Does a bankruptcy trustee need special permission to keep a regulated business like a pharmacy open while selling it?

The wrong-unit error to avoid

BIA s.30(1)(c) lets a trustee, with the inspectors’ permission, “carry on the business of the bankrupt, in so far as may be necessary for the beneficial administration of the estate”. That is real authority, but it is authority over the property of the estate. It answers nothing about whether the trustee is entitled to hold a position — owner and operator of a pharmacy, for example — that a provincial licensing statute reserves to a licensed professional or a compliant corporation. Applying a federal property power to a provincial licensing question is the recurring error here.

Where the real permission comes from

A general prohibition like Ontario’s — “No person other than a pharmacist or a corporation complying with the requirements of section 142 shall own or operate a pharmacy” — would otherwise close the doors the day the owner is adjudicated bankrupt. The DPRA answers that with its own express carve-out: s.145(1) provides that on a bankruptcy, insolvency or assignment, “the person shall so notify the Registrar and the trustee in bankruptcy, liquidator or assignee, as the case may be, may own and operate the pharmacy for the purposes of the bankruptcy, insolvency or assignment”. Three limits are built into that sentence: the notification duty is on the bankrupt owner, not the trustee; s.145(3) then requires the trustee to file evidence of its authority; and the permission is purposive — it exists to support a sale process, not to run the pharmacy indefinitely. The supervision rule is unaffected too: a pharmacist must still be physically present and designated as manager under s.146(1).

Check the sector statute, every time

The lesson generalises past pharmacies. Any regulated business — a liquor licence, a daycare, a cannabis retailer, a professional practice — is governed by its own statute’s ownership rule, and the BIA never overrides that rule on its own. Before assuming a receiver or trustee can keep a licensed business trading through a sale process, find the sector statute’s own exception in writing. If it is not there, the safer assumption is that the doors close on the filing date.

Case Files

A trustee who could lawfully keep the dispensary open is this exact wrong-unit error, caught before it cost the deal: BIA s.30 correctly cited for the trustee’s authority to trade, and DPRA s.145(1) separately confirmed for the authority to hold the licence. For the equivalent question on a liquor-licensed business, where the sector’s own permission comes with a hard outer time limit, see A receiver with one year to sell a licensed restaurant.

Sources

• • Drug and Pharmacies Regulation Act, R.S.O. 1990, c. H.4 — s.144(1) the ownership prohibition; s.145(1) marginal note Carrying on business of bankrupt person; s.145(3) filing duty; s.146(1) supervision requirement.
• • Bankruptcy and Insolvency Act, s.30 — (1)(a) and (c), the trustee’s powers over estate property. Note the unit: property, not licensing status.
• • Treadstone Law — buying a business in receivership in Ontario — adjacent; it covers the buy-side process for an unlicensed business and does not address whether an insolvency officer may lawfully hold a regulated position.