A $100 million valuation gap forces open a trustee's expert files
An Ontario court has ordered a bankruptcy trustee to hand over expert communications behind a $100 million real estate valuation gap.
The ruling, released August 7, 2026, resolves a discovery motion inside a long-running fight over a former employee's multimillion-dollar profit-share claim against the companies behind a major real estate development.
The former employee's original claim sought $1 million for wrongful dismissal and $18 million for breach of an alleged oral agreement entitling her to 20 percent of the profits earned on the project. The Proposal Trustee accepted the wrongful dismissal claim at $880,000.39 in March 2023 but disallowed the profit-share claim in full that August. She appealed, and the Ontario Superior Court of Justice set aside the disallowance in March 2024, confirming the profit-share claim was a valid, provable claim that the Trustee had to value. That decision was upheld by the Ontario Court of Appeal in 2025, and the Supreme Court of Canada refused leave to appeal it on July 30, 2026.
Following the 2024 decision, the claim - now valued at $25 million, up from the original $18 million - went back to the Trustee to determine under the Bankruptcy and Insolvency Act. The Trustee valued it at zero in a Notice of Valuation dated June 30, 2026, relying on two hired experts who used a Direct Comparison Approach to put the project's worth at $275 million. The former employee's own experts, using a Land Residual Approach, came in $100 million higher, at $375 million. Her appeal of the zero valuation is scheduled to be heard October 21, 2026, with costs of this motion deferred until then.
Ahead of that appeal, she sought production of correspondence between the Trustee's two experts, and between those experts and the Trustee or its counsel, arguing the material could reveal what shaped opinions that left her claim worth nothing. The Trustee pushed back, calling the request a fishing expedition and arguing its working file was shielded from disclosure under section 26 of the Bankruptcy and Insolvency Act.
Justice Kimmel disagreed that section 26 applied, since the request targeted the experts' own files rather than the Trustee's working file. She ordered the Trustee to obtain and produce the specific answers its experts had refused to give on cross-examination, with redactions limited to references to the Trustee's strategy or tactics toward the debtor companies. "This is an unusual case," she wrote, pointing to the Trustee's dual role as both investigator and adjudicator of the claim.
The decision has weight beyond this one estate. It tells trustees that working-file privilege has real limits once an appeal is underway, and that claimants don't need to prove bad faith to get at the communications behind a contested valuation. Anyone running or challenging a BIA claims process built on expert opinion should take note: the number in the report is no longer the end of the inquiry.
