9:30) to get the certificate of bankruptcy from the official receiver (Industry Canada).
Also we have to consider that taking possession during production hours will be very disruptive. I would prefer to wait and file in the afternoon in order to take possession by the end of the day shift, say around 6pm.”
 Bourque’s response was unacceptable to Guardian as at 8:19 a.m., Pastore sent an email asking him:
This will confirm that we want to file asap this morning. Kyle just left you a message on your office line but that is the reason for the call. We have advised Phil.
 Morrison and Pastore are in copy on these emails. Bourque got the legal documentation filed around 10:00 a.m., as instructed to do.
 Over the years, Morrison had been involved extensively with Cover and knew Boudreault. In fact, the witness stated that he considered James Boudreault as a friend. Morrison claimed that he was very familiar with Cover’s operations and needs as he had received and reviewed Cover’s in-house financial statements submitted to Guardian on a monthly basis from 1995 to 2011, at which time he was assigned to another position.
 Boudreault ran the business and Morrison provided the tools needed to make Cover a successful business. They were “two good friends”.
 Morrison was asked by his superiors to get involved again with Cover in 2013 as “Guardian was not getting all the information it needed”. Guardian was concerned with the spikes in returned IGUs. His testimony was corroborated by Terence’s, who mentioned that Guardian was aware of the abnormal rate of returns of the 2011 Production since at the very least in June 2013, as evidenced by an email in which Guardian was asking for additional details on this specific question (D-5).
 The evidence also revealed that the unusual situation was preoccupying Cover’s management since 2011, but they had already identified the problem and found a replacement sealant that was performing much better for the productions commencing in 2012. They had totally phased out the Bostik 5192 sealant production in 2012 and Cover was actively replacing the IGUs of the 2011 Production that failed prematurely. Based on the testimony of Gestion’s witnesses, the Court understands that they never tried to conceal the problem from Guardian.
 There is not a shred of evidence that the financial information given to Guardian on a monthly basis was ever false, incomplete or misleading in any manner whatsoever. The evidence shows that Cover was proceeding to replacements of the 2011 Production at a higher than usual rate since 2012. Such information was converted into the in-house financials that Guardian received monthly throughout the years.
 Boudreault and his colleagues were genuinely convinced that not all the IGUs from the 2011 Production would fail. In their view, such an occurrence was impossible; not all IGUs were assembled into windows in the same manner. For example, window glazing involves the application by the window manufacturer of another sealant while integrating Cover’s IGU into its window frame. Under such circumstances, the risks of a leak occurring were minimal. Not all windows are exposed to the same type of weather elements. Also, the orientation of the window (East, West, North or South) will have an impact on its longevity.
 “We will have massive failures and are looking at a $42 million exposure for the 2011 Production”, testified Morrison. Terence disagreed entirely with such a catastrophic and unrealistic approach.
 Cover’s management believed that the 2011 IGUs that are actually defective would fail rather quickly, hence a higher rate of return in the first years but that the ones that did not fail would very likely last much longer. That is why Terence and his colleagues told their colleagues at Guardian that they anticipated the “spike” of returns to peak and tapper in the near future. Were they acting in bad faith and intentionally misinforming Guardian? The Court does not believe so.
 In retrospect, one can conclude that Cover’s managers made a mistake when they chose the Inex and the Bostik 9152 sealant combination. But, contrary to Guardian’s unfounded allegations, their decision was not reckless and unreasonable given the HB Fuller tests results of 2010. If they made a mistake, the preponderant evidence does not reveal any sign of bad faith and ill will on their part.
 But the Court sees in the present situation, that Cover’s management made an honest mistake in the selection of the Bostik 9152 sealant that unfortunately caused the 2011 Production to fail to a greater degree compared to the others. In business, there are good years and sometimes bad ones.
 Again, that business decision had been made on four of the six IGU samples fabricated with the Bostik 9152 sealant successfully passing HB Fuller’s 22-week P1 Chamber test in 2010 and on a fifth IGU managing to successfully last during 15 weeks before failing.
 In fact, no one knows to this day how many IGUs of the 2011 Production will really cease to perform what they have been designed to do.
 Morrison stated during his testimony that if a single sample of IGU failed a P1 Chamber test, it meant that all IGUs made with the same combination would fail. The Court does not believe that the preponderant evidence supports Morrison’s view that all IGUs of the 2011 Production will fail.
 Moreover, Morrison’s statement is contradicted by his own decisions made in 2010.
 The Court believes that such a statement (one test failure means 100% failure rate) was meant to “neutralize” certain undeniable facts that were coming to haunt the witness.
 The same HB Fuller tests, made in 2010 with the Bostik 9152 sealant that are presently used by Guardian to justify its “catastrophic discovery” position, were described as successful tests and were used by Morrison and his senior analyst Wong in 2010 to approve the acquisition and the use of the Erdman machines by Cover. The HB Fuller P1 Chamber tests were deemed to be successful by Morrison in 2010, despite the fact that some IGU samples, a minority, had failed in those tests.
 Insofar as to the 2011 Production is concerned, it is impossible to say or predict with any certainty the exact amount of failure and the time when the failure will occur, if it occurs. The failure rate will definitely be higher than usual because of the incompatible combination of the Inex spacer with the Bostik 9152 sealant.
 But, in the Court’s opinion based on the preponderant evidence, it is preposterous to even suggest at this time that the entire 2011 Production has to be replaced, given that the HB Fuller tests that were made in 2010 yielded negative results. The results were in fact mostly positive and reported by Morrison and his senior analyst to Guardian as being successful in August 2010 (R-18) in order to justify the expenditure of $1.8M in Erdman machines and allow Cover to begin manufacturing with them. Not a single of the tests submitted by Cover to Morrison in August 2010 was entirely successful (100%). If as the witness now claims that one failure of a sample in a P1 Chamber test means that 100% of that production will certainly fail, why did Morrison recommend to Guardian the acquisition of expensive manufacturing equipment based on the same test results that he qualified at the time as successful tests?
 The Court does not believe Morrison’s version of the facts.
 Morrison’s testimony also revealed that Guardian was deeply concerned and was firmly against Cover contributing financially in any manner to the labour costs incurred by their customers to replace the defective 2011 IGUs. Boudreault saw it as a gesture of goodwill on the part of Cover; Guardian saw it as an unnecessary waste of their profits.
 Couldn’t Guardian try to discuss openly its financial concerns with their long-term partner Boudreault before deciding unilaterally to close permanently this otherwise successful business?
 Morrison confirmed that he was asked in early August 2014, to join Cover’s Board of directors because he had the longest history with Cover and his friend Boudreault. Morrison claimed that at the time, Guardian was convinced that Boudreault was concealing information about the 2011 Production, an unproven fact bearing in mind that before the bankruptcy the lack of certification of the 2011 Production was not an issue. In any event, an IGU assembled with the Bostik 9152 sealant that becomes defective will not become more defective or less defective if it was certified. One must remember that four out of the six IGUs assembled with the same “bad mix” were tested favourably by HB Fuller in 2010 for at least 22 weeks. These samples were not certified. Moreover, Cover has built on years other that in 2011, IGUs that also failed from time to time (yet at a lesser rate) even though these IGUs had been certified.
 The certification issue is simply a “red herring”.
 Morrison added that prior to the special meeting of the Board, he communicated to Boudreault Guardian’s concerns about the failure rates and that there was no slowdown in the returns. “We needed to address these issues at the upcoming meeting”. Morrison admitted that he never raised the subject of bankruptcy with Boudreault “as the plan was to continue gathering data to explain the return rates.”
 According to Morrison, all preparations relating to the bankruptcy were handled and coordinated by Krywko, Guardian’s in-house counsel, who told him that Cover was in trouble. Morrison had several discussions with Krywko in July and August 2014. He told Morrison that Cover had no problems with its own creditors but there was an issue with Cover’s customers and their customers’ customers. The fact that Cover had to replace a higher than normal number of IGUs with respect to the 2011 Production and even contributed to the labour costs was unacceptable. “We have never paid for the labour in the past”. They (Guardian and Guardian Canada) were “facing a financial penalty”. “We have a large financial exposure stemming from the 2011 Production.” [Emphasis added]
 About the MNP Report, Morrison testified that he only received it around 8:00 p.m. on the evening of August 21st and that he forwarded it to Boudreault at 8:53 p.m.
 Morrison acknowledged that Boudreault had not read the MNP Report before the meeting. The latter did not even have a copy of the report when he arrived at the special meeting. After Pastore got copies for all, Morrison went through the three scenarios (100%, 75% and 50% replacement scenarios) and declared himself in agreement with MNP’s conclusion that Cover was insolvent. He proposed the Assignment in Bankruptcy Resolution with Zoulek’s approval.
 Boudreault and Terrence, in shock, wanted a postponement of the meeting and get a second opinion from Ernst & Young before adopting such a fatal and drastic resolution. Morrison replied: “I have this report [MNP]. There is no need for an additional report.”
 Morrison could not wait a few more days as requested by Boudreault because they were looking at $42M of “bad units”.
 The Court noted that Morrison mentioned on several occasions that there was a major concern within Guardian that they were not getting all the relevant data concerning the 2011 Production.
 If that was the case, why automatically conclude to the worst possible scenario with a 100% replacement? At that time, after three years since the 2011 Production, only 7.33% of the latter had been returned. Although a higher rate than normal, it could not justify a 100% failure rate as easily as it did.
 According to Morrison, Guardian had lost confidence in Cover’s management and they were not getting any information from Boudreault to dissuade them from resorting to the bankruptcy process.
 If that was the case, why did Guardian act so precipitously if it did not have all the relevant information? Why not give Boudreault a chance to dissuade Guardian from resorting to the bankruptcy of Cover?
 It is somewhat difficult for someone to dissuade another when that person ignores what the object of the dissuasion is. Shouldn’t Boudreault have been informed earlier that the bankruptcy was envisaged by his co-shareholder in order allow him to dissuade the latter from going forward?
 Under such circumstances and in the absence of all relevant information, how could Guardian consider the MNP Report and its conclusions as reliable?
 In any event, Morrison insisted that the 100% failure rate of the 2011 Production was a reasonable conclusion for Guardian. Again, one IGU sample failing a P1 Chamber test means that all IGUs would fail.
 What did Guardian had to lose in having an open, forthright and honest discussion with their long term partner who had managed a company (Cover) that generated some $81M in dividends to its shareholders ($61M for the Guardian Group)?
 Morrison gave the answer: “The financial erosion of the company was continuing” and “after September 1st, James Boudreault could initiate the Put Option”.
 During his cross-examination, Morrison tried unconvincingly to minimise his personal involvement in the process leading to the bankruptcy of Cover.
 In that vein, he only became aware of Krywko’s involvement sometime in August, at an unknown date. Yet, he previously testified of having spoken to Krywko in July as well about Cover.
 Morrison did not know when the “outside” lawyers were hired by Krywko.
 Moreover, when Morrison agreed to postpone the special meeting of the directors to August 22nd at Boudreault’s request, he claimed the he still had no knowledge of the involvement of the outside counsels in Montreal and of the mandate given to MNP on August 12, 2014. He was only made aware of the mandate given to MNP “within a week” before the August 22nd meeting and he did not even know when their report would be available.
 It would explain why he only received it at 8:00 p.m. in the evening of August 21st. The Court does not believe that the witness did not even know if the MNP Report would be available for the August 22nd, 2014 special meeting of the Board.
 Morrison also claimed that he was relying on Krywko, Guardian’s in-house counsel that he described as “a good attorney who is preparing the bankruptcy even if no decision was made”. On that specific subject, Morrison mentioned repeatedly that the decision to proceed with the bankruptcy had not been taken.
 When was the decision taken then?
 Morrison seemed to imply that upon receiving the “unexpected” MNP Report around 8:00 p.m., Guardian’s decision to put Cover in bankruptcy had still not been taken and that they were still trying to get more information from Boudreault at the special meeting to be held on the following day.
 The witness’ story just does not make sense. His version of the facts is simply not credible, given the facts introduced into evidence.
 Morrison had to be aware of the decision to put Cover in bankruptcy much before August 21st. It is highly unlikely that Morrison did not know earlier in the week that he had an appointment at the Trustee’s offices at 3:00 p.m. after the special meeting of the directors. Obviously, such an appointment only made sense if the Assignment in Bankruptcy Resolution was passed earlier in the day, at that the special meeting of the Board.
 The Court believes that Morrison was one of the key Guardian employees who orchestrated the bankruptcy of Cover and implemented Guardian’s decision.
 Morrison added that “I did not call James Boudreault about the impending bankruptcy. I know that James goes to bed early. James Boudreault did not know about the bankruptcy.”
 Upon reading the so-called “unexpected” MNP Report around 8:00 p.m., how could Morrison not realize that the bankruptcy was imminent if it really had not been decided until then? The special meeting of the Board was schedule to begin in some 12 to14 hours. Wouldn’t someone, being apprised of such “unexpected” and important if not crucial information about the future of Cover, not try to wake up a “good friend” in order to advise him to read the MNP Report as it would be tabled and discussed at the special meeting? Morrison knew that Boudreault was asleep in bed when he chose to send the MNP Report to him by email. In all likelihood, Morrison forwarded the email at a time at which he knew that his “good friend” would not probably see it before the special meeting of the Board. In all appearances, Morrison was implementing Guardian’s strategy, keep Boudreault and his son Terence “in the dark” as much as possible.
 Morrison’s testimony also contradicted his own statement in the affidavit that he signed in support of Guardian’s contestation of the present Motion, where he affirmed under oath:
“174. As will be demonstrated hereinafter, in view of this alarming discovery, Guardian Canada requested that its counsel retain the services of MNP to prepare a report (R-6) in order to determine the impact of the future returns and allowances of the 2011 IGUs on Cover's financial situation;”
 How could Morrison make such a statement under oath if he was only made aware of the hiring of outside counsels in Montreal and of the mandate having been given to MNP within a week before the August 22nd meeting? He was not aware of such facts as they occurred.
 Morrison also specified that the bankruptcy decision was not taken because “of the $18 million Put [Option]”. But, he concluded his cross-examination by saying that they wanted to put the company in bankruptcy as soon as possible to “protect the employees and the creditors…and to avoid the additional $18 million debt for James Boudreault”.
 In any event, resorting to the bankruptcy of Cover not only ensured Guardian to be relieved from its financial obligations under the Guardian Guarantee but it also ensured that no one in the future would ever know whether the fictitious “catastrophic” $42M scenario was realistic. More importantly, not a single customer of Cover could ever rely and benefit from Cover’s warranty in the future.
 For Guardian, “the financial erosion” would be contained with Cover’s bankruptcy. The Court understands that we are talking here of the “financial erosion’ of Guardian caused not by Cover, but because of Cover and the Option.
 With all due respect, Morrison’s testimony was filled with many hesitations, contradictions and inconstancies that seriously affected his credibility in the eyes of the Court.
 Moreover, based on the preponderant evidence adduced at trial, the Court has serious reservations about several of the affirmations made by Morrison in his 210 paragraphs affidavit signed on September 18, 2014 in support of Guardian’s contestation.
 Morrison’s story in the affidavit reads well but several of his statements were not supported by the evidence and sometimes by his own testimony.
 The Court does not believe Morrison’s minimal involvement in the bankruptcy of Cover nor that he was only made aware of the mandate given to MNP a few days before the August 22nd meeting and that he only received the MNP Report at 8:00 p.m. on the evening of August 21st which means that, in all probability, his aforementioned statement in the affidavit was true. Then why did he offer a different version during his testimony?
 The Court does not believe that when Morrison as an experienced executive accepted to serve as director of Cover on August 6th, 2014, he was not aware of Guardian’s plan to put Cover in bankruptcy. At that time, Guardian already had “Montreal lawyers” and PricewaterhouseCoopers had already been approached at the beginning of August 2014 to produce a report that would justify putting Cover in bankruptcy.
 Morrison, as an experienced executive who had already served as director on boards, must have been aware of a director’s fiduciary duty towards the company on which board he agrees to sit.
 The Court does not believe for an instant that Morrison, an experienced executive and director, accepted to preside a special meeting of the Board and propose the Assignment in Bankruptcy Resolution not knowing as late as on the eve of the meeting that the MNP Report would be available and that Guardian had not yet decided on the bankruptcy of Cover.
 Under such unusual circumstances, how could Morrison, as director of Cover, mentioning repeatedly that Guardian did not have all the relevant data on the 2011 Production, flatly refuse Boudreault’s understandable and legitimate request for additional time to take cognizance of the MNP Report that he had not yet read and get a second opinion from Cover’s auditors, Ernst & Young, given the gravity of the conclusions of the MNP Report?
