This article was written in collaboration with Caleb Veisman, Articling Student.
By way of an oral decision on November 21, 2025, the Court of King’s Bench of Alberta (Simard J.) allowed an application by the trustee in bankruptcy of Wolverine Energy and Infrastructure Inc (“WEI”) to recover certain payments as reviewable transactions and, importantly, to pierce the corporate veils of two corporations that received those payments on an authorized agency theory, thereby holding individuals personally liable.
Proceeding: In the Matter of the Bankruptcy of Wolverine Energy and Infrastructure Inc. (Action No. B301-191521) and related files (collectively, “Wolverine”). Re Wolverine Energy and Infrastructure Inc (Bankrupt), Action No B301-191521 (Alta KB, 21 November 2025) (oral reasons, unreported).
1. Background of Wolverine
The trustee sought to recover payments made by WEI to Wolverine Management Services Inc. (“WMSI”) and 1586329 Alberta Ltd. (“158”). Additionally, the trustee asked the Court to hold Jesse Douglas (“Douglas”) personally liable for those amounts by piercing the corporate veils of WMSI and/ or 158.
The oral reasoning reflects that the trustee advanced multiple legal bases for recovery, framing the impugned payments as vulnerable on several distinct, but overlapping grounds.
The trustee relied on the preference provisions under section 95 Bankruptcy and Insolvency, and the transfer at undervalue provisions under section 96. Furthermore, the trustee invoked provincial statutory relief, such as the Fraudulent Preferences Act (Alberta) as well as claims founded upon the Statute of Elizabeth. The Trustee also pled unjust enrichment as in the alternative.
2. Evidence and Procedure
The application was decided entirely on a written record. There was no live testimony and no cross-examinations. Instead, Justice Simard was asked to determine the matter based on affidavit evidence filed by both sides.
The trustee relied primarily on its First Report, filed August 29, 2025, together with affidavits appended to it. Most notably, this included an affidavit from Russell French, an officer of Fiera Private Debt Fund, dated November 30, 2023, which had originally been sworn in earlier insolvency proceedings involving the Wolverine Group.
The respondents filed two affidavits in response, both sworn October 28, 2025. One from Nikolaus Kiefer, WEI’s former CFO, and the other from Jesse Douglas.
Before turning to the substance, the Court had to resolve an evidentiary skirmish. The respondents objected to the trustee’s reliance on the French affidavit, arguing first that doing so breached the implied undertaking rule, and second that the affidavit was effectively insulated from cross-examination because it had been attached to the trustee’s report.
Justice Simard rejected both arguments. He held that the implied undertaking rule applies to evidence obtained through discovery or cross-examination, not to affidavits filed in court proceedings. Because the French affidavit had been filed in prior insolvency proceedings, not obtained through discovery, the rule did not apply.
The Court also rejected the suggestion that the affidavit was “immunized” from challenge. The respondents had a prima facie right under Rule 6.7 to cross-examine on it but chose not to do so. Having elected to proceed without cross-examination, they could not later argue that the affidavit was procedurally untouchable.
With that, the Court proceeded to decide the application on the written record alone.
3. Applying the Chevron Veil-piercing Framework
Relying on Yaiguaje v. Chevron Corporation, 2018 ONCA (CanLII) (“Chevron”) the Court began from the settled principle that corporate separateness is the rule, and piercing the corporate veil is the exception. Moreover, Courts will not disregard the corporate form simply because doing so would produce a fairer or more convenient outcome. Following the framework set out in Chevron, the Court approached the issue within the three established categories where veil-piercing may be justified. First, where it is necessary to construe a statute, contract, or other document, looking past the corporate veil may be required to give effect to the instrument’s ‘true’ meaning.
Second, is where the corporation is evidenced to be a ‘mere façade’ incorporated to obscure true facts and inoculate against enforcement, (often the most frequently argued pathway in veil-piercing cases). However, the evidence must demonstrate more than common ownership or control. Typically, it can be categorized abuse of the corporate form to hide wrongdoing.
Third, where the corporation acts as an authorized agent of its controllers or members, the question is whether the corporation was representing the individual in a way that legally affected that individual’s position. Simply put, if the corporation had authority to receive payments or enter into transactions on the individual’s behalf, and those acts altered the individual’s rights or liabilities, an agency relationship may be established and may support piercing the corporate veil.
