For most Canadians the thought of being worth over a million dollars is a totally unattainable dream. Yet, there are now almost 357,000 Canadians with at least $1 million in wealth, not including their primary home (Capgemini). And, as difficult as it is to believe, some of these millionaires worry about being broke. They worry about having enough money in retirement. The reality is that they may have reason for concern.
Enough money in retirement: What do the ultra rich worry about?
20% of ultra-high-net-worth investors (defined as those with a net worth between $5 million and $25 million), are concerned about having enough cash to last throughout retirement. (a 2017 survey by the Illinois-based Spectrem Group, a financial research firm).
People feel angst about running out of money in retirement whether they have $1 million, $10 million or $50 million”, says Gordon Stockman, a fee-only financial planner and principal of Efficient Wealth Management Inc. in Mississauga.
Enough money in retirement: Why do the rich worry about running out of money?
The rich have very expensive lifestyles to maintain. They’re used to the finest things in life – mansions, vacation homes, household staff, exotic cars, first class travel, designer clothes – and they don’t want to give anything up. But, how will they be able to maintain these fabulous lifestyles for what could be a 25 – 30 year retirement? Something’s got to give.
Enough money in retirement: Is it possible to be worth over a million dollars and go broke?
Unfortunately, although difficult to believe, yes it is. There are examples in the news every day about actors, actresses and professional athletes who earn unimaginable amounts of money, and declare bankruptcy. It also happens to doctors, lawyers and other “regular rich folk” who lost track of their spending and blew through their money. It can happen to anyone. Very few people are rich enough to be immune from money problems.
Enough money in retirement: What about you?
No matter how much money you have, take a good hard look and your finances. And if you find yourself in a financial danger zone, contact Ira Smith Trustee & Receiver Inc. We’re a full service insolvency and financial restructuring practice serving companies and people throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Your financial problems can be solved with immediate action and the right plan. Give us a call today.
Canadians have been on aborrowing binge due in large part to very low rates. But, the tide is beginning to change andinterest rates, although still low, are beginning to creep up. This rise in rates is making many Canadians very nervous. For some, it could cause seriousfinancial hardship.
Interest rates: The threat of rising interest rates
Forum Research Inc. conducted a survey after the Bank of Canada raised rates in September and the results are quite interesting:
60% of young people are at least somewhat concerned by the prospect of rising rates
Over 50% of Canadians think that rising rates will negatively impact their personal finances
35% of Millennials aged 18 to 34 have no savings at all
12% expressed concern that more rate hikes were on the way and that the impact would be extremely negative
Interest rates: “It was almost like money was free”
In theory, higher interest rates should provide an incentive for Canadians to save more, but the long period with low rates have taken their toll on many. “Rates were so low for so long, it was almost like money was free,” said Forum Research president Lorne Bozinoff in an interview. “Some may have overextended themselves during that time, thinking rates will never go up.”
Interest rates: How will you cope with higher interest rates?
The question now is how will Canadians cope with higher rates? “Some households might not be able to afford an increase,” says Frances Donald, senior economist with Manulife Asset Management. “And this is where we can see defaults, first on auto loans and then on housing.”
We approach every file with the attitude that your financial problems can be solved given immediate action and the right plan. Together we will explore with you all the bankruptcy alternatives available to you. I know that we can help you get back on solid financial footing, the same way we have helped many others just like you,Starting Over, Starting Now.
As claims against Harvey Weinstein transform from a few into an avalanche, several of the loan providers backing his named firm have actually started speaking to bankruptcy advisors about filing for bankruptcy protection, say sources knowledgeable about the issue. They are concerned that The Weinstein Company (TWC) may be filing for bankruptcy protection. Why do you ask? I will explain below. Everyone is lawyering up
A team of The Weinstein Company’s financial institution loan providers have involved restructuring lawyers from Sidley Austin to work as advisors in case of a filing for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. They have actually likewise held pitches to work with an economic consultant to give calculated restructuring guidance. TWC has retained the law office of O’Melveny & Myers, while Moelis & Company is acting as an economic consultant to the board. The firm has involved FTI Consulting, a financial advisory and restructuring firm.
filing for bankruptcy protection
Can The Weinstein Company borrow any more?
TWC has actually been attempting to raise money. It has also tried to offer itself totally to a brand-new financier. Talks have not yet produced a deal. Also if it locates a purchaser, a sale might have to be applied in the context of a bankruptcy, to “clean” the assets from the mounting claims against TWC.
