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    Can a Secured Debtor Retain A Business’ Goodwill?

    I was recently involved in an interesting case in which I obtained a receivership order for a secured creditor of an insolvent dentist.

    This case involved two interesting issues. The first was the need to have the Royal College of Dental Surgeons involved to ensure the protection of the patient’s private health information. The second issue involved balancing the secured creditor’s right to maintain the value of the goodwill of the dentist’s practice with the patient’s right to choose the dentist he/she wanted.

    The dentist felt entitled to offer his services to his existing patients at a new location, while the secured creditor felt that the dentist soliciting his patients would reduce the value of the goodwill in the practice, which was part of their collateral.

    While this case resulted in an amicable settlement, the question remains. By allowing debtors to use the goodwill associated with the business, will it be more difficult for them to get financing?

    The content on this website is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please contact our office at 613-563-7544 and one of our lawyers will be happy to assist you.

    Posted By: Robert J. De Toni of Merovitz Potechin LLP

    Partner

    Robert De Toni is known for his ability to cut straight to the heart of an issue and achieve cost-effective results. Robert has been successfully advising clients on commercial and civil litigation, insolvency and collections, estate litigation and employment law disputes since 1996. Whether representing major financial institutions or individuals on high-stakes, high pressure litigation and disputes, Robert consistently offers clients effective, prompt and practical solutions.

    A dedicated father who snowboards and rides motorcycles, Robert was instrumental in establishing the popular Ontario Bar Association’s Young Lawyers’ Ottawa elementary school mock trial program.

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