(a) “Mere façade” Claim Rejected
The Court declined to pierce the veil on a façade/sham/alter ego basis because the evidence before it (from Kiefer and Douglas) was that WMSI and 158 were incorporated for legitimate business reasons, and that evidence was uncontradicted. The Court therefore found it could not conclude they were incorporated for a fraudulent/improper purpose or used as a shell for improper activity.
In reaching this conclusion, the Court reiterated that sole ownership and control of themselves are insufficient to find a mere façade. There was no evidence on the record to support the finding that the corporate form was being used to hide true facts or to commit any wrongdoing.
(b) Authorized Agency Theory Accepted
The Court emphasized that agency is distinct from sham/alter ego concepts, and quoted an Ontario Court of Appeal definition of agency (with a pinpoint provided in the transcript):
“Agency is the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position by the making of contracts or the disposition of property.”
— 1196303 Ontario Inc. (ONCA), 2015 ONCA 580 at para 69
The Court then used that definition to enquire into whether WMSI and 158 operated to legally bind Douglas. In doing so, applying that definition, the Court engaged in an exercise to determine whether the corporations were acting in a representative capacity that caused the payments to change Douglas.
Key factual findings supporting agency (as stated by the Court):
The Court found that, in practice, WEI and Douglas treated WMSI and 158 as receiving agents with authority to accept payments that would discharge not only corporate claims but also claims owed to Douglas personally. The evidence showed that payments, which totaled $1,011,950.00, made to corporations were not viewed as confined to the corporations’ own separate entitlements. Rather, they were treated as satisfying obligations within a broader financial relationship that included Douglas himself.
This was reflected in WEI’s internal accounting. Through reconciliation and netting across multiple shareholder loan accounts, including Douglas’s personal account, WEI effectively treated the corporation and Douglas as part of a single ledger. In doing so, it “ignored the separate legal existence” of Douglas and the corporations, supporting the conclusion that payments to WMSI or158 were understood to affect Douglas personally.
The consequence was that WMSI and 158 were ordered to disgorge the funds they had received, while Douglas was personally liable for those disbursements via veil-piercing under the alter ego doctrine via the authorized agency avenue.
The consequence was that WMSI and 158 were ordered to disgorge the funds they had received, while Douglas was personally liable for those disbursements via veil-piercing under the alter ego doctrine via the authorized agency avenue.
Ontario and Practical Implications
For Ontario practitioners, the core point remains straightforward. Corporate separateness will be respected so long as its protections are respected. Unpacking that Catch-22, veil-piercing in Ontario continues to operate under the framework articulated in Chevron, alongside the federal Bankruptcy and Insolvency Act, and comparable provincial fraudulent preference and conveyance legislation, such as the Fraudulent Conveyances Act (Ontario), the Assignments and Preferences Act (Ontario), to those engaged in Wolverine.
Although this is not a doctrinally significant development, Wolverine demonstrates how the Chevron framework operates in practice. The decision provides an analogous and relatively uncommon example of how veil-piercing is permitted where the corporation’s role is that of an agent whose receipt of funds legally affects its principal, rather than the more commonly utilized ‘façade’ ground.
Using management companies to receive compensation or shareholder loan repayments is common and entirely lawful. Difficulties arise where evidence demonstrates that payments to a corporation were, in substance, intended to satisfy the individual’s personal entitlements.
In insolvency situations, this characterization can have significant effects. If that payment is subject to later challenge as a preference or a transfer at undervalue under the Bankruptcy and Insolvency Act, or its provincial counterparts, that person will not be protected by the arm’s length status of a separate corporation into which the funds flowed.
Authorities
- Yaiguaje v Chevron Corporation, 2018 ONCA 472 (CanLII).
- Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co., 1997 CarswellOnt 3496, [1997] O.J. No. 3754 (Ont. C.A.).
- 1196303 Ontario Inc. v Glen Grove Suites Inc., 2015 ONCA 580 at para 69 (CanLII).
- Jessica Cameron, Jennifer L. Caruso & Tiffany Bennett, “Beyond the Veil: Alberta Court Pierces Corporate Veil on the Basis of Authorized Agency” (16 December 2025), Insolvency & Restructuring Bulletin (Fasken), online: Fasken.
The authors wish to thank Jennifer L. Caruso for her guidance in connection with this article and acknowledge the contributions of Jessica Cameron and Tiffany Bennett in the preparation of an original reporting article of this case.