What are its chances of a successful restructuring? The Weinstein Company has long shot of restructuring, however, filing for bankruptcy protection would certainly provide possible purchasers with the chance to buy its movie collection and other assets free from the claims against both Harvey Weinstein and TWC.
TWC might use bankruptcy court-approved public auctions to discover purchasers and after that make use of those sale proceeds to establish a fund against which claims can be made and sorted out by the bankruptcy trustee. TWC is certainly going to meet claims over its failure to stop Harvey’s transgressions. Is The Weinstein Company brand too toxic for it to survive?
TWC has borrowed millions of dollars in the last few years. It now faces the real possibility that its now-toxic brand name will materially influence future company chances of survival in the longer term. The cases associated with Weinstein’s alleged sex-related criminal offences will probably result in adverse annual report reporting obligations. This will further worry TWC’s lenders. Filing for bankruptcy protection: Watch for all the lawsuits – even the ones not involving sex!
Harvey Weinstein has actually currently filed a claim against the business, looking for accessibility to his earlier company e-mail account to strengthen his defence against the sexual harassment claims against him. A bankruptcy would likely leave behind just a shadow of the firm that might really well have no choice but to file a claim against Harvey Weinstein for sinking the company. In other words, what we have here is The Weinstein Company horror movie.
Filing for bankruptcy protection: Does your company have too much debt?
Sears Canada defined benefit pension plan shortfall: Introduction
On November 6, 2017, Hamilton Mountain NDP MP Scott Duvall rose in the House of Commons for leave to introduce Bill C-384. It is titled “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance programs)”. Mr. Duvall’s motivation was the Sears Canada defined benefit pension plan shortfall.
Sears Canada defined benefit pension plan shortfall: Hamilton Mountain MP Scott Duvall introduces Private Member’s Bill C-384
“Mr. Speaker, I would like to take this time to thank my seconder, my colleague who has done great work and works very hard in this House, and who has also helped me a lot on this bill. I rise today to introduce a private member’s bill titled, an act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. This bill will amend the Bankruptcy and Insolvency Act and the CCAA so that companies will have to bring any pension plan fund to 100% before paying any other secured creditors. It also makes amendments to require companies to pay any termination or severance pay owing before paying any secured creditors. Other amendments will prevent a company from stopping the payment of any post-retirement benefits during any proceedings under the BIA or CCAA. These amendments will inject some fairness into a process that often sees the interests of workers, retirees, and their families placed behind all others. We must fix the imbalances in current legislation and provide Canadian workers, retirees, and their families with the protection they expect and deserve. I am hopeful that all my colleagues in Parliament will put aside their partisan differences and support this bill. Canadian workers, retirees, and their families deserve no less.”
Although he did not mention it specifically by name in the House of Commons, Mr. Duvall has said that he would introduce such a Bill as a result of the Sears Canada defined benefit pension plan shortfall.
Sears Canada defined benefit pension plan shortfall: Hamilton Mountain MP Scott Duvall walks the walk
With his Bill C-384, Mr. Duvall has lived up to his promise.
sears canada defined benefit pension plan shortfall
Sears Canada defined benefit pension plan shortfall: This is actually the second Bill attempting deal with this problem
In our November 1, 2017 blog, SEARS CANADA CLOSING: POLITICIANS WANT NEW LAWS TO PROTECT PENSIONERS DUE TO SEARS CANADA CLOSING, we reported that Bloc Québécois MP Marilène Gill’s Private Member’s Bill C-372, passed First Reading. That Bill is titled “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans)”. In that blog, we described the provisions included in that Bill.
Like Mr. Duvall, Ms. Gill is trying to pass legislation to avoid another Sears Canada defined benefit pension plan shortfall insolvency situation.
Sears Canada defined benefit pension plan shortfall: What does Bill C-384 actually say
The purpose of this blog, is to describe the terms of Mr. Duvall’s Bill.
Mr. Duvall’s Private Member’s Bill C-384 passed First Reading. It is very similar to Ms. Gill’s BIll C-372. He wishes to amend the Bankruptcy and Insolvency Act (BIA) as follows:
In order to be approved by the Court, a corporate restructuring proposal under the BIA, for a company with a prescribed pension plan, the Proposal must include payment in full of any unfunded pension liability or solvency deficiency. The amount is calculated at the time of the filing of the Notice of Intention To Make A Proposal (NOI) or the Proposal if there is no NOI filed.
