Couple tried to get B.C. court to forgive $25M debt tied to 'morally unacceptable' actions
An appeal for a B.C. court to forgive a whopping $25 million in debt has been dismissed, with the judges ruling the case has "no merit" in any of the grounds suggested by the couple behind the appeal.
A recently posted ruling, dated Sept. 24, outlined the couple's argument for an appeal, following a decision in B.C. Supreme Court to refuse to give the couple a "fresh start."
According to a transcript of the judgment from the appellate court, Thalbinder Singh Poonian and Shailu Poonian applied for bankruptcy in 2018. At that point, they had few assets, and had accumulated a debt of $25 million.
The debt was owed largely to the B.C. Securities Commission. According to the BCSC, the couple was ordered to pay a combined $13.5 million in administrative penalties for committing what the commission described as "market manipulation," and another $5.5 million "disgorgement of their ill-gotten gains."
The Supreme Court summarized what the BCSC found as "the Poonians pumped up the price of the shares of a publicly traded company and then offloaded those shares at inflated prices to unsophisticated investors with financial problems."
Those investors lost about $7 million in total between October and December of 2009, and the BCSC found Thalbinder the "mastermind" of the scheme, the Court of Appeal judges said.
The couple decided to take the case to court in an attempt to be discharged from the debts they'd incurred through the BCSC ruling.
But the court ruled in March of this year against their bankruptcy case, stating in part, "The Poonians' actions were morally unacceptable and harmful to society, such that they should not be rewarded with a release of those debts."
Again, the Poonians went to court, appealing the decision by the Supreme Court.
Again, they argued they were "honest but unfortunate," and that's how they found themselves in such debt – a claim shot down in their initial trial. If the argument had succeeded, as it has in some other cases, they may have been relieved of the debt under what is known as "fresh start" principles.
The judge instead called them "rogues who are clearly guilty of transgressions before the bankruptcy," and noted there have been no substantial efforts to pay their debts or maintain "suitable employment."
It's an assessment the appellate court agreed with, noting the Poonians continue to deny their initial misconduct. The judges said there was no basis for saying the first ruling was "founded on palpable error," or "harsh and unduly onerous."
The couple argued the judge should have given more weight to the fresh start principle, but that suggestion too was shut down.
"The bankruptcy process should not be a clearing house for the liquidation of debts irrespective of the circumstances in which they were incurred," the appeal judges said.
Taking these and other considerations into account, they determined there was "no merit in any of the grounds of appeal identified by the appellants," and dismissed the couple's appeal.