All the Single Debtors: Court Refuses to Expand Exceptions to the Single Debtor Rule Under Doctrine of Marshalling | Knowledge

In the recent decision of Griffon Partners Operation Corp (Re), 2024 ABKB 277 [Griffon] the Court of King’s Bench of Alberta (the “Court”) considered the applicability of the doctrine of marshalling. The case involved a debtor indebted to both senior and subordinate creditors, with an affiliated entity granting a guarantee and share security solely to the Senior Creditors (defined below). The subordinate creditor, Tamarack Valley Energy Ltd. (“Tamarack”), sought to use marshalling to compel the Senior Creditors to exhaust their recourse under such affiliate guarantee and share security before realizing on the proceeds of their shared security. This order of realization would result in sufficient funds to…