New section 69. 7 be added to the BIA that in the restructuring proposal of an employer, upon filing, until the discharge of the Licensed Insolvency Trustee (LIT), or the insolvent employer becomes bankrupt, all amounts that the employer must contribute under any arrangement for the benefit of the employees, must continue throughout the restructuring period. This would cover any pension plan, health, injury or accident plans and group insurance coverage.
The unfunded pension liability or solvency deficiency calculation is called “special payments” in Bill C-384. The calculation is by section 9 of the Pension Benefits Standards Regulations, 1985.
In a receivership, the receiver is personally liable for paying any unfunded pension liability or solvency deficiency. However, the receiver’s liability is only from the proceeds of the sale of current assets.
In either a receivership or corporate bankruptcy, the charge for any unfunded pension liability or solvency deficiency would rank ahead of the charge of any other secured creditor. It is interesting to note that the Bill does not attempt to provide such a security ranking to anything other than the pension liability or solvency deficiency.
The Officers and Directors of the company are not entitled to the benefit of this secured charge. Even if they are participants in the pension plan that has the unfunded pension liability or solvency deficiency.
New subsection 136(1) (d. 001) to the BIA, creating an extra class of preferred creditor. A preferred creditor is an unsecured creditor who ranks ahead of the ordinary unsecured creditors and ranks after the secured creditors. The Bill states that it would say that the amount of any termination or severance pay owed to an employee by a bankrupt employer, less any amount previously paid by the LIT, would rank in priority right after the wages owed to the employee.
There are also proposed amendments to the Companies’ Creditors Arrangement Act (CCAA) in Bill C-384. It is to bring the same changes in that statute as those to the BIA described above. The intent is that the treatment under both statutes is the same.
Sears Canada defined benefit pension plan shortfall: Now it is up to Justin Trudeau and his Liberal Party
We will now have to wait and see what happens to both Ms. Gill’s and Mr. Duvall’s Private Member’s Bills. As we previously reported, it is unusual that a Private Member’s Bill becomes real legislation. As the Liberals hold a majority in Parliament, if they don’t want it, or a revised Bill for the same purpose, to pass, it won’t.
Sears Canada defined benefit pension plan shortfall: Does your company need a restructuring and turnaround plan?
Is your company insolvent and needs to restructure? Is your business viable but can only employ people and carry on business if it can restructure its debt? Contact the Ira Smith Trustee & Receiver Team. If we meet with you early on, we can create a restructuring and turnaround strategy. That way your company won’t have to be like Sears Canada closing.
sears canada defined benefit pension plan shortfall
Following the Sears Canada failed restructuring, is the Sears Canada closing of all stores. It is leaving 16,000 retirees unclear about the future of their underfunded pension plan. Support is expanding for brand-new laws to better protect Canadian workers during a company’s collapse.
Sears Canada Closing: What CARP has to say
CARP, a nationwide not-for-profit group formerly called the Canadian Association for Retired Persons, was recently on Parliament Hill to meet dozens of MPs as it lobbies for law adjustments.
Wanda Morris, vice-president of CARP,stated that CARP is requesting for the unfunded pension liability be provided priority position so it goes to the front of the line.
Pensioners hold no priority when it pertains to dividing up assets through a bankruptcy, and Ms. Morris wants protection for retirees for underfunded defined benefit pensions when the company goes through a restructuring or into bankruptcy.
Ms. Morris stated that along with the practically 16,000 retirees at Sears, CARP estimates that there are about 1.3 million workers in Canada that possibly could be in danger with defined advantage pension. Sears Canada closing all stores has made the plight of retirees a front and centre issue for CARP.
Sears Canada Closing: Private Member’s Bill C-372 passes First Reading
On Oct. 17, Bloc Québécois MP Marilène Gill suggested a member’s bill, C-372. The intent is to change the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.
The change attempts to correct the injustice dealt with by retired workers whose pension as well as group insurance policy benefits are not secured when their company declares bankruptcy or undergoes restructuring. The changes are a result of the Sears Canada employees and retirees treatment, as a result of Sears Canada closing locations.
Sears Canada Closing: What the NDP has to say
Hamilton Mountain MP Scott Duvall plans to introduce his very own private member’s bill to try to solve this problem. While he notes he has actually had talks with Gill, he claimed his suggestion will be a bit different.