 When Morrison accepted to serve as director of Cover, he had the duty to protect the interest of Cover if it came in conflict with the interest of the majority shareholder. The Court does not believe that as director of Cover, Morrison acted in good faith in the performance of his duties.
 Finally, when cross-examined on his involvement regarding the $10M transaction in December 2013, Morrison was hesitant and unconvincing on the reasons why the transaction did not proceed as planned.
 Morrison was directly involved in the discussions surrounding that transaction that he personally initiated in the spring 2013.
 At all relevant times, Guardian was receiving Cover’s in-house financial statements on a monthly basis since 1995. They necessarily included financial information about the IGUs replacement program. Yet, Guardian would have only noted a “spike” in the IGUs return-rate in June 2013. Be that as it may, this information caused concern internally at Guardian and Morrison was asked to increase his involvement with Cover in that respect in mid-2013.
 Considering that in 2013 Guardian was preoccupied with the 2011 Production failure rates and entertained serious doubts about being fully apprised of the situation by Cover and Boudreault, it is quite surprising that on October 31st, 2013, Guardian prepared an internal outline of its proposed transaction with Boudreault (R-20) and that it was still seriously contemplating going ahead with an additional two-year extension of the Option and acquiring an additional 14% equity in Cover by buying some of Gestion’s shares for more than $10M. In December 2013, despite that the same concerns were still growing, Guardian nevertheless submitted contracts to Boudreault for the closing aimed to take place before the end of that year. Guardian also sought Boudreault’s approval for the eventual merger between Cover and Guardian Canada.
 Then, in 2014 everything changed suddenly with the due diligence process initiated in the spring of 2014 at the request of the Board of directors of Guardian.
 In August 2014, the financial situation was not significantly different than in December 2013 when the $4M dividend was declared at Guardian’s insistence except that the return rate on the 2011 Production had reached 7.33% after some three years. According to the due diligence report sent on August 13th, 2014 by Pastore to Boudreault (D-13), Cover should have allocated a reserve of some $5M for the 2011 Production. In less than 10 days later, Boudreault will be told that Cover has a $42M problem…
 Guardian’s complete turnabout in 2014 is totally inconsistent with its behaviour in 2013. Guardian already had on hand the relevant information and as a world leading corporation in glass production, it already knew of the financial consequences of producing a “bad batch”. The company and its shareholders will sustain a “financial penalty”.
 The only logical and highly probable explanation for such an abrupt change is the transfer of the ownership of Guardian that occurred at the end of 2013 or at the beginning of 2014. The “good years” when Cover was able to generate generous dividends were over. The competition was stronger. In all probabilities, the new owners were now looking at incurring “financial penalties” with Cover’s 2011 Production in addition to having to pay $18M to Gestion in order to acquire full ownership. The past performances no longer counted for the new owners. Guardian wanted out and the bankruptcy of Cover was the answer to terminate the 2010 Shareholders’ Agreement and save Guardian from paying the $18M to Gestion.
 In light of the preponderant evidence, the Court is of the opinion that under the circumstances prevailing in August 2014, Guardian would have had no interest in provoking the voluntary assignment of Cover in the absence of the Guardian Guarantee in the 2010 Shareholders’ Agreement. The offer that Morrison wanted to present to Boudreault on the weekend of August 23, 2014 is quite revealing and eloquent.
 Morrison testified that after the August 22nd, 2014 special meeting of the Board and attending at the Trustee’s office, he tried unsuccessfully to call Boudreault over the weekend. The conversation never took place, but Morrison stated that he had the mandate to present an offer to Boudreault on behalf of Guardian.
 According to Morrison, Guardian (and Guardian Canada) was ready to sell its entire interest in Cover for $1, provided that Guardian and Guardian Canada would get a full and final release from Cover and from Gestion and Boudreault as well from any and all obligations and liabilities, including the Option. Boudreault and Cover would have had to assume all liabilities of Cover to the complete exoneration of Guardian and Guardian Canada.
 In other words, under such a proposal, if Gestion and Boudreault renounced to exercising the Option and claiming the $18M purchase price from Guardian under the Guardian guarantee, Cover would be theirs exclusively and would remain “alive” (out of the bankruptcy). Cover could then pursue its operations to the complete exoneration of Guardian and Guardian Canada who would no longer be involved. The Court understands that under such a proposal, the Assignment in Bankruptcy Resolution would have never been used.
 Morrison was apparently not able to reach Boudreault and make the offer before the Trustee was instructed on Monday morning to file the bankruptcy documentation. The concept behind the offer nevertheless confirms where Guardian’s priorities and motivations were at the time.
 If Guardian had been more forthright with Boudreault and had acted honestly and in good faith, as all are expected to do so under the Civil Code of Quebec, instead of acting hastily and in a scheming manner with the trumped-up conviction that it did not have all the relevant data from Cover and instead had openly communicated its true intentions to Boudreault about its “bankruptcy solution”, Cover, in all likelihood, would not have found itself in such dire and unnecessary predicament.
 With the benefit of the evidence and having heard the parties’ testimony, the Court is convinced of Boudreault’s good faith in this unfortunate affair and that he would not have jeopardized the future of Cover, the company that he had founded some 23 years before and which had been extremely profitable for its shareholders during those years under his direction. The Court does not believe that Boudreault would have blindly plunged Cover into dire financial straits for the Option. His involvement in the interim financing episode and his testimony at the hearing at the time speak volume.
 Regardless of Cover’s financial situation at the time of the exercise of the Option, Guardian was directly and personally liable as principal debtor for the payment of the agreed upon purchase price in the 2010 Shareholders’ Agreement.
 The existence of the Guardian Guarantee can be easily explained as the exercise of the Option be it by Gestion or Guardian itself had one undeniable purpose. Guardian through its wholly-owned subsidiary, Guardian Canada, would become the sole owner of Cover.
 Guardian knew that fact and the reality surrounding its own financial responsibilities very well. The in-house October 31, 2013 internal outline (R-20) leaves no doubt about it. Guardian knew since 2010 about Cover’s commitment to redeem Gestion’s shares for the $18M minimum purchase price. Yet, it kept on withdrawing important dividends year after year that, in all certainty, prevented Cover from ever being able to honour its commitment under the Option. Just between 2010 and 2013, Guardian received $15M in dividends through Guardian Canada. Guardian knew that it had guaranteed to Gestion the obligations of Cover under the 2010 Shareholders’ Agreement as principal debtor and not merely a surety. Guardian knew that all times that, in any event it was the only party who could and would have to pay the $18M purchase price to Gestion. The Guardian Group caused Cover to never be in a position to honour the Option. Only Guardian could pay and its new ownership was undoubtedly aware of it.
 The Court can only conclude that, based on the preponderant evidence and in all likelihood, Guardian (and its new ownership) “wanted out” while they were still “financially ahead” as:
- on one hand, they did not want to incur any further “financial penalties” that unfortunately came with the 2011 Production failure and Cover’s obligation to correct the situation; Guardian considered that Cover was not as profitable as before and Boudreault increased the “financial erosion” of Cover by being unnecessarily generous in his attempts to correct the situation and allowing Cover to absorb the labour costs related to the replacement of the 2011 Production defective IGUs; and
- on the other hand, acquiring complete ownership of Cover at a cost of $18M was no longer a financially attractive proposition under the present circumstances; Guardian no longer intended to exercise the Option after January 2014, but it certainly did not want Gestion to do so either.
 Guardian did not want to acquire or to be forced to acquire the full ownership of Cover and pay for it $18M to Gestion. The idea of postponing the exercise of the Option by two more years (as previously agreed with Boudreault) would have helped relieve the “pressure from the Option” but it came at an unattractive price. Guardian no longer wanted to pay $10M to Boudreault for an additional 14% stake in Cover.
 In order to achieve Guardian’s goal, Cover had to be plunged into bankruptcy before Boudreault (Gestion) could exercise the Option in order to terminate the 2010 Shareholders’ Agreement and void the Option and the Guardian Guarantee regardless of the collateral damages, regardless of the obvious dire consequences for Cover and its 300 employee workforce and more particularly for the thousands of customers who had purchased Cover products over the last 23 years and who still depend on Cover’s after-sale service and warranty program.
 As shareholder in a corporation, Guardian Canada’s liability was limited to the value of its shares in Cover. In principle, the correction of the “catastrophic” 100% replacement of the 2011 Production and the lawsuits, if successful, would have cost nothing more to Guardian and Guardian Canada. Moreover, Guardian and Guardian Canada had already received from Cover some $61M in dividends over the previous years, including $3M in December 2013.
 The idea to offer to sell Guardian Canada’s shares to Gestion for $1 revealed eloquently that the Guardian Group had no further financial interest in Cover on August 25, 2014 or since it decided to resort to the remedies of the BIA earlier in 2014. Boudreault could have pursued Cover’s operations and continued to handle the claims without further liability to the Guardian Group, if it wasn’t for the Option.
 The Court finds that the bankruptcy of Cover was provoked by the Guardian Group for only one purpose: automatically trigger the termination of the 2010 Shareholders’ Agreement and immediately void the Option and most importantly, the Guardian Guarantee.
 The provisions of the BIA and its spirit are not designed to resolve such shareholders’ disputes.
- Was Cover insolvent on August 25, 2014, within the meaning of the BIA?
 It is also the Court’s finding that on or before August 25, 2014, Cover was not an “insolvent person” within the meaning of Section 2 BIA for the following reasons.
 The expression “insolvent person” is defined at Section 2 BIA as follows:
“"insolvent person" means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and
(a) who is for any reason unable to meet his obligations as they generally become due, [“Test A”]
(b) who has ceased paying his current obligations in the ordinary course of business as they generally become due, [“Test B”] or
(c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due; [“Test C”] ”
 At the hearing, each side produced a report from an expert witness aiming at establishing on one hand that Cover did not meet any of the three tests and on the other, that it met each and every insolvency test.
 Must all tests be met in order to declare someone insolvent? Or is just one, either of them, sufficient?
 The answer to the foregoing question has been settled by the jurisprudence. These tests are not cumulative.
 However, the tests must be applied in light of the facts specific to each case, always bearing in mind the aforementioned principles underlying the BIA.
 Before examining those three tests, the Court will deal with the argument of Guardian’s lawyers that Cover’s own admission of insolvency evidenced by the Assignment in Bankruptcy Resolution passed by a majority of its Board of directors settles any doubt about Cover’s actual insolvency as at August 22, 2014. They believe that Cover’s own acknowledgement of insolvency made through the said resolution of its Board of directors cannot be ignored and must take precedence.
 With all due respect, the Court disagrees with that assertion and the Court cannot ignore either that Boudreault, the third member of the Board of directors, voiced his objection and voted against such a resolution proposed by his two co-directors, Morrison and Zoulek.
 The resolution passed on August 22, 2014 with a majority of directors, reads as follows:
"INSOLVENCY AND BANKRUPTCY:
After the review of the Company's financial position, the Board of Directors acknowledges that the Company is insolvent and that it is unable to meet its obligations as they become due.
UPON MOTION DULY MADE AND SECONDED, IT IS RESOLVED THAT:
The Company file an assignment and that PricewaterhouseCoopers LLP, Trustee in the City and District of Montreal, act as Trustee to the bankruptcy of the Company, and that Michael Morrison is authorized and directed, by and on behalf of the Company, to sign all documents and to do such further acts and things as Michael Morrison, in his sole discretion, may consider necessary or desirable to give effect to this resolution."
[the “Assignment in Bankruptcy Resolution”]
 The Court believes that even in the absence of any mention of Boudreault’s negative vote in the resolution itself by adopting the Assignment in Bankruptcy Resolution under the particular circumstances then prevailing, Morrison and Zoulek, the two members of the Board designated by Guardian Canada, who voted in its favour despite the objections of Boudreault, the director designated by Gestion, violated the provisions of Section 1.1 of the 2010 Shareholders’ Agreement as Gestion’s approval was necessary if not essential to proceed to the liquidation of Cover:
“1.1 A correct and complete copy of the articles and bylaws of the Company and Cover are attached as Exhibit 1.1. The Company will not, without the approval of Gestion Boudreault: (i) amend its articles or bylaws (other than ministerial or technical changes that do not affect any substantial rights of any shareholder); or (ii) sell assets which are responsible, in the aggregate, for 40 percent of the sales of the Company; or (iii) sell the shares of a subsidiary or a sub-subsidiary; or (iv) amalgamate or merge with another company; or (v) liquidate the Company.”
 It is necessary to point out that the present matter is a rather unusual, if not a unique one in that it is, to all intents and purposes, a form of an unfortunate “duel” between the two shareholders of Cover. One that owns 75% of its shares who wants its company to be declared bankrupt at all cost and the minority shareholder who want to “keep it alive” and operating.
 We are not facing a company that on August 22 and 25, 2014, was avoiding its creditors as it could not honour its financial obligations towards them as they were becoming due. The actual situation prevailing at the time was entirely the opposite. This does not mean that Cover was not called upon to face certain financial challenges in the months or years to come, but its very survival was not an issue for anyone, except for Guardian and its wholly owned subsidiary, Guardian Canada who in all likelihood, had a very different agenda for Cover.
 In fact, the preponderant evidence reveals that on August 22nd, 2014, Cover was in sound financial situation. It was profitable despite a reduced market share but it was improving, as Terence Boudreault testified. Cover met its liabilities has they were becoming due without any difficulty; Cover enjoyed significant available short-term credit from its banker, the Scotia Bank, with an important unused portion; all of Cover’s plants assessed at some $12M were free of any charge, mortgage, hypothec or encumbrances and Cover was providing after-sale service and honouring the warranty given to its clients by replacing defective products during the applicable warranty period.
 In December 2013, Guardian Canada demanded that a $5M dividend be declared and distributed. This is not a sign in itself of pending insolvency, unless Guardian Canada was already planning to position Cover for insolvency if one considers the amount of such a dividend in light of the $500,000 profits made by Cover in 2013. But the Court does not believe so because of the $10M transaction that was “still in the air” then.
 One must remember that the $5M dividend was reduced to $4M at the insistence of Boudreault who thought that it was seriously out of proportion with the $500,000 profits for 2013.
 Can Boudreault be blamed for bowing on that question? The answer is no.
 Gestion was about to see its stake in Cover reduced to 11% in a few days. Gestion was about to get $10M from Guardian Canada for part of its shares. This is not the sign of a majority shareholder who does not believe in Cover and who will provoke its bankruptcy soon after. The problems related to the 2011 Production were well known by all and Cover was actively honouring its warranty program. The idea that Guardian would renege on its agreements with Gestion and provoke the bankruptcy of Cover eight months later was not in Boudreault’s mind for certain; had Boudreault known Guardian’s real plans, the Court is convinced that he would have never allowed Guardian to remove so much equity from Cover to the detriment of the company, its workforce and its creditors and customers. The Court is certain that at the time, Boudreault never entertained the idea that Guardian was not acting in good faith.
 Moreover, no one can pretend that with a reduced stake in Cover at 11%, Boudreault did not care anymore. The latter had accepted to push the exercise of his Option to the end of 2016 and to remain at the helm of Cover for two more years. We must bear in mind that this whole idea came from Guardian and Morrison in the spring of 2013, not from Boudreault.
 If indeed, Boudreault was aware of crucial and catastrophic information about the 2011 Production and purposely kept it secret from Guardian, wouldn’t it have made far more sense for Boudreault “to get out of Cover as soon as possible” and refuse to postpone by two more years the exercise of his Option, hoping that Guardian would only discover the so-called “truth” after his exercising the Option in September 2014?
 Cover is also involved in two lawsuits for product liability, namely the Bocenor and the Jeld-Wen lawsuits that it contested in good faith in the case of Bocenor and is still contesting in the same manner with respect to Jeld-Wen, in light of the evidence offered by its outside counsel in a “huis-clos” hearing. If and when the plaintiffs eventually succeed and are awarded an indemnity against Cover, it is not anticipated that, under normal circumstances, the financial obligations of Cover would threaten the very survival of the company.
 Finally, on August 25, 2014, there was not a single creditor that was applying any form of pressure on Cover to cause its bankruptcy due to its failure or its default to honour its obligations has they became due.
 With such a factual backdrop, the lawyers for Guardian and Guardian Canada argued that the expression “liquidate”, found in Section 1.1 of the 2010 Shareholders’ Agreement, did not mean or include the notion of filing of a voluntary assignment in bankruptcy under the BIA.
 With all due respect, the Court disagrees.
 The right of veto granted to Gestion regarding an eventual liquidation of Cover was first introduced in the 2004 Shareholders’ Agreement. The Court does not know the reasons for such an addition. However, the expression used in the Agreement does not specify the method of “liquidation” contemplated by the parties. Obviously, the parties had to contemplate a liquidation to be decided by the Board of directors of Cover; otherwise Gestion’s right to object was pointless, if not meaningless. In order to determine whether the expression “liquidate” applies herein, one has to also take into consideration the circumstances surrounding the adoption of the Assignment in Bankruptcy Resolution.
