BlueRush: sold without a sales process, and why that was allowed

BDC Capital Inc. was owed approximately $2.6 million by BlueRush. It had general security agreements giving it the right to apply for a receiver on default, it made written demand, it served a notice of intention to enforce security under s. 244 of the BIA, and it entered into a forbearance agreement under which the debtors consented in advance to the immediate appointment of a receiver on expiry of the forbearance period.

The period expired. The debtors did not repay. MSI Spergel Inc. was appointed receiver on December 29, 2025, per Endorsement of Justice Steele, December 29, 2025, para. 4.

Six months later the business was sold to Kaltura Inc. There was never a sale process.

The appointment, and a lighter burden

Justice Steele's December endorsement is a compact statement of the modern position on when a receivership is "extraordinary".

The test under s. 101 of the Courts of Justice Act and s. 243(1) of the BIA is whether it is just or convenient, considering all the circumstances and "in particular the nature of the property and the rights and interests of all relevant parties" (Nova Scotia v. Freure Village on Clair Creek), with the discretionary factors summarised in C&K Mortgage et al v. 11282751 Canada Inc., 2024 ONSC 1039, per Endorsement, December 29, 2025, paras. 6–7.

Then the qualification that decides most such applications:

Where the rights of the secured creditor include, pursuant to the terms of its security, the right to seek the appointment of a receiver, the burden on the applicant is lessened: while the appointment of a receiver is generally an extraordinary equitable remedy, the courts do not so regard the nature of the remedy where the relevant security permits the appointment and as a result, the applicant is merely seeking to enforce a term of an agreement already made by both parties.

That is Osborne J. in Metropolitan Partners Group Administration, LLC v. International Credit Experts Inc., 2024 ONSC 4601, affirming Elleway Acquisitions Ltd. v. Cruise Professionals Ltd., 2013 ONSC 6866, quoted at Endorsement, December 29, 2025, para. 9.

Here the burden was lighter still: the debtors had not merely granted security permitting an appointment, they had consented to it in a forbearance agreement.

Two details from that endorsement are worth carrying forward.

What BDC actually knew about the collateral. "BDC understands that the assets are predominantly intellectual property; however, BDC requires the receiver to, among other things, assess the business and the assets", per Endorsement, December 29, 2025, para. 7. A lender enforcing over a software business is often enforcing over something it cannot itself value, and part of what a receiver is for is to find out what is there.

The one change to the model order. The order was similar in all material respects to the Commercial List model, with a single material change: the inclusion of the power to bankrupt the debtors, at section 3(r), per Endorsement, December 29, 2025, para. 10 and Receivership Order, December 29, 2025.

There is also a small housekeeping item that anyone who has ever issued an application will appreciate. A typographical error in the style of cause was noticed on December 23, 2025: "Digital" had been spelled "Digitial" in the original application. An amended application was served the next day, and the court confirmed its jurisdiction to correct the name of a party under Rule 5.04(2), per Endorsement, December 29, 2025, para. 11.

The sale, and the process that never happened

On June 5, 2026 the receiver sought approval of a transaction with Kaltura Inc. and an approval and vesting order, plus an ancillary order sealing the confidential appendices to its reports, approving the reports and its activities, and approving fees.

BDC — described in the endorsement as the fulcrum creditor — supported the transaction. No one opposed, per Endorsement of Justice Steele, June 5, 2026, paras. 1, 3–4.

The framework is Royal Bank of Canada v. Soundair Corp.: whether the receiver made sufficient effort to obtain the best price and did not act improvidently; the efficacy and integrity of the process by which offers were obtained; whether the interests of all parties were considered; and whether there was unfairness in the working out of the process — with the court to accept the receiver's recommendation in all but exceptional circumstances, per Endorsement, June 5, 2026, para. 6.