Mr. Duvall specifies that his bill will amend the regulations from where it’s worded currently. He wishes that when a company goes into bankruptcy protection, the pensioners will be a secured creditor. He is also responding to the process which has led to Sears Canada closing store locations,
Sears Canada Closing: Bloc MP Marilène Gill and her Bill C-372
On October 17, 2017, MP Marilène Gill rose in Parliament and stated:
“Mr. Speaker, I have the honour to introduce my first bill in the House today, a private member’s bill that seeks to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.
This bill seeks to correct the injustice faced by retired workers whose pension plans and group insurance plans are not protected when their company goes bankrupt or undergoes restructuring.
I will do everything in my power to ensure that this bill receives royal assent, that way, we can help prevent retirees, like those from my riding who are here today to support me, from losing their pensions, and improve the existing legislation by giving pension plans’ unfunded liabilities preferred creditor status, among other things. I hope my colleagues will be supporting this bill.”
Sears Canada Closing: Can it get Royal Assent?
BILL C-372 which passed First Reading on October 17, 2017 is named “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans)”.
Private member’s bills such as this one rarely pass the House. However, I thought it would be useful to describe what Ms. Gill’s views are as a result of Sears Canada closing.
Below is my analysis of how BILL C-372 proposes to amend the Bankruptcy and Insolvency Act (Canada) (BIA) and the Companies’ Creditors Arrangement Act (Canada) (CCAA). The impetus of course is certain high-profile corporate restructurings/failures with underfunded defined benefit pension plans. With Sears Canada closing, Ms. Gill put forward her private member’s bill.
The most recent corporate failure which initiated her private member’s bill of course was a result ofSears Canada closing.
Sears Canada Closing: Bill C-372 proposed BIA and CCAA amendments
Bill C-372 wishes to amend the BIA as follows:
In order to be approved by the Court, a corporate restructuring proposal under the BIA, for a company with a prescribed pension plan, the Proposal must include payment in full of any unfunded pension liability or solvency deficiency calculated at the time of the filing of the Notice of Intention To Make A Proposal (NOI) or the Proposal if there is no NOI filed.
The unfunded pension liability or solvency deficiency calculation is by section 9 of the Pension Benefits Standards Regulations, 1985.
In a receivership, the receiver is personally liable for paying any unfunded pension liability or solvency deficiency but only from the proceeds of the sale of current assets.
In either a receivership or corporate bankruptcy, the charge for any unfunded pension liability or solvency deficiency would rank ahead of the charge of any other secured creditor.
The Officers and Directors of the company are not entitled to the benefit of this secured charge. Even if they are participants in the pension plan that has the unfunded pension liability or solvency deficiency.
In a corporate restructuring proposal or bankruptcy, the amount not paid under the Wage Earner Protection Program Act (Canada) (WEPPA). It is the amount to adequately indemnify the beneficiaries in the event the employer ceases to take part in a group insurance plan. Such a plan is one that provides for the payment of benefits to, or in respect of, employees or former employees for, among other things, life, disability, health or dental insurance is a preferred claim. It will be a preferred, but still an unsecured claim.
The amount equal to the difference between any severance pay or compensation in lieu of notice owed by an employer to an employee and any amount previously paid by the trustee for that severance pay or compensation in lieu of notice.
There are also proposed amendments to the CCAA in Bill C-372. It is to bring the same changes in that statute as described above. The intent is that the treatment under both statutes is the same. I won’t repeat those again.
sears canada closing
Sears Canada Closing: Will Bill C-372 become law?
As I stated above, it is very rare that a private member’s bill becomes real legislation. The other reason is that the Liberals hold a majority in Parliament. If they don’t want it to pass, it won’t.
On October 25, 2017,Innovation Minister Navdeep Bains said the Liberal government has no plans to change laws to protect pensioners in the wake of Sears’ bankruptcy. That is a pretty definitive statement.
So right now it seems there is a lack of political will to make the proposed law amendments. I suspect that on a financial basis, there will also be opposition for the following reasons:
In most cases, it will be impossible to have a successful large corporate restructuring if 100% of unfunded pension liability must be paid. Therefore, jobs will not be saved if we have more corporate bankruptcy filings instead of restructurings.
Lenders will have to now ignore current assets in the borrowing base of corporations. This will make corporate borrowing much more difficult for solvent corporations with pension plans to carry on business.