 As previously mentioned, on August 22, 2014, there were no “outside forces” exerting any pressure on Cover due to its alleged state of insolvency. The decision to file an assignment in bankruptcy came exclusively from within the company or more, precisely from the majority shareholder, who had designated two of three directors sitting on Cover’s Board and who caused them to propose and adopt the Assignment in Bankruptcy Resolution for financial reasons that only mattered to that shareholder.
 There is no doubt in the Court’s mind that the Cover’s assignment in bankruptcy constitutes a voluntary assignment decided by a majority of its directors with the strong objection of Boudreault, designated by Gestion. The very purpose of an assignment in bankruptcy of a corporation is to ensure its orderly “liquidation” and the orderly “liquidation” of its assets in compliance with the rules set out in the BIA. [Emphasis added]
 The vehicle adopted and used by the majority of Cover’s directors was a voluntary liquidation of the company under the BIA. It therefore constituted a voluntary liquidation of Cover, within the meaning of Section 1.1 of the 2010 Shareholders’ Agreement and by disregarding Boudreault’s objection to proceed to the liquidation of Cover under the BIA, the other two directors (as well as Guardian Canada) violated the terms and conditions of the said Agreement. [Emphasis added]
 Based on the rights granted to Gestion under Section 1.1 of the 2010 Shareholders’ Agreement, the Board of directors could not validly adopt the Assignment in Bankruptcy Resolution without Gestion’s approval that had to be expressed through Boudreault.
 Notwithstanding the foregoing, the Tribunal does not believe that on August 22 and 25, 2014, Cover met any of the three insolvency tests as they should be applied.
 The MNP Report concluded otherwise. With its three scenarios, Cover met all three insolvency tests. But, all due respect, The Court strongly disagrees with MNP’s conclusions that result from unproven and unrealistic scenarios dictated by Guardian.
- The MNP Report dated August 21, 2014 (R-6)
 The decision to adopt the Assignment in Bankruptcy Resolution made by Guardian via its two designated directors, Morrison and Zoulek, on August 22, 2014, was based on the findings and conclusions of the MNP Report dated August 21, 2014 (R-6) that had been ordered on August 12th, 2014 by La Roche, one of the Guardian Group’s lawyers in Montreal. The mandate was given for the following purpose:
“Guardian Industries Canada Corp. ("Guardian" or the "Client") has requested that we assess the impact of potential defect liabilities on the financial situation of Cover Industries Inc. ("Cover"), a subsidiary of Guardian, following defects. You have also asked us to prepare calculations ("Calculations") to determine whether Cover has the financial capacity to meet its obligations as they become due, taking into consideration those potential liabilities.
MNP is hereby providing a report of our findings, based on the available financial information received as of the date of this report. It is our understanding that this report will be provided to Cover's Directors to assist them in assessing the financial situation of Cover during their Board Meeting scheduled on Friday August 22, 2014.”
 The Court finds that MNP’s “catastrophic” 100% scenario was inspired if not dictated by Guardian that informed MNP of its concerns that the IGUs manufactured by Cover in the year 2011 exhibited a higher than normal rate of return for manufacturing defects and are likely to be replaced:
“However, since 2011, Cover started experiencing higher rates of returns for defective products. After investigating the issue and having a third-party expert review the defective units, it appears that the sealant used by Cover is incompatible with the PVC of the spacer.
The Units produced by Cover in 2011 appear to be experiencing the most failures. In 2011, Cover changed its product-mix to use a new sealant. In total 679,392 were produced in 2011. As of August 19, 2014, Cover has already replaced 49,803 Units which represents 7.33% of the total number of Units produced in 2011. Cover's warranty for this type of defect is up to 15 years.
Guardian is concerned that the entirety of the Units produced in 2011, combining the specific sealant and spacer, may be defective and will require a Unit replacement. Cover's product warranty covers this type of defects and therefore customers will be entitled to replacement Units. Hence, Guardian expects that the levels of product returns will increase exponentially in the short term.” (MNP Report page 2)
 The Court notes that the 100% replacement scenario was not only a finding or a conclusion reached by the author of the MNP Report, Mr. Denis Hamel (“Hamel”) of MNP, but the latter did not determine if such a conclusion was reasonable under the circumstances.
 The Court concludes that the 100% replacement scenario came from Guardian and MNP simply calculated the damages stemming from it and adding the 75% and 50% scenarios to give more credence to his conclusions, namely Cover was insolvent in August 2014 under all scenarios:
“We have calculated the potential liability using average variable costs based on net sales for the years 2011 to 2013 based on Cover's financial results and from internally prepared document. The potential liability calculated is then present-valued over the remaining warranty period.
The present value calculated represents the amount that Cover would need to invest right away to be able to assume the potential liability as it becomes payable (as per our claim scenarios in section 7.2.1).
This scenario is, in our view, likely to represent the reality that Cover will face if clients' claims start to increase exponentially. We used a discount rate of 2.5 % to convert future claims to a present value. The rate used is based on the Bank of Canada marketable bonds over 10 years on the date of this report.” (MNP Report page 5)
 MNP made calculations based on three assumptions namely that the rate of defective 2011 IGUs to be replaced would be 50%, 75% and 100% in all cases based on a 15 year warranty period, although some IGUs came with 5 year or 10 year warranties.
 Hamel added:
“We have calculated that the cost of replacing the remaining Units represents an amount between $21.27 and 42.55 million (Schedule 3) with a present value of between $19.33 million and $35.74 million as of July 31, 2014.
When we include the potential defect liability to the total liabilities, as per July 31, 2014 financial results, Cover found itself in a position where its total assets ($13.76 million) are not sufficient to cover its liabilities. This situation meets one of the criteria [based on the definition of “insolvent person” in the BIA] for Cover to be insolvent. (MNP Report page 9)
In all three scenarios, the Calculations show that, as of 2014, Cover will start incurring negative cash flow considering the defect liability.
Both the 100% and 75% scenarios (A and B above) have cumulative negative cash flows until 2026. Based on a 100% scenario, cumulative negative cash flow is $(11,414,052) in 2026 (Schedule 5). Based on a 75% scenario, Cover would not achieve a positive cash flow until 2024 at which point the cumulative negative cash flow is $(7,494,418) (Schedule 6). Based on a 50% scenario (C above), Cover would not achieve a positive cash flow until 2021 at which point the cumulative negative cash flow is $(4,260,991) (Schedule 7).” (MNP Report page 11)
 Hamel concluded his report as follows;
Based on the information obtained, the assumptions enumerated in this report and the work performed, we are of the view that:
a) Cover faces a potential defect liability of $42.55 million with a present value of between $19.33 million (50% of Units replaced) and $35.74 million (100% of Units replaced) as of July 31, 2014.
b) When we include the $42.55 million of potential defect liability to the total liabilities, as per July 31, 2014 financial results, Cover's will find itself in a position where its total assets ($13.76 million) are not sufficient to cover its liabilities. This situation meets one of the criteria for Cover to be insolvent.
c) Cover will start incurring negative cash flow after defective Units' defect liability costs as of 2014. Cover does not have the financial capacity to assume this potential defect liability, and as the claims for defective Units will arise, it will not be able to meet its obligations as they become due. This situation meets one of the other criteria for the company to be insolvent.
d) Cover will become insolvent if the shareholders do not inject new capital or obtain additional financing to cover the negative cash flow to be incurred.
e) The calculations performed do not take into account some facts that are not quantifiable at the time of this report. For example: the judgement against Cover for which the quantum of damages is unknown; the Motion to institute proceedings against Cover for which the amount claimed is approximately $4.6 million; and other potential lawsuits, such as a class action, since the defect is pervasive in the window Unit.” (MNP Report page 12)
 Hamel’s report is based essentially on the information provided by Guardian and its lawyers and Guardian’s expectation or concerns that the entire 2011 Production had to be replaced. Such an unsubstantiated expectation or such concerns do not automatically turn into reality. Hamel had to test the soundness of Guardian’s apprehensions made with one goal in mind, find a way to put Cover into bankruptcy.
 Hamel never had any discussions with anyone at Cover nor did he ever visit one of its facilities in order to verify if Guardian’s concerns were justified and realistic. He simply built his report on it.
 The exercise was, in all appearances, to use Guardian’s concerns convert them into the assumption that Cover was inevitably going to experience a 100% replacement scenario of its 2011 Production and quantify Cover’s damages as a result thereof to conclude that Cover was insolvent now, within the meaning of the BIA at the time.
 Hamel wrote his report knowing full well in all likelihood that the Board was to meet on August 22nd, 2014 and that his report released on the day before would serve to adopt the Assignment in Bankruptcy Resolution.
 In support of its Motion to Annul the Bankruptcy of Cover, Gestion retained the services of Mr. François Filion (“Filion”) of Accuracy Canada Inc. (“Accuracy”) to analyse and comment the MNP Report (R-6) and to express his opinion as an expert on the “insolvency” of Cover on August 22 and 25, 2014 (the “Accuracy Report”).
- Accuracy Canada Inc. - Report dated August 27, 2014 prepared at the request of Gestion’s lawyers
 After having analysed, inter alia, Cover’s historic financial statements, Filion concluded that the company had been profitable, despite the loss of a portion of its market share between 2010 and 2013 and, despite the claims related to the 2011 Production, it had nevertheless been able to generate so far a profit, albeit more modest.
 Comparing Cover’s 2014 results to the same period in 2013 revealed, setting aside the present bankruptcy context provoked by Guardian, that it was going to realize similar profits.
 Filion noted that as at July 31, 2014, Cover had no difficulty in collecting its accounts receivable and paying its accounts payable when they became due. Moreover, at the time, Cover was only using $1.76M of a $4.7M line of credit with the Scotia Bank.
 Cover had unencumbered immovable assets assessed at more than $12M.
 Filion concluded that in his opinion, Cover was not insolvent at the time and showed all the signs of being in healthy financial condition.
 In his opinion, MNP Report’s conclusions were purely theoretical and were based on the worst possible scenarios with the replacement of 100%, 75% or 50% of the 2011 Production.
 At a 100% replacement rate of the 2011 Production, IGUs that would have to be replaced as far as in 2026 (based on a 15-year warranty) would generate a replacement value of some $42M with an actual value of almost $36 million in 2014, hence Cover’s actual state of insolvency with assets of less than $14 million in August 2014.
 Hamel was proving that Cover was meeting Test C.
 Moreover, when using MNP’s original cash flows in the report that was used by the two directors designated by Guardian and Guardian Canada on August 22, 2014, Hamel showed that under the three scenarios, Cover’s cash flow from 2014 to 2026 would always negative throughout whether one would consider the worst scenario possible (100% replacement rate) or the other two at 75% and 50%.
 Hamel’s cash-flows were consistently negative from 2014 and thereafter. It showed that Cover was losing money from 2014 due to his 2011 Production replacement’s scenarios. With such figures, MNP concluded that Cover could not honour its obligations as they became due even in 2014.
 Therefore, Cover met the other two insolvency tests (A and B) of the BIA in August 2014.
 However, Filion noted the presence of significant errors in the three cash flows used by MNP in its report of August 21, 2014. The main error was that Hamel used “after tax” revenues to which he applied the “before tax” cost of replacement of the 2011 Production IGUs. As a matter of example, Filion identified that the replacement cost used by MNP in the MNP Report for the year 2014 was $869,146, omitting to deduct from such cost, tax savings of $233,800 yielding a net replacement cost of $635,346. Mr. Hamel of MNP acknowledged his omission that had an important impact on his entire cash flows covering 2014 to 2026 because of the 15-year warranty coming with the 2011 Production.
 With Filion’s correction, Cover’s three cash flows (keeping the same projected annual revenues used by Hamel in the MNP Report) revealed a totally different picture. The cash-flows went from all negative year after year beginning in 2014 to all positive from 2014 to 2020 in six years, under the worst case scenario (100%). But, with the 75% and the 50% replacement rate scenarios, Cover’s cash flow would remain positive from 2014 throughout until 2026.
 In other words, with the projected annual revenues used by MNP in its August 21, 2014 report, Cover could still manage to replace the 2011 Production at the unproven rates of 50% and even 75% and would only need the assistance from its shareholders commencing in 2020 with the 100% scenario, assuming that its revenues have not increased at all in 2020.
 Filion concluded his report by mentioning that in order to be considered insolvent at the time, the Court would have to consider that Cover:
- would not dispose of cash flow generated by its future operations;
- be confronted to claims from secured creditors, which is not the case here;
- had a negative cash flow (N.B. Filion agrees with annual revenues of $2.6M used by MNP in its August 21, 2014 report that would be sufficient, except for some years commencing on 2020 in a 100% replacement scenario);
- had no access to short term credit (Cover used at the time $1.76M out of a $4.7M line of credit which is still extended by Scotia Bank, despite its difficulties with Guardian);
- had no possibility to obtain long-term financing (at the time that Cover was assigned in bankruptcy, all of its immovable assets, with an estimated value of $12M, were free of any encumbrances and charges); and
- could not count on the financial support of its shareholders.
 On that latter subject, Filion noted that between 1997 and 2013, Cover declared and distributed some $83M in dividends with Guardian Canada’s share being in excess of $61M (over $43M since 2005).
 The Court noted that the Guardian Group received from Cover some $15M in dividends since 2010, when they had already agreed to an Option bearing an $18M minimum purchase price for Gestion’s shares. In 2010, the Guardian Group was aware of the Bocenor lawsuit that was instituted in 2005. By the end of 2012, when the Guardian Group received another $3M in dividends, they were aware of the Jeld-Wen lawsuit and they already knew of the 2011 Production problem.
 The Court does not believe Morrison’s testimony and affidavit that the 2011 Production problem came as a total surprise to the Guardian Group in July 2014. At the end of 2011, Cover had already identified the problem with the Bostik 9152 sealant, had found a suitable alternative and had already not only started phasing out the Bostik 9152 sealant from its production plants but also started replacing failed IGUs in 2012.
 How did the Guardian Group ever expect Cover to honour its obligations as they would become due and withdraw so much money in dividends?
 They could answer that Boudreault should have objected at the time and that he did not because Gestion was also collecting handsome amounts.
 It is true that with a 25% share, Gestion’s dividends were also significant but it is not the one who is intent on closing Cover and on ceasing its operations, closing its various plants and dismissing a 300 employee workforce without mentioning the numerous customers who count on its after-sale service and on its warranty support that will be left stranded.
 Filion also mentioned that declaring a $4M dividend in December 2013 with profits before income tax of $500,000 had to be taken as an indication that Cover shareholders were not anticipating any cash flow problems in the short term.
 Guardian responded that it was unaware of the 2011 Production failure and its “catastrophic” extent. Again, no one knows the true extent number of the IGUs of the 2011 Production that will truly fail in the future. But, Guardian conveniently adopted an unsubstantiated “catastrophic” 100% failure rate, a fact that is not supported by the preponderant evidence, to create a state of insolvency for Cover.
 Filion’s credibility and even his competence were attacked by the lawyer for the Guardian Group, based mainly on the comments made by a judge in a previous case. The Court appreciates the credibility of the witnesses who appear before it, based on the witness’ testimony and the evidence offered during the hearing. With all due respect, the Court is not bound by the comments or findings of other judges based testimonies delivered and the evidence offered in other trials.
 On the contrary, the Court found Filion’s testimony as an expert witness in his field of expertise as solid, credible and convincing; his report was very useful for the purposes hereof and was not tainted by any partiality.
 The Motion to Annul and the Accuracy Report seem to have induced Guardian and Guardian Canada to seek a new opinion from MNP and another one from Mr. Stephen Howes (“Howes”), an expert in IGUs.
- MNP’s report dated October 6, 2014 entitled “Cover Industries Inc. - Defect Liability - Financial Impact Assessment” (D-25)
 It must be pointed out that the present Motion to Annul prompted Guardian to “dig deeper” in order to justify the decision of its two designated directors to adopt the Assignment in Bankruptcy Resolution of August 22, 2014.
 MNP was asked by Guardian Canada to submit a second report. That second report came with conclusions far more alarming, if not depicting a greater catastrophic if not totally hopeless situation for Cover.
 Moreover, Guardian is now blaming Cover for having sold IGUs (the 2011 Production) that did not pass the certification process by the IGMAC, a competent certification authority; a fact that the two directors, Morrison and Zoulek, must now disclose without any delay to the Canadian population, hence the true purpose of their Motion for Review and Direction.
 In the context of contesting the present Motion to Annul, the Guardian Group retained the services of Howes, an expert in IGUs, who testified that in his own opinion, upon his examination of a samples of the IGUs manufactured by Cover in 2011 and other more recent samples, all IGUs manufactured by Cover until now will fail and will all have to be replaced.
