Former FGC Health chief’s bankruptcy discharge adjourned over missing records

The former chief executive of FGC Health must complete financial reporting and outstanding tax returns before a Manitoba court will decide whether, and on what terms, to discharge him from bankruptcy.

In Bankruptcy of Bains, 2026 MBKB 127, Registrar J. L. Goldenberg of the Court of King’s Bench of Manitoba adjourned Dalbir Singh Bains’s discharge application without setting a new hearing date on September 16, 2026. The registrar declined to refuse discharge outright, instead giving Bains an opportunity to fulfil his outstanding obligations.

Claims filed in the bankruptcy totalled $73,696,900, primarily relating to personal guarantees Bains made as chief executive and principal of FGC Health Inc. and affiliated companies that entered receivership in August 2024. That figure describes the claims filed, not a final debt amount adjudicated in this ruling.

Why discharge was not automatic

Bains made his first assignment in bankruptcy on December 30, 2024. His trustee, Deloitte Restructuring Inc., opposed discharge and sought substantial conditions, including monetary payments. Creditor CWB Maxium Financial Inc. supported the trustee’s position.

The dispute included whether Bains could leave bankruptcy automatically after nine months. Under the provisions of the Bankruptcy and Insolvency Act considered by the registrar, a first-time bankrupt required to make surplus-income payments was not eligible for that nine-month discharge. The relevant automatic-discharge period was instead 21 months, unless an opposition was filed before discharge took effect.

Bains initially maintained that the nine-month period applied and told the trustee he would not continue monthly reporting unless it was determined that his bankruptcy extended beyond it. He later acknowledged that he had surplus-income obligations and was not eligible for discharge after nine months.

Goldenberg concluded that September 30, 2026, was the earliest date Bains could otherwise have obtained an automatic discharge. But the trustee had filed its opposition before that date. The passage of 21 months therefore did not settle the matter: entitlement to discharge and any conditions had to be decided by the court.

Missing information prevented a final decision

The registrar found that Bains had stopped submitting monthly reports after October 2025 and acknowledged outstanding personal and corporate tax returns. At the time of the ruling, the trustee and court lacked a complete picture of his income and financial circumstances over the full bankruptcy period.

That gap mattered to the amount of surplus income payable to the estate. The trustee advanced different calculations, and Bains accepted that some money was owing, but Goldenberg declined to fix the final amount on the incomplete record.

Bains also agreed that certain non-exempt cash and tax refunds were payable to the estate. The registrar noted that agreement without making a final order concerning discharge conditions.

Tax returns could affect the trustee’s assessment of liabilities, refunds and the administration of the estate. The registrar had reviewed Bains’s affidavit and four trustee reports, but concluded those materials could not replace the missing reporting.

Goldenberg reasoned that allowing someone to stop reporting based on their own interpretation of the legislation, then obtain a discharge decision on the resulting incomplete record, would improperly give them an advantage from non-compliance.

What must happen before the hearing resumes

The registrar considered outright refusal of discharge but rejected that more severe response. Such a refusal would have prevented another discharge application for a year. An adjournment instead allowed Bains to complete his statutory obligations before the remaining issues were decided.

The application could return only after Bains completed monthly reporting through September 30, 2026, filed all outstanding personal and corporate income tax returns, and gave the trustee a reasonable opportunity to review the material and update its position.

The trustee could then assess whether further amounts were owing and file an updated report. Bains would have an opportunity to provide another affidavit, and updated legal briefs could also be filed.

Once those steps were completed, either party could arrange another hearing. Notice had to go to the Office of the Superintendent in Bankruptcy and CWB Maxium. Goldenberg remained responsible for the application and available to address scheduling and procedural issues.

The September ruling did not determine the final surplus-income obligation, impose final discharge conditions or permanently refuse discharge. It also does not establish whether Bains has since supplied the required information or whether the application has returned to court.