TCT Logistics creditor appeal heard by court

TORONTO, (May 7, 2004) — The two-year court battle between a group of carriers and the receiver of bankrupted TCT Logistics of Calgary entered its final round this week.

On May 5 and 6, a three-member panel of the Ontario Court of Appeal heard arguments from secured creditor GMAC Commercial Credit Corporation-Canada and receivers KPMG Inc., which were appealing an earlier court decision requiring that funds paid by shippers to TCT Logistics for transportation services were trust monies and therefore payable to the carriers and not subject to claims by creditors of the bankrupt TCT.

Ontario’s Truck Transportation Act (O. Reg. 556/92) requires companies that broker loads to keep the portion of the payment owed to the carrier in a trust account, ruled Madame Justice Greer in August 2002. Therefore KPMG must release funds, believed to be $3.7 million, to a group of about two dozen Ontario carriers.

A panel composed of Justices David Doherty, John Laskin, and Kathryn Feldman heard arguments from all sides over the two-day hearing, and reserved its ruling.

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