 The second report filed by MNP accepts and uses Howes’ findings and conclusions to now adopt the assumption that every single IGU manufactured by Cover from 2011 until now is defective and must be replaced.
 If the findings and conclusions reached in those two additional expert reports are true, the message that the Guardian Group seems to convey to the Court is that it should only conclude that Cover’s operations have been a “total disaster” since 2011 and that it cannot manufacture a single IGU correctly. Regardless of the question of its insolvency on August 25, 2014, the company should be quickly “put out of its misery” for the greater benefit of its customers. Cover must stop its operations with any further delay and proceed with its liquidation under the BIA.
 Qui veut noyer son chien, l’accuse de la rage.
 MNP’s second report, dated October 6, 2014 (D-25) (“MNP’s second Report”), was ordered by Guardian Canada and aimed at confirming Hamel’s initial conclusions of the MNP Report that served to adopt the Assignment in Bankruptcy Resolution.
 However, Hamel used different hypotheses even more unlikely and improbable than the ones he used initially in his first report.
 In his first report, Hamel used the scenario representing Guardian’s concerns at the time, namely that 100% of the 2011 Production was defective and had to be replaced. In his second report, Hamel expressed the opinion that not only each and every IGU manufactured by Cover in 2011 was defective but that all subsequent productions until now were as well defective and must be entirely be replaced. In other words, since 2011 Cover never produced a single IGU that was not defective. Hamel based his new position on the report dated October 4, 2014, filed by the expert Howes (D-26) that will be examined subsequently.
 With all due respect, the Court has already expressed its serious reservations about Hamel’s first report and especially, his hypothesis of a 100% replacement rate of the 2011 Production. Nothing in the evidence gives any credence to such an eventuality that originated from Guardian’s concerns for the purpose of preparing the first MNP Report and putting Cover in bankruptcy.
 Hamel embraced Howes’ conclusions that the 2012, 2013 and 2014 productions would fail entirely as well. Hamel also maintained his 100% replacement scenario for the 2011 Production, despite Howes’ opinion that 80% to 90% of the 2011 Production will fail.
 Yet, the preponderant evidence established that Cover’s subsequent productions were manufactured with a different sealant that not only performed well, but the IGUs from these productions were duly certified.
 In his second report, Hamel surprisingly considered additional elements that were known at the time of preparing his first report.
 More importantly, Hamel acknowledged and corrected his error, identified by Filion, with respect to his use of the before tax replacement costs with after tax revenues. However, his three negative cash-flows that justified, under his three scenarios, his conclusion that Cover was insolvent under Test C on August 21, 2014, were no longer negative after applying the necessary adjustments identified by Filion.
 Hamel chose to change Cover’s anticipated revenues between 2014 and 2026 in the cash-flows used for his three scenarios (100%, 75% and 50% replacements).
 In his first report that served Morrison and Zoulek to vote the Assignment in Bankruptcy Resolution, Hamel used annual cash-flow projections of approximately $2.3M from 2014 to 2026; a projection that Filion considered acceptable, although somewhat conservative given Cover’s historical financial results.
 In his second report, Hamel replaced the annual projections of $2.3M with annual revenues of $119,010 from 2014 to 2026. To achieve that result, Hamel used the six-week cash flow that Cover produced with the Trustee following the Stay Order. This six-week cash-flow does not reflect in any way the normal operations of Cover but rather its anticipated income and expenditures on a short term basis after having been plunged into bankruptcy by the Guardian Group. It even includes the cash in advance in excess of $1M per month that it must pay to Guardian in order to continue being supplied by the latter with glass material and legal fees for Mtre Jacques Larochelle who is actively representing Cover in the Jeld-Wen lawsuit. There is nothing realistic about this short-term cash-flow that can be used to establish Cover’s insolvency on or before August 25, 2014.
 The Court is not concerned here with Cover’s financial situation under the existing bankruptcy process.
 The MNP second Report is of no use to assist the Court make such a determination. The measures adopted by Guardian and Guardian Canada since the filing of the Motion to Annul the Bankruptcy of Cover have been anything but helpful to allow Cover to continue its normal operations, as was contemplated by the Stay Order (the change of the credit terms by Guardian regarding the supply of glass to “Cash in advance”, Guardian’s objections to Scotia Bank extending funds under the existing short-term facility that Scotia Bank was ready to maintain available despite the bankruptcy, Guardian’s contestation of Gestion Motion for Interim Financing in virtue of which Gestion offered to advance $2M to Cover to maintain its operations are prime examples).
 Of course, if you prevent Cover from operating normally and significantly restrict its use of funds for its operations and its ability to generate revenues as it was before, in addition to having withdrawn some $4M in dividends a few months earlier, will guarantee that Cover is no longer and will no longer be able to honour its 15-year warranty and continue to replace defective IGUs as it was doing until then.
 However, this is not the test that the Court must make to determine if Cover was insolvent when the Assignment in Bankruptcy Resolution was adopted.
 The Court must determine whether Cover was indeed insolvent on August 22nd and on August 25th, 2014. In deciding whether an assignment ought not to have been filed, events must be considered as they existed when the assignment was filed: post-assignment events cannot be used to support the present application.
 The new scenarios developed by Hamel in his second report are so exaggerated and preposterous that they appear to have been tailor-made once again to reinforce Guardian’s wishes. Cover has to fail and disappear, no matter what the cost.
 This is not the type of conduct that the Court expects from an expert witness who is supposed to give an impartial opinion to assist the Court to make a decision. How can the Court give any credibility to an “amended” expert’s opinion that Cover’s adjusted annual revenues (that obviously should have been used in MNP’s first report), should not have been the conservative $2.3M (as labelled by Filion) but rather $119,010 based on six-week cash-flow readjusted by Hamel to span 12 years from 2014 to 2026?
 The role adopted by Hamel is even more dubious in the Court’s eyes, when the expert witness considers in his second report the $18 million Option and the Bocenor and Jeld-Wen lawsuits at face value.
 In his first report, Hamel did not consider in his calculations the Bocenor and the Jeld-Wen lawsuits as, according to him, they could not be quantified in the context of his attempt to determine the insolvency of Cover at the time:
“The calculations performed do not take into account some facts that are not quantifiable at the time of this report. For example: the judgement against Cover for which the quantum of damages is unknown [Bocenor]; the Motion to institute proceedings against Cover for which the amount claimed is approximately $4.6 million; […]”
 A few weeks later, the expert witness adopts a different approach in his second report. He adds $6,386,093 to Cover’s liabilities related to those two lawsuits. This total amount represents the full face value of the two lawsuits.
 This abrupt change in such a short period of time on Hamel’s part is difficult to understand. What made change Hamel’s mind?
 The Court understands that during that period of time, Hamel was provided with the Bocenor judgment rendered on February 22, 2013 in virtue of which Cover was found liable with two co-defendants. In the Bocenor case, the extent of Cover’s liability for this 2005 lawsuit has yet to be determined by the judge who has taken the case under advisement. Nobody knows the amount of Cover’s condemnation considering also the presence of two co-defendants.
 Hamel was also provided with the Jeld-Wen’s Motion to Institute Legal Proceedings against Cover filed in July 2012.
 During his testimony, Hamel acknowledged that he made no further attempts to determine the validity of those two claims taken at their face value of $6,386,093. Hamel did not try to obtain Cover’s defences filed in both cases, nor the expert reports, nor did he try to contact Cover’s lawyer, Mtre Jacques Larochelle, who incidentally testified under “huis clos” about those two cases.
 With all due respect, Mtre Larochelle’s testimony left serious doubts in the Court’s mind about the validity of the assumptions made by Hamel regarding Cover’s potential exposure in these lawsuits. Hamel’s sudden reliance on two documents with these two lawsuits that were available before his first report is clearly not sufficient, in the Court’s opinion, to give credibility to the decision of the expert witness to add more than $6M to Cover’s liabilities when a few weeks earlier, he could not quantify these contingent liabilities.
 To all intents and purposes, Hamel’s position in his second report seems to reflect the same approach taken by Guardian for the purpose of these legal proceedings. Guardian is ready to admit liabilities, any possible liabilities using the worst and most catastrophic scenarios that will generate the highest amount of debts and liabilities possible (100% replacement rate scenario, otherwise contested lawsuits at face value, etc.).
 Finally, Hamel decided to add the $18 million Option as a liability of Cover to justify its insolvency as at August 21st, 2014, another fact know to him when he submitted his first report.
 As an expert specialised in insolvency, Hamel knew very well or should have known, that this amount could not be considered on August 21, 2014 to determine the insolvency of Cover.
 Firstly, the Option had not been exercised and was not due at the time. That is undoubtedly why he did not consider it in his first report. Secondly, had Hamel read the 2010 Shareholders’ Agreement, the latter would have realised that triggering the bankruptcy of Cover terminated automatically the Agreement and more importantly, voided the Option and the Guardian Guarantee. Moreover, if it was exercised by Gestion and that Cover could not pay the minimum purchase price, as it was always contemplated given the amount of dividends declared over the years, only Guardian was capable and liable to pay the same amount as a principal debtor and not merely as a surety.
 The Court gives no credence to MNP second Report, a document that contains unrealistic, unsupported and grossly exaggerated hypotheses and assumptions to depict, if not artificially create, a false state of insolvency.
- Mr. Stephen Howes report dated October 4, 2014 entitled “Insulating Glass Failures of Industries Cover, Inc.” (D-26)
 Howes is an expert in IGUs who testified in support of his report entitled “Insulated Glass Failures of Industries Cover, Inc.” (D-26) (the “Howes Report”). Howes’ services were retained by the lawyers for the Guardian Group after the institution of the present proceedings. His report did not exist when the Assignment in Bankruptcy Resolution was adopted by Morrison and Zoulek.
 Howes concluded in his report that some 80% to 90% of the 2011 Production was defective. Howes based his conclusion on his inspection at Guardian’s offices of some ten IGUs from the 2011 Production that were defective. In the Court’s view, such an opinion is astonishing given that Howes was able to come to such a firm conclusion affecting 679,392 IGUs produced in 2011 after having examined only ten of those units that were known to be defective and parts of some dismantled units, also defective and apparently coming from the same production.
 Let us not forget that under the 2010 HB Fuller test, four of six IGUs assembled with Bostik 9152 sealant passed a 22-week P1 Chamber test and a fifth one passed the 15-week level before failing.
 During his testimony, Howes acknowledged that he did not take into consideration various factors that influence the longevity of IGUs (the glazing of the IGU, the orientation of the IGU once installed, the weather conditions, etc.).
 There is no convincing and credible evidence that 80%, 90% and even 100% of the 2011 Production will fail with certainty. The only certainty is that by August 2014, 7.33% of the 2011 Production had been replaced in a three-year period and that the number of replaced IGUs rose to 7.9% at the time of the hearing in mid-October 2014. With all due respect, the Court does not see any convincing evidence that the above mentioned rates are realistic and sufficiently probable to be utilised.
 These conclusions remain opinions that, in all appearances, seem to have been dictated or expected by Guardian’s need to establish the insolvency of Cover as at August 22nd, 2014 and justify the decision of its two directors, Morrison and Zoulek, to adopt the Assignment in Bankruptcy Resolution.
 Without a very high return rate or failure rate to occur under a 15-year warranty program ending in 2026, the insolvency of Cover in August 2014 is very difficult, if not impossible to establish.
 Howes also examined some 29 IGUs apparently manufactured by Cover in 2014 and found that the workmanship at Cover that was, in his view, deficient in the 2011 Production (based on his examination a 10 IGUs and of some dismantled parts) was deficient as well even to this date, leading him and Hamel to conclude that not only the 2011 Production will fail but all subsequent productions until now, all these findings without Howes ever visiting a single plant of Cover or meeting with a single of its employees involved in the manufacturing process before expressing such opinions.
 It must be pointed out that in his report, Howes referred to the 2010 HB Fuller tests as follows:
“The results of the HB Fuller testing, dated Dec. 16, 2009, were in my opinion at best inconclusive, with the combination of the materials, method and workmanship (not done by Cover) as more units failed the testing than passed.
If Erdman cannot get all of the HP Fuller Test Units to last in a PI chamber test, as these results showed, then you can conclude there is a problem with the equipment/method of the application and further testing should be carried out to establish the problem. Certainly before going ahead into production of IG units with these same methods, materials and equipment.
Although the tests showed the chosen sealant, Bostik 5192, combined with Inex Spacer, glass, PIB, desiccant, can reach 24 weeks in a PI chamber @ -80F frost-point, it is my opinion that because of the high percentage of failures of the units in the PI test Chamber, further testing and investigation should have been taken before changing to these product combinations and methods in August 2010.”
 During his cross-examination, Howes had to admit that his abovementioned opinion was based on his reading of the Technical report dated December 16, 2009, a synopsis that reported erroneous test results. The expert witness acknowledged that he did not read the actual test results of the 2010 HB Fuller, that were attached to the Technical Report, and that showed indeed a 66.6% success rate for the IGUs assembled with Bostik 5192 sealant that were tested in the P1 Chamber during a 22-week period (4 out 6 IGUs) and a fifth one failing after a 15-week period, contrary to what is indicated in his own report.
 Howes also mentioned in his report that the spacers found in the 2011 Production IGUs that he had examined were stamped with the IGMAC logo which constituted, in his opinion, a misrepresentation as this type of IGU (Inex spacer with Bostik 5192 sealant) never passed the IGMAC certification process.
 Although in his report the expert witness led the reader to believe that Cover was selling all its subsequent production IGUs bearing the IGMAC logo without the proper certification, Howes had to recognize that other than the problematic 2011 Production, Cover had the proper certification for the following productions.
 The certification issue raised by Howes became a new major issue for Guardian justifying the immediate bankruptcy of Cover and the urgency to notify the population that products manufactured and sold by Cover were not only defective but were falsely represented as having been certified by IGMAC.
 As previously mentioned, for the purpose of determining the insolvency of Cover, the issue of the lack of certification in itself is not proof nor a guarantee that all IGUs that have not been certified will automatically fail.
- The three insolvency tests under the BIA
 For the purpose of examining the insolvency of Cover, in the Court’s opinion, the three tests must be made as of August 22, 2014, the date at which the Assignment in Bankruptcy Resolution was adopted by Morrison and Zoulek. In that resolution, the two directors acknowledge that Cover was insolvent and was unable to meet its obligations as they became due.
 One must bear in mind that their decision to adopt the aforesaid resolution was based on the findings and conclusions of the MNP Report dated August 21, 2014 (R-6).
 It must be pointed out that the Court already found the scenarios adopted by MNP to be grossly exaggerated, based on the preponderant evidence. The Court will however use those three scenarios to verify whether Cover was insolvent at that date.
 The expert witness Filion convinced the Court that the errors made by Hamel in his three original cash-flows attached to the MNP Report were so significant regarding the before tax replacement cost of the 2011 Production that it will rely on the same three cash-flows corrected this time by Filion, who used the same projected annual revenues of Cover that Hamel found acceptable when he drafted his first report.
 The Court has already explained why it will not consider Hamel’s incredible annual revenue projections of $119,010 used in his second report.
 At the outset, the second test (Test B) can be easily ruled out. There is ample compelling evidence that on August 22, 2014, Cover had not ceased paying its current obligations in the ordinary course of business, as they were generally becoming due.
 As to the first test (Test A), was Cover unable to meet its obligations for any reason as they generally became due on August 22, 2014?
 The inability of a debtor to meet its obligations “for any reason”, as they generally become due contemplated in Test A, implies that it must be considered on the short term basis or in the immediate future.
 Again, the preponderant evidence convinces the Court that Cover did not meet this specific test on August 22, 2014 or on the following Monday, August 25, 2014.
 On a short-term basis, Cover was clearly able to meet its obligations as they generally became due. In fact, based on Hamel’s first cash-flows corrected by Filion, the present conclusion is obvious.
 The third test (Test C) is the most challenging one. In fact, it is the one used and relied upon by the directors designated by Guardian Canada to justify their decision to file for a voluntary assignment in bankruptcy with the assistance of the MNP Report dated August 21, 2014 (R-6). A significant portion of the MNP Report is consecrated to Test C to enable the conclusion that Cover met that third test in light of its eventual obligations and contingent claims stemming from the 2011 Production.
 As the three tests are not cumulative, Guardian Canada and Guardian argued, with the active support of the Trustee and the assistance of MNP, that MNP’s conclusions clearly showed that Cover met that specific test in August 2014 and must therefore be considered to be an “insolvent person” within the meaning of the BIA at that time.
 The residential IGUs manufactured by Cover during the year 2011 were the main reason why, in Guardian and Guardian Canada’s view, Cover was deemed to be insolvent under Test C on August 22, 2014. The Respondents found, after the fact, additional reasons to justify their decision to put (or maintain) Cover in bankruptcy. But, the Court must make its determination based on the facts and circumstances as they existed on August 22, 2014. For instance, it will not consider the preposterous notion that each and every IGU manufactured to this day by Cover is defective and will have to be replaced. Despite Guardian’s expert report submitted by Howes, there is no convincing evidence that the 2012, 2013 or the 2014 productions were affected with the same problem or showed a higher than normal rate of return. There is no compelling evidence either that the new sealant, used subsequently in replacement of the Bostik 5192, gave any sign of incompatibility.
 The 2011 Production of IGUs has been determined to be problematic in that the poor compatibility of the Bostik 5192 sealant with the Inex spacer was causing potential leakage and a shorter life period. A greater than normal rate of returned 2011 IGUs started showing in 2012 and accentuated in 2013. For the purposes hereof, Guardian has adopted the position that the entire 2011 production of 679,392 residential IGUs is defective and that each unit will have to be replaced.
 Boudreault and his son Terence discovered the seriousness of the compatibility issue between the Inex spacer and the sealant Bostik 9152 used in the 2011 Production and corrected the situation.
 The evidence reveals that by mid-August 2014, the 2011 Production return rate had reached 7.33% (7.9% during the trial), clearly a higher than usual rate compared to past and subsequent productions and Cover’s management expected the trend to continue to increase and eventually peak.
 In that context, the evidence shows that until August 22, 2014, Cover was successfully honouring its warranty program and believed that it should continue to do so despite Guardian’s objection that labour costs be assumed as well by Cover.
 There is no doubt that the 2011 Production issue will affect the overall profitability of Cover on a short and medium term basis, but Boudreault and Terence strongly dispute the idea that 100% or 75% of the 2011 Production will have to be replaced. Not all IGUs will prove to be defective and with the passage of time, Cover should be able to replace, under its warranty program, the defective ones. Of course, if they all (100%) had to be replaced on August 22, 2014, Cover would have faced a major problem. But, such a proposition dictated by Guardian to MNP is not only highly hypothetical but unrealistic and unproven as well.
 The Court agrees with Boudreault and Terence on that question.
 When favouring the existence of contingent claims totalling some $42M stemming from the 100% failure of the 2011 Production and the necessity of replacing all 679,392 IGUs, we are far from the concept of contingent claims that are “sufficiently certain” within the meaning considered by the Supreme Court of Canada in the AbitibiBowater case.
 Based on the evidence, what is “sufficiently certain” is that there will be a higher than normal rate of replacement of the 2011 Production but there is no compelling evidence, in the Court’s view, that all IGUs or even 75% of the 2011 Production IGUs will need to be replaced.
 Under its three scenarios, MNP gave an actualised value to the aggregate replacement costs to be incurred by Cover until 2026. The results yielded an estimated liability of $42M (based on the 100% replacement scenario with an actual value as of July 31, 2014 at $36M) to $21M (based on the 50% replacement scenario with an actual value as of July 31, 2014 at $19M). With assets valued at some $14M as of July 31st, 2014, Cover was clearly insolvent within the provisions of the third test. Cover was financially incapable to proceed to the said replacement in August 2014; hence its state of insolvency under Test C. Cover can only meet Test C with the addition of contingent claims. Otherwise, it cannot be deemed insolvent.
 The Statement of affairs (R-10) signed by Morrison and filed with the Trustee on August 22, 2014 (R-10), reveals a deficiency of $34,901,467 with:
- Assets of $12,334,003; and
- Liabilities of $47,235,470 composed of:
§ Unsecured claims of: $2,355,007;
§ Secured claims of: $2,330,001;
§ Contingent claims of $42,550,462.
 The contingent claims are identified by enumerating each and every client of Cover with an amount of liability or claim of $1 each. Morrison even added the commercial customers that never purchased the 2011 Production IGUs.
 Incidentally, Jeld-Wen is also identified as a contingent claim with a $1 value. Yet, Hamel retains in his second report the $4.6M face value. There is no mention of the Bocenor claim.
 The Court understands that upon signing such a Statement of affairs (R-10) on behalf of Cover, Morrison acknowledged that, in is opinion based on the Assignment in Bankruptcy Resolution, the latter was insolvent and had to resort to an orderly liquidation of its assets, essentially because the entire 2011 IGUs production had to be replaced and that each and every client of Cover had a contingent claim on August 25, 2014 totalling $42,550,462.
 Without these “contingent claims”, Cover was clearly not insolvent. Moreover, Morrison does not seem to have taken into consideration the fact that at the time Cover had already replaced or was in the process of replacing some 7% of the 2011 Production.
 In any event, these $42M contingent claims were crucial to successfully pass Test C.
 Can these contingent claims be considered as obligations of Cover that were due and accruing due as at August 22, 2014, within the meaning of paragraph c) of the definition of an “insolvent person” in the BIA?
 How does the jurisprudence approach that specific test that carries a significant different approach compared to the other two tests?
 That question must be approached and answered bearing in mind the principles underlying the BIA previously mentioned.
 The Court is of the view that for the purpose of Test C, only the existing financial obligations at that moment and their modalities of payment, if any, must be taken into consideration.
 Based on the preponderant evidence, the Court finds that there is no “sufficient certainty” that these contingent claims of $42M existed or that they would even come to exist in the future.
 Moreover, there is compelling evidence based on MNP’s cash-flow adjusted with Filion’s corrections under the third scenario with an unlikely 50% return rate over next 11 years until 2026, that Cover will have the necessary positive cash-flow to honour its warranty on the IGUs of the 2011 Production that will become defective, as the case maybe.
 The Court cannot accept Guardian’s simplistic argument that Test C should be applied, to all intents and purposes, blindly or in a void by virtually ignoring Cover’s present financial condition, its capacity to generate revenues under normal circumstances, its capacity and willingness to continue to honour valid claims made under its warranty program, as and when they are filed with Cover.
 The Court cannot ignore either the reality of the present case.
 The Court cannot ignore that the majority shareholder instructed its designated directors to cause Cover to admit its insolvency, based on a trumped-up and self-serving 100% replacement rate scenario assessed at $42M with the kind and complacent assistance of MNP who determined that despite the fact that the $42M artificial and highly conjectural liability would be generated over a 12-year period from 2014 to 2026, MNP determined that this contingent liability had an actual value of $35.74M, hence automatically placing Cover in a state of “legal” insolvency pursuant to Test C of the BIA.
 The Court refuses to believe that such a simplistic approach meets or respects the spirit of the BIA.
 Otherwise, how many law firms and accounting firms would easily be deemed insolvent under Test C, as proposed by Guardian’s lawyers?
 The Tribunal is in total agreement with the following comments of Justice Ground in the case of Enterprise Capital Management Inc. v. Semi-Tech Corp.:
“ Whatever relevance such definition may have had for purposes of dealing with claims by and against companies in liquidation under the old winding up legislation, it is apparent to me that it should not be applied to definitions of insolvency. To include every debt payable at some future date in “accruing due” for the purposes of insolvency tests would render numerous corporations, with long term debt due over a period of years in the future and anticipated to be paid out of future income, “insolvent” for purposes of the BIA and therefore the CCAA. For the same reason, I do not accept the statement quoted in the Enterprise factum from the decision of the Bankruptcy Court for the Southern District of New York in Centennial Textiles Inc., Re, 220 B.R. 165 (U.S. N.Y.D.C. 1998) that “if the present saleable value of assets are less than the amount required to pay existing debt as they mature, the debtor is insolvent”. In my view the obligations, which are to be measured against the fair valuation of a company’s property as being obligations due and accruing due, must be limited to obligations currently payable or properly chargeable to the accounting period during which the test is being applied as, for example, a sinking fund payment due within the current year. Black’s Law Dictionary defines “accrued liability” as “an obligation or debt which is properly chargeable in a given accounting period but which is not yet paid or payable”. The principal amount of the Notes is neither due nor accruing due in this sense.”
 In Les Oblats de Marie Immaculée du Manitoba (Re), Justice Schwartz quite appropriately made a distinction between the possibility of a debt becoming due or accruing due as opposed to a probability:
“ The remarks of Ground J. in Enterprise Capital Management Inc. v. Semi-Tech Corp. (1999) 10 C.B.R. (4 th) 133 are on point.
 This evidence as to the value of the IRS claims is based on possibilities rather than probabilities and is not sufficient to meet the CCAA value test of debts due or accruing due. The use of the term “possible” as distinguished from probable is not accidental.
 Likewise the cost of defence and the cost of supporting the retirees has not been sufficiently quantified to be considered as a debt due or accruing due.
 Further, the financial statements at December 31, 2000 (Exhibit “E” of Fiori’s affidavit) and December 31, 2001 (Exhibit “F” of the same affidavit) do not estimate the IRS claims or show them as liabilities.”
 The Court believes that within the meaning of the BIA, no one should consider being insolvent on the sole basis that its liabilities exceed its assets at a given time. One must as well appreciate the person’s solvency by examining its capacity to honour its financial obligations as they become due and in compliance with the requirements of its creditors.
 In re Bonneau, Justice Fournier stressed the importance of not adopting a restrictive interpretation of the expression “accruing due” in paragraph c) as follows :
"36 S’il fallait que toutes les personnes qui ont des paiements mensuels future (sic) à faire décident par une fiction de l’esprit de rendre tous ces paiements mensuels futurs exigibles sur le champ pour estimer leur “solvabilité”, une bonne partie de la population pourrait ou devrait faire faillite, ce qui est un non-sens.
37 Les mots “obligations à échoir” du paragraphe c) de la définition de “personne insolvable” pris dans un sens isolé pourraient, par une interprétation stricte, procurer ce non-sens.
38 Ce n’est certainement pas le but du législateur de créer un tel non-sens.
39 Le Tribunal est d’avis que la nature et les termes futurs de toutes obligations “à échoir” doivent être pris en considération lorsqu’est analysé le sens de ce paragraphe c) de la définition de “personne insolvable”."
 The Tribunal also endorses Madam Justice Bédard’s following analysis on this subject that reflects very well the approach that must be favoured under such circumstances:
“2o Lors de la cession de biens, l’intimé était-il insolvable?
 Il importe de rappeler que la faillite ne peut être accordée qu’à une personne insolvable. Suivant l’article 2 L.f.i., la définition de personne insolvable se lit comme suit :
« Personne qui n’est pas en faillite et qui réside au Canada ou y exerce ses activités ou qui a des biens au Canada, dont les obligations, constituant à l’égard de ses créanciers des réclamations prouvables aux termes de la présente loi, s’élèvent à mille dollars et, selon le cas :
a) qui, pour une raison quelconque, est incapable de faire honneur à ses obligations au fur et à mesure de leur échéance;
b) qui a cessé d’acquitter ses obligations courantes dans le cours ordinaire des affaires au fur et à mesure de leur échéance;
c) dont la totalité des biens n’est pas suffisante, d’après une juste estimation, ou ne suffirait pas, s’il en était disposé lors d’une vente bien conduite par autorité de justice, pour permettre l’acquittement de toutes ses obligations échues ou à échoir. »
 Ainsi, selon cette disposition, une personne n’est pas insolvable par le seul fait que son passif excède son actif. Afin d’apprécier la solvabilité du débiteur, il est nécessaire d’évaluer sa capacité de faire honneur à ses engagements « selon les exigences normales de ses créanciers ». De plus, l’insolvabilité d’une personne est constatée lorsque la valeur de ses biens est inférieure à celle de ses dettes, et que ses revenus ne laissent pas prévoir la possibilité d’une amélioration dans le futur.
 Toutefois, une personne ne sera pas insolvable lorsque ses revenus lui permettent de rembourser les dettes au fur et à mesure de leur échéance. À titre d’exemple, dans l’affaire In re Tousignant, la Cour d’appel du Québec expose la situation qui suit :
« N’est pas une personne insolvable au sens de la loi, le débiteur dont la seule dette résulte d’un emprunt de 25 000 $ auprès d’une banque, mais qui a un emploi stable depuis 19 ans, un revenu annuel de 45 000$ et des dépenses mensuelles variant entre 1 200$ et 1 700$. Malgré un actif limité à 3 300$, il est en mesure de faire face à ses obligations, à plus forte raison si son créancier est prêt à faire des arrangements pour lui octroyer des délais ».
 Lorsqu’une personne solvable fait appel au mécanisme de la faillite, l’annulation de cette faillite peut être demandée. L’article 181 L.f.i. accorde au tribunal le pouvoir d’annuler la faillite. C’est la base de la présente requête.
 Rappelons qu’en matière d’annulation de faillite, chaque cas est un cas d’espèce. Le pouvoir du tribunal d’annuler une faillite est discrétionnaire. L’annulation de la faillite peut être accordée lorsque le débiteur est en mesure de faire face à ses obligations à leur échéance, à plus forte raison si le créancier offre de lui consentir des accommodements et délais pour le remboursement."
 In the present instance, the inclusion of some $42M of contingent claims conveniently acknowledged by Guardian and Guardian Canada, was absolutely necessary in Guardian’s attempt to establish the alleged insolvency of Cover in August 2014. While these claims could potentially constitute provable claims in bankruptcy, pursuant to Section 121 and following BIA, they are nevertheless eventual and unliquidated, if not completely hypothetical and conjectural claims that cannot and should not be utilised to establish or justify the insolvency of Cover.
 Again, there is nothing “sufficiently certain” about these eventual claims to the extent (100% or 75%) that Guardian wants acknowledged by Cover. Nobody knows with “sufficient certainty” the actual amount of these eventual and contingent claims. But, in the Court’s view, the “sufficiently certain” number is nowhere near what has been anticipated by Guardian who, in any event has showed through its witness Morrison and its lawyers, that it is ready to admit to any indebtedness in the name of Cover to achieve its dubious goal. The Bocenor and the Jeld-Wen lawsuits are prime examples. On one hand, Cover is contesting actively and in good faith the Jeld-Wen lawsuit and on the other hand, Guardian is adamant to admit Cover’s liability on the face value of Jeld-Wen’s lawsuit.
 Jeld-Wen should not interpret Guardian’s self-serving manoeuvres as a form of confession of judgment by Cover.
 On August 22, 2014, approximately 7.33% of the 2011 Production had already been replaced or was in the process of being replaced under Cover’s warranty program. Boudreault and his son Terence have always taken the position that Cover could continue and would continue to honour the warranty that came with the IGUs.
 Other than a self-serving grossly exaggerated admission by Guardian and Guardian Canada that the entire 2011 Production was defective and each and every IGU had to be replaced immediately to establish Cover’s insolvency, the Court is of the opinion that such contingent claims, based on Cover’s warranty, do not begin to exist before the IGU under warranty gives signs that it is indeed affected by a defect that prevents it from serving the purpose or the function for which it was purchased in the first place.
 On August 22nd, 2014, Boudreault had not exercised Gestion’s Option pursuant to the 2010 Shareholders’ Agreement. In fact, he had agreed to postpone its exercise until the end of 2016 at the specific request of Guardian via Morrison. Boudreault had agreed to remain at the helm of Cover’s operations for two more years and he had accepted Guardian’s proposal to sell some of his shares to Guardian Canada for $10M in order to facilitate the merger of Guardian Canada with Cover.
 Why then provoke Cover’s bankruptcy without any prior warning to Boudreault and with the MNP Report that was ordered a few days before calling the special meeting of the Board of directors and released within less than 24 hours before passing the Assignment in Bankruptcy Resolution?
 The only logical and most probable explanation offered by Gestion’s lawyers is amply supported by the preponderant evidence.
 In the spring of 2013, Guardian had proposed to amend the 2010 Shareholders’ Agreement delay by two years the exercise of the Option, have Guardian Canada acquire 14% of Gestion’s stake in Cover for $10M and pave the way for the merger of Cover with Guardian Canada. Guardian’s intentions were reaffirmed in an internal memo dated October 31, 2013 (R-20) and with the delivery to Gestion of draft closing documents in December 2013 (R-20). At that time, Guardian was aware of the particular problems related to the 2011 Production for months and still proposed to proceed with the $10M transaction.
 The new ownership acquired the control of Guardian at the end of December 2013 or at the beginning of January 2014 and in all likelihood, decided that Guardian should not go ahead with the $10M transaction. They did not want to acquire a portion of Gestion’s shares for $10M with an $8M balance being paid after September 1st, 2016, when Gestion would be able to exercise the Option once amended.
 In all probabilities, even if Guardian did not proceed with the $10M transaction, it realized that the Guardian Guarantee bearing a price tag of $18M granted in the 2010 Shareholders’ Agreement made it personally liable as “principal debtor” to Gestion under the said agreement should it exercise its Option to redeem its shares in Cover commencing on September 1st, 2014.
 Guardian wanted out and found a solution that entailed sacrificing Cover. Putting its own subsidiary in bankruptcy would terminate the 2010 Shareholders’ Agreement and void the Option and the Guardian Guarantee. However, the bankruptcy had to occur before Gestion could exercise its Option, thus before September 1st, 2014.
 That was the only true reason to act in such haste.
 During the hearing, Guardian lawyers made great strides to establish that Guardian, to all intents and purposes, had lost all confidence in Boudreault, his son Terence and their management team at Cover for their lack of transparency regarding the 2011 production failure and the lack of certification of the IGUs produced in 2011.
 It is necessary to point out that the Court is not sitting here in a liability hearing between shareholders or in an oppression remedy.
 Lack of trust of a shareholder towards another and alleged mismanagement are not a basis to have a corporation file an assignment in bankruptcy.
 In theory, whether Guardian knew or not of the 2011 Production problems and of the non-certification issue or whether it should have known about these issues with the information conveyed monthly by Cover at the time cannot form the basis upon which is determined Cover’s state of alleged insolvency on August 22, 2014.
 The circumstances and the preponderant evidence lead the Court to the following findings and conclusions.
 The decision to put Cover in bankruptcy was made by Guardian well before August 22, 2014 but in any event after December 2013, at which time the $10M transaction with Gestion almost took place. Guardian’s decision was final. Nothing that Boudreault could have said, nothing that he could have done would have stopped Guardian from implementing its plan, at least, until Gestion’s Motion to Annul the Bankruptcy of Cover.
 But Guardian could not resort to the provisions of the BIA with Cover’s then real financial situation. Krywko, Guardian’s in-house counsel, told Morrison that Cover did not have any problems with its creditors. The problem was with its customers and its customers’ customers referring to the 2011 Production.
 The Statement of affairs (R-10) signed by Morrison is quite eloquent on that point.
 The problems related to the 2011 Production of residential IGUs were known by all parties much before July 2014 and they were being dealt with properly by Cover (but in a too generous and unnecessary manner in Guardian’s view). However, the creation of a false “catastrophic discovery” of the 2011 Production in July 2014 became Guardian’s keystone in its plan to provoke the “liquidation” of Cover, with the assistance of the BIA.
 With all due respect, the Court finds that MNP Report (R-6) has all the indications of a complacency report prepared to justify Guardian’s already made decision and to permit the use of the provisions and the remedies offered by the BIA to reach Guardian’s goal.
 The Court also finds that Guardian’s sole objective in this unfortunate and tragic affair was to provoke the bankruptcy of Cover to terminate the 2010 Shareholders’ Agreement, void the Option, prevent Gestion from exercising it commencing on September 1st, 2014 and most important of all, void as a result thereof the Guardian Guarantee in virtue of which Guardian was the principal debtor of a $18M undertaking to purchase Gestion’s shares in Cover. Guardian was the principal party and principal debtor in the redemption of Gestion’s shares as it conveyed full ownership of Cover to Guardian through its wholly-owned subsidiary Guardian Canada.
 The preponderant evidence reveals that in all probabilities Guardian (with its new ownership) lost all interest in Cover, due to its shrinking market share and reduced profits. Add to that fact the problems related to the 2011 Production and the $18 million Option, Guardian had no further interest in acquiring the full ownership of Cover via the Option. The $10M transaction of December 2013 was abandoned. Guardian no longer wanted to merge Guardian Canada with Cover. Consequently, it was out of question that Guardian would exercise itself the Option and the latter definitely did not want that Gestion exercises the Option on or after September 1, 2014. Guardian’s chosen solution was to provoke the bankruptcy of Cover. Guardian did not care that Cover was able to honour its after-sale service and warranty program, as established by the expert witness Filion. As Morrison stated, Guardian was to take a “financial penalty”.
 Why take a “financial penalty” if Guardian could avoid it and save $18M at the same time?
 Cover, its 300 workforce and its numerous customers who trusted Cover’s products and counted on its after-sale service and warranty program which was and could still be honoured by Cover’s management, became the collateral victims of Guardian’s devious machinations to extricate itself of financial obligations that it no longer wanted to honour.
 That is the backdrop of these bankruptcy proceedings.
 Sections 181 and 182 BIA, establish the discretion the Court enjoys under such circumstances:
“181. (1) If, in the opinion of the court, a bankruptcy order ought not to have been made or an assignment ought not to have been filed, the court may by order annul the bankruptcy.
(2) If an order is made under subsection (1) all sales, dispositions of property, payments duly made and acts done before the making of the order by the trustee or other person acting under the trustee’s authority, or by the court, are valid, but the property of the bankrupt shall vest in any person that the court may appoint, or, in default of any appointment, revert to the bankrupt for all the estate, or interest or right of the trustee in the estate, on any terms and subject to any conditions, if any, that the court may order.
(3) If an order is made under subsection (1), the trustee shall, without delay, prepare the final statements of receipts and disbursements referred to in section 151.
182. (1) An order of discharge or annulment shall be dated on the day on which it is made, but it shall not be issued or delivered until the expiration of the time allowed for an appeal, and, if an appeal is entered, not until the appeal has been finally disposed of.”
 In the matter of Moss (Re), Justice Steel expressed the view that an examination of the full background surrounding the assignment had to be made in order to properly determine whether an annulment should be granted:
“ There are a number of grounds upon which courts have annulled an assignment including mistake, fraud, a clear sufficiency of assets to pay all creditors’ claims and abuse of process. (See Re 609940 Ont. Inc., etc. [Ont.] (1985), 57 C.B.R. 137 (Ont. S.C.).) If an abuse of process exists, the court may exercise its discretion to annul even where the bankrupt meets the criteria of an insolvent person.
 The term “abuse of process” is not easily susceptible to precise definition. In Shaw v. Trudel (1988), 53 Man.R. (2d) 10 (Man. Q.B.), Kennedy J. defines it in the following terms:
a term used to describe an improper use of the judicial proceedings and may arise if jurisdiction were exceeded. It arises when a legal process with some legitimacy is used for some ulterior motive, other than that for which it was intended. It is invoked to protect against harassment, or the perversion of the process to accomplish an improper result. (p. 12)
 The conduct of the bankrupt must be tainted by bad motives in order to justify a finding of abuse of process. (See Blaxland v. Fuller (1990), 2 C.B.R. (3d) 125 (B.C.S.C.) at p. 127.)
 For example, in the case of Henfrey Samson Belair Ltd. v. Manolescu (1985), 58 C.B.R. (N.S.) 181 (B.C.C.A.), the abuse of process consisted of the bankrupt making an assignment in bankruptcy in contravention of a court order that one of the creditors be given seven days notice before any of the debtor’s assets were dealt with in any way. On the facts, the court felt that bad motive could clearly be inferred. In Good, Re (1991), 4 C.B.R. 12 (3d) (Ont. Bktcy.), the assignment in bankruptcy was annulled in a situation where a husband, after 33 years of marriage, was:
determined to destroy himself and all of his assets rather than allow his wife the benefit of any of those assets. (p. 14)
 In Wale, Re (1996), 45 C.B.R. (3d) 15 (Ont. Bktcy.), the husband’s assignment in bankruptcy was date-stamped by the official receiver an hour and a half before the commencement of his family law trial.
 In exercising my discretion, I adopt the analysis followed in the case of Wale, Re. In that case, the court indicated that the debtor’s motive is the primary consideration in determining whether an abuse of process or fraud exists. Some of the questions the court might pose to ascertain the debtor’s motive are:
1. Is the debtor’s financial situation genuinely overwhelming or could it have been managed?
2. Was the timing of the assignment related to another agenda or was bankruptcy inevitable in the near or relatively near future?
3. Was the debtor forthcoming in revealing his situation to his creditors or did he hide assets or prefer some creditors over others?
4. Did the debtor convert money or assets to himself which would otherwise have been assets in the bankruptcy?
5. What had been the debtor’s relationship with his creditors, particularly his major ones? Was it such that they might have assisted him if he had approached them by granting time or terms of repayment or had any goodwill been destroyed by past unfulfilled promises?
6. Are there other relationships - business partnerships, shareholder arrangements, spousal, competitors for an asset or simply personal associations which could cast light on a possible bad faith motive for making an assignment?
 In short, an examination of the full background surrounding the assignment must be made in order to properly determine whether an annulment should be granted (Blaxland v. Fuller, supra, at p. 128).”
 Our Court of Appeal has made the following quite appropriate comments in Tousignant v. Banque de Nouvelle-Écosse:
“ La LFI a pour but de protéger le débiteur, le créancier ainsi que l’intérêt public, afin de s’assurer que la loi ne deviendra pas un moyen de se débarrasser de ses obligations.
 Il y a donc des distinctions à faire afin d’éviter de pénaliser un débiteur qui agirait dans le but de se refaire une santé financière et celui qui, même insolvable, n’agit que pour désavantager ses créanciers. Le professeur Albert Bohémier s’exprime ainsi à ce sujet :
On doit distinguer entre le débiteur qui agi dans le but de trouver un remède à son état d’insolvabilité et celui qui, bien qu’insolvable, ait agi principalement dans le but de frustrer ses créanciers. On perçoit la distinction, mais elle est d’application délicate. Le tribunal doit prendre en considération les circonstances entourant la cession : le nombre de créanciers, la nature et la date des jugements rendus contre le débiteur, le caractère plus ou moins opportun de l’empressement manifesté par le débiteur dans l’exécution de sa cession.
 En l’espèce, je suis d’avis que l’appelant n’a pas fait une telle démonstration. Il a un emploi stable depuis 21 ans auprès d’Hydro-Québec, qui lui procure un revenu annuel d’environ 45 000$. Il verse actuellement 150 $ par mois au syndic et il a racheté son seul bien, soit la camionnette. Il soutient qu’il a des dépenses fixes et diverses autres pour un montant de 1772 $, dont entre autres des dépenses pour l’essence de son camion de 350 $, duquel seulement 40 $ pour son travail. Il admet ne pas avoir tenté de négocier avec la Banque autrement que pour demander une extension d’un versement, qui lui a été refusée. Il n’a pas tenté de rencontrer la Banque pour discuter de solution possible au remboursement de sa dette. Il n’y a jamais eu de pressions sur l’appelant, pas même de mise en demeure. Au contraire, il semble qu’il y avait une certaine ouverture pour l’accommoder. Il n’a donc fait aucun effort réel pour solutionner le paiement de sa dette. Dans ces circonstances, il y a eu utilisation impropre de la procédure accordée par la LFI au détriment de la créancière et de l’intérêt du public. Je suis d’avis qu’il s’agit d’un cas exceptionnel où l’annulation d’une cession est justifiée."
 In De la Durantaye (Syndic de), the Court of Appeal reiterated:
" Le juge saisi d’une demande en vertu de l’article 181 LFI jouit d’un vaste pouvoir discrétionnaire. Cette discrétion doit cependant être exercée avec prudence et seulement lorsque le débiteur n’est pas insolvable ou lorsqu’il abuse de ses droits. […] [Soulignement original]
 Les motifs retenus par le juge reposent tout d’abord sur la requête de la faillie en vertu de l’article 178.1 LFI présentée au registraire peu de temps avant sa seconde cession, laquelle requête démontre, de toute évidence selon le juge, que la libération de sa dette d’études apparaît être le seul motif de sa faillite. Or, sa conclusion est en tout point conforme à la jurisprudence qui enseigne qu’un débiteur ne saurait être admis à se débarrasser de ses dettes dans le but de frustrer ses créanciers. Voici ce que rappelle le juge Nuss dans l’arrêt Tousignant précité :
 La LFI a pour but de protéger le débiteur, le créancier ainsi que l’intérêt public, afin de s’assurer que la loi ne deviendra pas un moyen de se débarrasser de ses obligations.
 Il y a donc des distinctions à faire afin d’éviter de pénaliser un débiteur qui agirait dans le but de se refaire une santé financière et celui qui, même insolvable, n’agit que pour désavantager ses créanciers. Le professeur Albert Bohémier s’exprime ainsi à ce sujet :
On doit distinguer entre le débiteur qui a agi dans le but de trouver un remède à son état d’insolvabilité et celui qui, bien qu’insolvable, ait agi principalement dans le but de frustrer ses créanciers. On perçoit la distinction, mais elle est d’application délicate. Le tribunal doit prendre en considération les circonstances entourant la cession : le nombre de créanciers, la nature et la date des jugements rendus contre le débiteur, le caractère plus ou moins opportun de l’empressement manifesté par le débiteur dans l’exécution de sa cession.
 Comme le juge de première instance, la Cour conclut que la faillie a fait cession de ses biens dans le seul et unique but de frustrer l’intimé de sa créance, et ce, sans avoir fait au cours des ans les efforts nécessaires pour la rembourser, ce qui constitue une utilisation impropre de la procédure prévue à la LFI au détriment de l’intimé et de l’intérêt public.
 Étant donné qu’un des deux critères exigés par la jurisprudence pour annuler la faillite d’un débiteur est satisfait, la Cour ne croit pas utile de poursuivre l’analyse et de déterminer si la faillie était une personne insolvable au sens de la LFI au moment de la deuxième session. "
 Even if Cover had been found to be insolvent on August 22 and 25, 2014, the Court has nevertheless the discretion to annul the bankruptcy under circumstances such as the present ones. But, this is not the case here.
 Cover was artificially placed in a state of insolvency on those dates as a result of the scheme concocted by Guardian with the kind assistance of MNP and of its own auditors PricewaterhouseCoopers, who actively supported Guardian throughout the present proceedings and even took part in the pleadings to argue in favour of Cover’s bankruptcy.
 The circumstances surrounding the bankruptcy of Cover could not evidence a more blatant abuse of the provisions of the BIA to serve the goals of the majority shareholder (Guardian and Guardian Canada) intent on extricating itself from financial obligations contracted legitimately with the minority shareholder (Gestion) who operates the business. The majority shareholder took a serious production problem that it was previously aware of in order to concoct a virtual catastrophic scenario to justify the bankruptcy of its subsidiary (Cover).
 The Guardian Group lawyer argued that Guardian was motivated with the “protection” of Cover’s customers and their customers’ customers. With all due respect, such a proposition is not supported by the preponderant evidence. Guardian’s true goals and objectives were far different.
 In any event, if the arguments of Guardian’s lawyer are accurate and that Guardian genuinely has the interest of Cover’s customers at heart, Guardian has done so far everything in its power to make absolutely sure that Cover will never be in a position to honour its warranty in the future.
 How many automobile manufacturers facing significant production defects would still exist if they adopted the “altruistic” business philosophy of Guardian?
 The interest of justice demands that the Court exercise the discretion conferred upon it by Section 181 BIA.
 Therefore, the Court will annul the bankruptcy of Cover, who should have never found itself in such an unnecessary predicament.
 Guardian’s lawyer pointed out to the Court that in any event, as Boudreault’s employment contract was ending on December 31, 2014 and that his son Terence would not be kept on Cover’s payroll beyond that date, the bankruptcy was the only logical remedy available.
 With all due respect, the Court strongly disagrees with such a “proposal” to ultimately justify maintaining a bankruptcy that should have never taken place.
 Only time will tell the true extent of the damages sustained by Cover as a direct result of Guardian’s and Guardian Canada’s abusive use of the bankruptcy process since August 22, 2014.
 Under the present particular and most disgraceful circumstances, the bankruptcy of Cover must be annulled and Guardian as well as its subsidiary Guardian Canada shall have to assume their responsibilities and answer to Gestion, Cover’s employees, creditors and customers for their abusive behaviour and their inappropriate use of the BIA.
 On August 22nd and 25th, 2014, Cover was not insolvent; its operations were profitable as it had been since its creation in 1990 and Cover was honouring its financial obligations as they became due and was in a position to continue to do so.
 The problems generated by 2011 Production were real but nowhere near the catastrophic scenario embraced by Guardian and Guardian Canada to justify the bankruptcy of Cover. Unfortunately, the unusual problems related to the 2011 production were going to impose on Cover and its shareholders a “financial penalty” on a temporary basis in the form of reduced profits. Cover’s shareholders never had to face such a “financial penalty” in the past, having shared among themselves more than $81M in dividends since 1997. Doing business entails taking risks especially in the manufacturing world. Although not a single businessperson ever expects to face a problem that will cost money, such a possibility is not always as remote as it may seem.
 MNP’s first cash-flow, once corrected by the expert witness Filion, revealed that Cover could, in all likelihood, face and honour its obligations stemming from the 2011 Production until 2026, with obviously a reduced profitability. If for some reason additional financial is required on a punctual basis, Cover could always count on its banker Scotia Bank, which remarkably stood by its client despite the present tumultuous and uncertain period. Under such circumstances, shouldn’t Cover reasonably expect the support of its shareholders who reaped some $81M in dividends during its more profitable years?
 The remedies of the BIA are not designed to be used to enable a shareholder to dodge its financial obligations toward another shareholder to the detriment of the employees, creditors and customers of the bankrupt debtor, who all become collateral victims as a result thereof.
 Gestion has requested in its Motion to Annul that the Court orders the provisional execution of the present judgment notwithstanding appeal.
 The conduct of Guardian and of Guardian Canada following the institution of the present Motion to Annul leaves the Court with no doubt that it is in the interest of justice that such an order be made in the present case.
- The conduct of Guardian and of Guardian Canada following the Stay Order pronounced by Justice Riordan.
 As previously mentioned, on August 28, 2014, Justice Riordan ordered the stay of the bankruptcy process, pending the present proceedings to annul the bankruptcy of Cover.
 One of the main objectives of the Stay Order, if not the most important one, was to allow Cover to conduct its operations in the normal course of business. Cover and its directors were also ordered not to do anything that would be outside the company’s normal course of business.
 Guardian, faced with the Stay Order and as the principal supplier of raw material to its own company, namely Cover, chose to change its terms of payment from 30 days from the date of the invoice to cash in advance (“CIA”) (not COD (cash on delivery)). In other words, commencing on August 28, 2014, the date of the Stay Order, Guardian indicated that it would not even contemplate beginning to manufacture products required by Cover to pursue its operations unless the latter pay in advance the entire cost of any such order for glass material. Guardian lawyers argued that Cover agreed to these new and unusual terms, especially when one considers that Guardian (Guardian Canada) is to all intents and purposes the majority shareholder of Cover. Did Cover have any choice to refuse Guardian’s new requirement under the circumstances?
 This abrupt change in Guardian’s credit policy forced Cover to pay some $1,325,000 in advance to Guardian to obtain its raw material and pursue its operations. In addition to that, Guardian immediately demanded through its lawyers that Cover pay when due the last invoice of $815,000 for deliveries made before the bankruptcy (this amount was part of the Statement of affairs signed by Morrison on August 22nd (R-10)). These requirements from Cover’s principal owner created a sudden significant pressure on its cash flow.
 In order to honour its various financial obligations as they were becoming due, Guardian’s new requirements forced Cover to use its line of credit with Scotia Bank but Guardian’s lawyers also advised the bank that their client objected to Scotia Bank extending any further credit to Cover. Such instructions coming from Cover’s principal shareholder prompted Scotia Bank to freeze the unused portion of Cover’s line of credit.
 Despite the Stay Order that aimed to allow Cover to continue its operations in the normal course of business until the judgment on the present Motion to Annul, Guardian’s actions can only be characterized as blatant attempts to prevent the continuation of its own company’s normal operations and force their termination and thus the permanent closing of Cover before judgment could be rendered on the present Motion.
 This situation prompted Gestion, the minority shareholder, to file a Motion for Interim Financing that would allow it to advance to Cover $2M (the majority of these new funds being destined to Guardian in order to comply with its new CIA credit terms).
 By judgment rendered on September 23, 2014, the Motion for Interim Order was granted and the Court ordered the provisional execution of the order notwithstanding appeal (the “Interim Financing Order”).
 It must be noted that Scotia Bank also agreed to reinstate the full use of its line of credit upon Gestion’s Motion for interim financing being granted.
 Scotia Bank’s position and its sign of confidence towards Cover are in direct contradiction with the majority position adopted by the Guardian members of Cover’s Board of directors that the company was insolvent and should be bankrupted. Nobody was forcing Scotia Bank to advance further funds and take additional risks. Despite disposing of security, financial institutions do not normally like to remain financially involved in uncertain and litigious circumstances such as Cover has been experiencing since August 25, 2014.
 Guardian and Guardian Canada appealed the judgment rendered on September 23, 2014, which was their absolute right to do.
 Guardian and Guardian Canada also unsuccessfully attempted to have the Court of Appeal order the stay of execution of the Interim Financing Order pending their appeal. Again, it was their absolute right to seek such an order from the Court of Appeal.
 However, the Court cannot ignore that particular fact for the purposes hereof.
 In the present case, if Guardian and Guardian Canada had successfully obtained the stay of execution of the Interim Financing Order, Gestion would have been prevented from advancing $2M to Cover and Scotia Bank would not have extended any further credit to its client.
 Cover, who wanted to continue its normal operations under the Stay Order, would have been literally “strangled financially” by Guardian’s new CIA requirement, in particular.
 The Court can only conclude that under such circumstances Cover would have failed soon after and the present Motion to Annul would have become moot.
 Moreover, the Court understands that because of the fresh funds injected by Gestion into the company as a result of the Interim financing Order, on or about October 2, 2014, an amount of in excess of $2M was indeed paid by Cover to Guardian in compliance with the latter’s new credit requirements. Three weeks later, Guardian changed its mind and returned the entire amount to its lawyers to be held in trust pending its appeal on the Interim Financing Order.
 All actions taken by Guardian and its two designated directors, Morrison and Zoulek, show that are all intent on having Cover commit a “commercial suicide”.
 In their scenario, the interest of Cover’s creditors and customers was not first and foremost in their preoccupations.
 The Court cannot help noticing that in the MNP Report, Hamel assumed that Guardian would sell to Cover the glass necessary to replace the defective 2011 Production at arm’s length prices. This approach ensured that Cover’s replacement cost would be greater as Guardian was to make a profit out of this unfortunate and unique situation. Guardian never dispelled this assumption during the trial. Guardian never showed any signs that it wanted to assist Cover in correcting the defective 2011 Production, despite the fact that Guardian was saying that the entire production had to be replaced :
“It was assumed that both Guardian Industries Corp. and Cover have the available capacity to assume the additional production required to replace the defective Units, without having to forego another customer's current production.
It was confirmed that replaced Units will be disposed of and not recycled. Therefore, all Units have to be rebuilt entirely.
It was assumed that Guardian would continue to charge intercompany profit (at arm's length amounts) to Cover for the glass for the replacement Units. We were not provided with sufficiently detailed information in order to identify the percentage of intercompany profit that might be included in the material cost used to calculate the potential liability.”
 With all due respect, the Court seriously doubts of the good faith of Guardian, Guardian Canada and their two designated directors, Morrison and Zoulek in this matter. They have definitely not been acting to protect the rights and recourses of Cover’s creditors and customers and to ensure that Cover makes good its 15-year warranty on the IGUs.
 The Court will order the provisional execution notwithstanding appeal, knowing full well that upon the present order annulling the bankruptcy of Cover becoming final, the company’s management and directors will be at liberty to do whatever they deem fit or right, without further intervention of this Court.
 The Court must nevertheless point out that upon its bankruptcy being annulled, Cover shall be deemed to have never been bankrupted as the annulment remits Cover in its original situation before the filing of the voluntary assignment in bankruptcy on August 25, 2014. The present annulment also renders null and void the Assignment in Bankruptcy Resolution that was, in any event, adopted on August 22, 2014 in direct violation of the provisions of the 2010 Shareholders’ Agreement.
 The present situation is quite different than those contemplated by Section 181 (2) BIA, as pursuant to the Stay Order Cover’s property was never vested with the Trustee since the filing of the voluntary assignment. Other than the distant and limited monitoring authorized by the Stay Order, the Trustee has never taken possession of Cover’s assets nor did it continue its operations. Since August 25, 21014, Cover continued its operations in the normal course of business as it was intended in the Stay Order.
 In closing, the Court found the testimony of Mr. François Filion of Accuracy Canada Inc. very useful as well as his reports. Given the circumstances leading to the bankruptcy of Cover and the involvement of Guardian and Guardian Canada, the Court is of the opinion that Accuracy Canada Inc.’s fees and disbursements, totalling $101,386.72 (R-55.1) relating to Mr. Filion’s expert testimony, should be paid by Guardian and Guardian Canada solidarily as part a Gestion’s taxable costs and disbursements.
- The Motion of the Directors for Review and Directions
 In their Motion for Review and Directions, the directors Morrison and Zoulek are seeking the following conclusions:
“CONFIRM that, until a final decision is rendered in respect to the Motion to Annul the Bankruptcy of Cover, the Directors of Cover Industries Inc., including the Directors/Petitioners, are entitled to exercise all their functions and powers in accordance with the law;
ORDER James Boudreault and Terence Boudreault to provide the Directors/Petitioners with all the information and documents requested in the letter that was sent to them by the Directors/Petitioners on October 9th, 2014;
ORDER Cover, its officers, employees and representatives to fully collaborate with the Directors/Petitioners in the context of the exercise of their functions as directors of Cover Industries Inc., namely with regard to the issues raised by the Sale of non-certified IGU;
ORDER the execution of the present motion notwithstanding appeal;”
 During the trial, the Court ruled that the directors were already bound by the Stay Order until the present judgment being rendered.
 The decision on the Motion for Review and Directions was taken under advisement at the same time as the Motion to Annul.
 During the oral submissions of the lawyer for the two directors, it became obvious that the conclusions sought would become somewhat moot upon judgment being rendered on the Motion to Annul in either case. If the Court dismissed Gestion’s Motion to Annul and maintained the bankruptcy, the Trustee would take over. If the Motion was granted and the bankruptcy annulled, the directors would necessarily resume their role in Cover without the Court’s intervention.
 In closing on that particular question, the Court cannot help noticing that the somewhat lengthy directors’ Motion seemed to have two underlying goals: namely endorse as much as possible the catastrophic scenario developed by Guardian and Guardian Canada and constitute a sort of blueprint to enable, if not somewhat invite the institution of legal proceedings or even class actions against Cover.
 That feeling was reinforced when the Court was told on more than one occasion by the lawyers for the two directors as well as the lawyer for the Guardian Group, of the necessity to disclose publicly and quickly the existence of defective IGUs combined with the lack of appropriate certification; especially when Morrison suggested that he was considering placing advertisements in various newspapers across Canada in order to discharge his duty as director of Cover.
 Be that as it may, given the conclusions reached by the Court that the bankruptcy of Cover be annulled, the Court is of the opinion that it has no further jurisdiction to give directions to directors of a corporation that with the present judgment, will automatically be deemed to have never been in bankruptcy since August 25, 2014.
 Therefore, the intervention and the involvement of this Court on the issues raised by the two directors of Cover are no longer necessary or warranted. The Motion is dismissed without costs.
- The Motion of Gestion for a Confidentiality Order
 Gestion presented a first Motion of that nature and Justice Riordan rendered the following order on September 9, 2014:
"CONSIDÉRANT la Requête pour l'émission d'une ordonnance de mise sous scellé amendée;
CONSIDÉRANT que la situation décrite pourrait rencontrer les critères pour l'émission d'une telle ordonnance;
ACCUEILLE la Requête pour l'émission d'une ordonnance de mise sous scellé amendée de la requérante Gestion J&N Boudreault inc.;
ORDONNE la mise sous scellé des pièces R-6, R-7, R-10 (formulaire 78 uniquement) et du rapport d'expertise préparé par monsieur François Filion, jusqu'au jugement final sur la demande d'annulation ;
ORDONNE au Bureau du Surintendant des faillites de conserver confidentiel le bilan déposé par Industries Cover inc. le 25 août 2014, jusqu'au jugement final sur la demande d'annulation;"
 On October 24, 2014, upon the hearing being adjourned until November 10th, 2014 and in the presence in the courtroom on that afternoon for the first time of a person who identified himself as a lawyer but who preferred not to disclose the identity of his client, the Court granted Gestion’s uncontested verbal Motion to issue a General Order of Non-Disclosure and temporarily placed under seal all proceedings and exhibits until the present case is taken under advisement given the very special circumstances surrounding these proceedings, many of the allegations in the said proceedings, the nature of the dispute between two shareholders, the commercially sensitive and confidential nature of the several subjects raised in Court, including but not limited to Cover’s legal strategy in connection with the Bocenor and the Jeld-Wen lawsuits.
 Until then the trial had only been attended by representatives of the parties, their lawyers and expert witnesses. The presence of the person in question was noted by Gestion’s lawyers who asked if the gentlemen could identify himself as the exclusion of the witnesses had been ordered earlier. Upon discovering that the person was not a witness called by a party but was a lawyer who did not want to disclose the identity of his client, Gestion’s lawyers made the verbal Motion for a temporary Confidentiality Order that was granted.
 On November 10, 2014, upon resuming the hearing, the lawyer who had attended the October 24th hearing in the afternoon on behalf of an unidentified client, filed a Motion in Intervention on behalf of Jeld-Wen, who is actively involved in a product liability lawsuit against Cover.
 On November 11, 2014, when the present case was taken under advisement, the Court renewed, at the request of Gestion’s lawyer, its Confidentiality Order of October 24th, 2014 until the judgment is rendered on the present Motion to Annul.
 At the time, it was also understood that Gestion’s lawyer would provide the Court with a list of all exhibits and proceedings that in her opinion, should be kept under seal after the judgment is rendered on the Motion to Annul. The Court also agreed to hear the representations of the parties and more particularly, those of Jeld-Wen’s lawyers on the confidentiality issue before the present judgment is rendered.
 The hearing on Gestion’s Amended Motion for a permanent Order of Confidentiality took place on December 12, 2014.
 At the outset, the lawyer for Gestion mentioned that her client did not expect that any of the proceedings and the plans of arguments submitted by the lawyers during their pleadings should remain under seal any longer.
 The Motion had to objectives:
- the testimony of Mtre Jacques Larochelle, the lawyer representing Cover in the Bocenor and Jeld-Wen lawsuits and a portion of Mr. Michael Morrison’s testimony, both delivered in closed session (huis clos) as the subjects discussed were subject to the solicitor-client privilege of confidentiality; and
- certain exhibits consisting of :
§ financial statements of Cover: R-7, R-25, R-26, R-27, R-28, R-29, R-30;
§ Cover’s internal financial production reports and cash flows: R-34 (also filed as RD-25), R-46, D-27 to D-34, D-45;
§ Cover’s lists of clients with addresses and quantities purchased: R-10 (Form 78 only), R-10A (original of R-10 - Form 78 only), R-47;
§ experts’ reports: RD-20 (also filed as R-6) MNP Report 2014-08-21; R-54 (Accuracy 2014-08-27) and R-55 (Annex 1 to R-54); R-58 (PowerPoint presentation of Accuracy’s expert report (R-54)); D-25 (MNP Report 2014-10-06) (also filed as RD-3) and annexes D-25.2, D-25.3 and D-25.4; D-26 (Mr. Stephen Howes Report) (also filed as RD-2);
§ emails and attachments (reports) concerning the IGUs’ productions: D-5 (also filed as RD-7), D-7(also filed as RD-8), D-10(also filed as RD-10), D-12, D-20 (also filed as RD-15), D-39 (also filed as RD-22), D-42(also filed as RD-9), D-47, RD-4, RD-5, RD-6;
§ emails exchanged with Mtre Jacques Larochelle concerning the Bocenor and the Jeld-Wen lawsuits (R-41);
§ due diligence reports on the 2011 Production, as well as tax accounting and environmental issues: D-13 (also filed as RD-13);
§ third-party evaluations of IGUs: D-35 and D-36, RD-1 (also filed as D-19);
§ personal notes taken by Mr. Terence Boudreault at the August 22nd, 2014 special meeting of the Board (R-35).
 Save and except for exhibit R-35 consisting of personal notes taken by Mr. Terence Boudreault at the special meeting of the Board on August 22, 2014, which should not be considered to be kept confidential and placed under seal, all other documents that Gestion is asking to place permanently under seal after the present judgment is rendered relate directly, in one form or another, to Cover’s financial information and internal information about its production of IGUs (the latter point being mostly related to the 2011 Production).
 The testimony of Mtre Jacques Larochelle and a portion of Mr. Michael Morrison’s testimony were heard in closed session (huis-clos) on a confidential basis.
 Mtre Larochelle, the lawyer representing Cover in the Bocenor and the Jeld-Wen lawsuits, was called by Gestion to testify about his written and oral communications with Cover and Guardian concerning his two mandates and the legal opinions that he gave to his client in connection with those two lawsuits.
 The Court understands that at all relevant times, Mtre Larochelle’s services were retained by Cover to represent the latter in the two lawsuits in question but that Guardian’s in-house law department was monitoring the lawsuits and Mtre Larochelle was reporting to them and was receiving his instructions from them.
 The Court also understands that Mtre Larochelle’s testimony was deemed by Gestion to be necessary, if not essential in light of the allegations made by Guardian and Guardian Canada, as well as their expert MNP who took the position in its second report that Cover was liable for the full amount of both lawsuits in question.
 Given the privileged and confidential nature of Mtre Larochelle’s testimony, Gestion requested that such testimony be given in a closed session (huis-clos) and be treated as confidential as Cover’s lawyer, Mtre Larochelle, was still bound by his professional secrecy duty towards his client who never relieved him from the same.
 The Court granted Gestion’s verbal motion and Mtre Larochelle testified in a closed session (huis clos) and his testimony has since then been treated on a confidential basis and was placed under seal until now.
 The Court finds that the content of Mtre Larochelle’s testimony falls under the professional duty of secrecy that binds the lawyer to his client Cover, who did not waive its privilege.
 The same process was followed for Mr. Michael Morrison who testified in closed session (huis clos) for a short while on discussions the witness had about those lawsuits. It turned out that during his very short testimony on the subject, Mr. Morrison’s conversation about the lawsuits did not involve Mtre Jacques Larochelle but rather Guardian’s in-house counsel, Mr. Kyle Krywko.
 With all due respect, the Court does not believe that the latter testimony was protected by duty of confidentiality that binds the exchanges between Cover and its lawyer. We have here discussions between two fellow employees that did not even relate to any information exchanged with or any opinion given by Mtre Jacques Larochelle in connection with those lawsuits.
 The Confidentiality Order made with respect to Mr. Michael Morrison’s testimony given in closed session (huis clos) is lifted.
 Mtre Mark Bantey, who represents the interests of Jeld-Wen, objected to Gestion’s position as in his view Cover implicitly waived its privilege by allowing Mtre Larochelle to testify.
 With all due respect, the Court disagrees. The testimony of Mtre Larochelle must be considered in the very particular, if not very special context of the present proceedings.
 Cover was not an active participant in these proceedings.
 The Court has already concluded that Cover should have never been put in bankruptcy and that the latter should be annulled.
 Cover’s bankruptcy was provoked by a majority shareholder in the context of its conflict with a minority shareholder. Setting aside the vote of the two directors designated by Guardian and Guardian Canada, who were instructed by the latters to adopt the Assignment in Bankruptcy Resolution despite the objections of the third director who had a right of veto, Cover never intended to file for a voluntary assignment in bankruptcy and did not seek to find itself in the middle of the present litigation where its very survival is at stake.
 The minority shareholder Gestion was obliged to take the present proceedings and to present in particular confidential internal financial and legal evidence to counter the Guardian Group’s reasons invoked to justify their decision to have Cover file for bankruptcy. The Bocenor and Jeld-Wen lawsuits became part of the majority shareholder’s justifications and had to be addressed by Gestion in order to counter the evidence offered by the Guardian Group and its expert MNP.
 The particular context of the present affair leads the Court to conclude that Cover never waived its privilege and never consented to Mtre Larochelle’s testimony and his written communications in connection with the two lawsuits (R-41) be rendered public, especially since Cover is actively contesting the Jeld-Wen lawsuit with Mtre Larochelle.
 It was argued that as the lawyer for the Guardian Group did not object to Mtre Larochelle’s testimony and did not insist on his testimony being delivered in closed session (huis clos), it necessarily implied a form of consent coming from the majority and controlling shareholder of Cover.
 The Court disagrees with such a proposition. The evidence shows with great eloquence that the Guardian Group’s main objective is that Cover remains in bankruptcy at all costs. This goal lead to the Guardian Group and their lawyers to conveniently make surprising admissions regarding Cover’s contingent liabilities that normally shareholders, having the interest of the corporation at heart, would never make. The Guardian Group’s position with respect to the Jeld-Wen lawsuit was contradicted by Cover’s own actions and its lawyer, Mtre Larochelle.
 Whatever strategic decisions may have been made by the Guardian Group in the present case, the Court does not conclude that they evidenced Cover’s waiver of its solicitor-client privilege with its lawyer, Mtre Larochelle.
 The Court cannot ignore neither the reality that Jeld-Wen has a very special interest in the present matter. Jeld-Wen is not simply a member of the general public who should have access to that information indiscriminately.
 Jeld-Wen has instituted a $4,621,900 lawsuit against Cover in product liability and that lawsuit is still on-going. A lawsuit that it is being defended actively by Cover. Jeld-Wen’s particular interest in the testimony of Mtre Larochelle, who was conducted in closed session (huis clos) and in the written exchanges between Mtre Larochelle and his client in the specific context these lawsuits (R-41), is obvious given the nature of the subjects that were discussed.
 Without disclosing anything more than is absolutely necessary for the purposes hereof, the testimony and written communications of Mtre Larochelle satisfy the Court that, prima facie, Cover is defending its rights in good faith.
 Cover was involuntarily propelled into the present litigation mainly as a collateral victim of a conflict between shareholders.
 In order for Gestion to seek the annulment of Cover’s “involuntary” bankruptcy, the very nature of the evidence dictated by the Guardian Group’s position left Gestion with little choices: either give up and leave Cover bankrupted or contest the bankruptcy process triggered by Guardian Canada and Guardian. The latter choice involved the necessary disclosure of Cover’s internal financial, operational and production information to establish that it was solvent at all relevant times, as well as information related to the two lawsuits invoked by the Guardian Group that are still contingent claims.
 The issuance of an Order of Confidentiality with respect to evidence and exhibits would have been entirely moot had the Court decided that Cover’s bankruptcy should not be annulled. Maintaining the bankruptcy would have rendered this information and these documents of very little use, if any.
 The present debate takes its full dimension upon Cover’s bankruptcy being annulled.
 Cover is still “alive” and the Jeld-Wen lawsuit is still going on.
 As Cover is now deemed to have never been in bankruptcy pursuant to the present judgment, Cover has an obvious commercial interest to remain in business.
 Jeld-Wen could obtain a strategic advantage if it could have access to all the internal confidential information and data produced at the hearing on the Motion to Annul. Getting access to the transcript of Mtre Larochelle’s testimony could turn out to be a “bonus” as well for Jeld-Wen. Knowing what opinion the opponent’s lawyer gave to its client and what strategy he discussed in connection with Jeld-Wen’s lawsuit could confer an advantage to Jeld-Wen.
 Jeld-Wen is an important manufacturer of doors and windows who is plaintiff in a $4.7M lawsuit instituted against Cover based on issues that may be similar to the ones that were considered in the course of this trial. Over and above the lawsuit in question, Jeld-Wen could also draw a commercial benefit from its providential access to Cover’s internal and confidential business information.
 Jeld-Wen is understandably extremely interested to gain free access to Cover’s financial information, any information related to its manufacturing process as well as the information shared by Cover’s lawyer with the Court about the Bocenor and the Jeld-Wen’s lawsuits.
 Jeld-Wen is attempting to take advantage of Cover’s predicament to gain an unfair advantage at Cover’s commercial prejudice, whether in a lawsuit involving the very same parties or otherwise. Let us just think of, among other things, Cover’s entire client list with not only the coordinates of each client but the type of products purchased and the applicable quantities as well.
 The general rule is that court proceedings are public. Curtailing the right of the public to have access to all aspects of a court record (proceedings, exhibits and testimonies) constitutes an exception.
 In the present case, given the very special circumstances in virtue of which Cover found itself in the middle of a public and bitter conflict between its only two shareholders, there is no doubt in the Court’s mind that exposing to the public the information contained in Mtre Larochelle’s testimony and in the various exhibits specifically identified by Gestion in the present Motion would pose a threat to Cover’s commercial interest; a real, serious and substantial threat.
 The risks that Cover’s commercial interest would face should the present Motion not be granted are real, very real, in the Court’s opinion.
 It would be absolutely ironic, if not ludicrous, if Gestion’s legitimate and successful attempt to bring Cover out of its bankruptcy via legal proceedings would afterwards become the cause for its commercial demise because the numerous commercially sensitive and confidential documentation and information that were necessarily disclosed in Court in order to have reasonable chances of convincing a judge that the bankruptcy should be annulled, become public.
 In the Court’s opinion, the salutary effects of the Confidentiality Order to be rendered in the present matter far outweigh its deleterious effects. The conditions precedent that give the Court judicial discretion to make such an order are present in this case.
 The intervention of the Court in this matter is warranted to ensure that Cover’s commercial interest is reasonably preserved.
 FOR THOSE REASONS, THE COURT:
 GRANTS the Motion of Petitioner, Gestion J&N Boudreault Inc., to annul the bankruptcy to Industries Cover Inc.;
 ANNULS the bankruptcy of Industries Cover Inc. resulting from the filing of a voluntary assignment in bankruptcy on August 25th, 2014;
 DECLARES that in light of the Stay Order rendered by Mr. Justice Brian Riordan on August 28, 2014, the Trustee, PricewaterhouseCoopers Inc., was never vested in the property of Industries Cover Inc.;
 DECLARES that Industries Cover Inc. was not an insolvent person on August 22, 2014 and on August 25, 2014 within the meaning of Section 2 of the Bankruptcy and Insolvency Act;
 DECLARES that the Assignment in Bankruptcy Resolution adopted on August 22, 2014 (R-10) by a majority of the Directors of Industries Cover Inc. is null and void as it was voted in a context where Industries Cover Inc. was not insolvent and in violation of the provisions of the Shareholders’ Agreement dated March 16, 2010 (R-3) with the third director, Mr. James Boudreault, voting against it;
 DECLARES that as a result of the present judgment, Industries Cover Inc. is deemed to have never been in bankruptcy since August 25, 2014;
 ORDERS the provisional execution of the present judgment notwithstanding appeal;
 Given the annulment of the bankruptcy of Industries Cover Inc., DISMISSES without costs the amended Motion of the Directors, Mr. Michael Morrison and Mr. Richard Zoulek, for review and directions;
 GRANTS in part the Motion of Gestion J&N Boudreault Inc. for the issuance of an order of confidentiality;
 ORDERS that the testimony of Mtre Jacques Larochelle made in a closed session of the Court (huis clos) on October 21st, 2014 from 10:01 to 10:45, together with Exhibit R-41 filed by the witness, are and shall remain confidential and be placed and kept under seal in the records of the Superior Court of Quebec and that the testimony and Exhibit R-41 not be obtained, disclosed, copied, duplicated, published or disseminated, in whole or in part, directly or indirectly, without the prior authorization of this Court, subject however to the right of the parties to retrieve Exhibit R-41 pursuant to article 331.9 C.P.C.;
 ORDERS that the following additional Exhibits are and shall remain confidential and be placed and kept under seal in the records of the Superior Court of Quebec and that they may not be obtained, disclosed, copied, duplicated, published or disseminated, in whole or in part, directly or indirectly, without the prior authorization of this Court, subject however to the right of the parties to retrieve the following Exhibits pursuant to article 331.9 C.P.C.:
- Exhibits filed by Gestion J&N Boudreault Inc. (R) and the Directors, Mr. Michael Morrison and Mr. Richard Zoulek (RD):
R-6 (also filed as RD-20), R-7, R-10 (Form 78 only), R-10A (original of R-10 - Form 78 only), R-25, R-26, R-27, R-28, R-29, R-30, R-34 (also filed as RD-25), R-46, R-47, R-54, R-55 and R-58; and
- Exhibits filed by Guardian Industries Canada Corp. and Guardian Industries Corp. (D) and the Directors, Mr. Michael Morrison and Mr. Richard Zoulek (RD):
D-5 (also filed as RD-7), D-7 (also filed as RD-8), D-10 (also filed as RD-10), D-12, D-19 (also filed as RD-1), D-13 (also filed as RD-13), D-20 (also filed as RD-15), D-25 (also filed as RD-3) with annexes D-25.2, D-25.3 and D-25.4, D-26 (also filed as RD-2), D-27, D-28, D-29, D-30, D-31, D-32, D-33, D-34, D-35, D-36, D-39 (also filed as RD-22), D-42 (also filed as RD-9), D-45 and D-47;
- Exhibits filed by the Directors, Mr. Michael Morrison and Mr. Richard Zoulek (RD):
RD-4, RD-5 and RD-6;
 ORDERS the Office of the Superior Court of Quebec to deny access to the testimony of Mtre Jacques Larochelle and to all aforementioned Exhibits to the public;
 ORDERS the Office of the Superintendent of Bankruptcy Canada to keep confidential and under seal the Statement of affairs of Cover dated August 22, 2014 and signed by Mr. Michael Morrison (R-10A);
 THE WHOLE with costs payable solidarily by Guardian Industries Canada Corp. and Guardian Industries Corp. to Gestion J&N Boudreault Inc. including Accuracy Canada Inc.'s fees and disbursements totalling $101,386.72 (R-55.1) relating to Mr. Filion's expert testimony.
MICHEL A. PINSONNAULT, J.S.C.
Mtre William Noonan
Gestion Hickson Noonan inc.
Mtre Suzanne Gagné
Mtre Mihnea Bantoiu
Létourneau et Gagné
Attorneys for Petitioner
Gestion J&N Boudreault Inc.
Mtre Bertrand Giroux
Attorneys for the Trustee, PricewaterhouseCoopers Inc.
Mtre Yves Robillard
Mtre Stephan H. Trihey
Miller Thomson s.e.n.c.r.l.
Attorneys for Respondents
Guardian Industries Canada Corp. and Guardian Industries Corp.
Mtre Mason Poplaw
Mc Carthy Tétrault s.e.n.c.r.l
Attorneys for the Directors/Petitioners
Mr. Michael Morrison and Mr. Richard Zoulek
Mtre Gordon Levine
Mtre Catlin Cszymberski
Mtre Jeremy Cutler
Kugler, Kandestin s.e.n.c.r.l
Attorneys for the Bank of Nova Scotia
Mtre Mark Bantey
Mtre Steven Nguyen
Gowling Lafleur Henderson
Attorneys for Jeld-Wen du Canada Ltée
Dates of hearing:
October 21, 22, 23, 24, November 10, 11 and December 12, 2014
 "PERMET à Industries Cover inc. de continuer à exploiter son entreprise normalement, sous la surveillance du syndic-intimé et de l'observateur;
INTERDIT à Industries Cover inc. et à ses dirigeants de conclure toute opération hors du cours normal des affaires;"
 Paragraph 28 of the Amended Contestation of the Motion to cancel the bankruptcy of Cover.
 Jeremy Wong Capex Report, page 1 (R-18).
 Moss (Re), 1999 CanLII 14182 (MB QB), par. 31.
 1375. The parties shall conduct themselves in good faith both at the time the obligation is created and at the time it is performed or extinguished.
 Guardian would purchase 14% of additional equity in Cover to prepare for a potential amalgamation of GICC and Cover in the future which would result in a new entity ("Amalco"). By amalgamating GICC and Cover, Amalco could utilize the existing Net Operating Loss (NOL) asset held by GICC today against Cover profits. The potential amalgamation will not occur in fiscal year 2013, and will be under review again in 2014.
As Guardian is obligated to purchase the remaining equity held by Boudreault Inc at the end of James Boudreault's employment contract, Guardian has decided to break up that purchase and to purchase 14% prior to the amalgamation.
 Tousignant v. Banque de Nouvelle-Écosse, 2001 CanLII 7118 (QCCA).
 Houlden, Morawetz & Sarra, The 2014-2015 Annotated Bankruptcy and Insolvency Act, D§68, Page 197; Re Regional Steel Works (Ottawa - 1987) Inc. (1994), 25 C.B.R. (3d) 135 (Ont. Gen. Div.).
 MNP Report (R-6) page 12.
 “It was assumed that the amount (sic) claimed in the lawsuit/judgments were representative of the amounts that would have to be paid by Cover”, MNP second Report (D-25) page 11.
 “I would expect almost all of the Cover IG units to fail during the warranty period because the labor methods and workmanship are consistently very poor. I would expect 80 to 90% of all of the Cover insulating glass units to fail that have been manufactured in this manner.” (Howes Report (D-26) page 5).
 (b) who has ceased paying his current obligations in the ordinary course of business as they generally become due.
 (a) who is for any reason unable to meet his obligations as they generally become due.
 Re King Petroleum Ltd. (1978), 29 C.B.R. (N.S.) 76 (Ont. S.C.), par. 9.
 (c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due.
  3 S.C.R. 443.
 1999 CanLII 15003 (ON SC).
 2004 MBQB 71.
 Garceau (Syndic de), 2006 QCCS 859, par. 48.
 J.E. 97-1915 (C.S.); see to the same effect Villeneuve v. Villeneuve, 2007 QCCS 4468 at par. 31 and 32.
 Grobstein c. Royal Bank of Canada,  B.R. 562.
 In re Robenhymer, J.E. 97-1914 (C.S.).
 In re Bonneau, J.E. 97-1915 (C.S.).
 In re Tousignant, J.E. 2001-488 (C.A.).
 1999 CanLII 14182 (MB QB).
 2001 CanLII 7118 (QC CA).
 2011 QCCA 1093.
 Villeneuve c. Villeneuve, 2007 QCCS 4468.
 MNP Report (R-6), page 7.
 Sierra Club of Canada v. Canada (Minister of Finance),  2 S.C.R. 522, 2002 SCC.