Lenders may have to reserve the entire amount of any unfunded amounts. They will rank ahead in a receivership or bankruptcy.
Severance pay or compensation in lieu of notice will now be a claim ranking ahead of trade suppliers in a corporate restructuring or corporate bankruptcy. This may alter the amount of an unsecured credit line a supplier will be willing to give to a customer.
It will cause more chaos to normal lending and trade practices which will be a problem for any government.
Claims under the group health indemnity provisions may not result in any real benefit to employees of a company going through either a corporate restructuring or bankruptcy. There is rarely funds left over after the claims of secured creditors.
We will keep monitoring this important issue. We will update you when MP Scott Duvall puts forward his private member’s bill and as other matters arise.
Sears Canada Closing: What To Do If You Or Your Company Need A Financial Restructuring?
It is now Sears Canada closing time. If you’re attempting to discover a means to restructure your firm’s debt, so that you can avoid a Sears Canada closing scenario, callIra Smith Trustee & Receiver Inc. If we meet with you early on, we can create a restructuring and turnaround strategy. That way your company won’t have to be like Sears Canada closing.
Our strategy for every person is to create a result where Starting Over, Starting Now occurs, starting the minute you walk in the door. You’re simply one telephone call away from taking the crucial steps to go back to leading a healthy, balanced and tension free life.
Poor credit personal loans guaranteed approval Canada: Introduction
Legit companies do not give poor credit loans guaranteed approval Canada. If you’re experiencing significant economic problems and declined for a financing by conventional banks, do not be seduced by advertising that states “… poor credit personal loans guaranteed approval Canada …” even if you have bad credit or no credit.
Poor credit personal loans guaranteed approval Canada: They try to trick you with seductive marketing slogans
They use catchy marketing tag lines such as:
100% Free, Bad or No Credit, Great Terms, $0 Down, Fast, Apply Now!
Borrow Up To $5,000 With Affordable Payments. Find out more & Get Started!
Or they send either an email or letter in the mail offering you a bad credit loan, student loan, mortgage, negative credit score loan, or a fantastic bad credit, credit card offer.
Poor credit personal loans guaranteed approval Canada: Beware of the scammers!
They may seem to be genuine yet beware! They will certainly ask you for your personal ID and financial info; and that is where your issues will certainly begin.
These are rip-offs! They are victimizing you because they know you are desperate and will not stop until you get the funding from someone for a bad credit loan.
Poor credit personal loans guaranteed approval Canada: What the Canadian Anti-Fraud Centre has to say
According to the Canadian Anti-Fraud Centre, advertisements that promise guaranteed approval loans generally show up online or in city and national newspapers, magazines and tabloids. Remember, just by advertising through reputable media outlets does not make the business behind the ad honest or legitimate.
Poor credit personal loans guaranteed approval Canada: The up-front fee scam
These companies usually ask you to pay an up-front fee before they will start work. This fee might vary from hundreds to thousands of $$$. You rarely get your funding after paying the up-front fee. If you do, it is on the most onerous terms. You can never get your money back.
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Poor credit personal loans guaranteed approval Canada: How to fix your bad credit and debt issues
If you have actually been declined for a loan through a normal lender, then that is a signal that you have debt concerns that have to be handled. Companies that advertise poor credit personal loans guaranteed approval Canada are scams. They are not the solution to your troubles; expert help is.
Contact Ira Smith Trustee & Receiver Inc. today. We are professional trustees. As such, the Canadian government licenses and supervises us. First, we will assess your situation and help you to come to the very best possible solution for your troubles.
When you come to us for your free consultation, we first check and figure out with you if one of the bankruptcy alternative choices is best for you. These include credit counselling, debt consolidation or a consumer proposal. If none of those options are available to you, only then will we discuss the bankruptcy route. Starting Over, Starting Now we can help recover you to financial health.
poor credit personal loans guaranteed approval canada
A bankruptcy discharge is when the bankrupt is released under Canadian bankruptcy law from his or her debts as part of the bankruptcy process. Some people think that it is the act of filing bankruptcy that releases the bankrupt from liability. This is not the case. It is the discharge from bankruptcy process that “discharges” the bankrupt’s debts.
We explain in this vlog the procedure when a bankrupt’s outright discharge is opposed. We discuss the top 8 things that the Bankruptcy Court will consider in determining just what outcome the bankrupt could expect.
The primary benefit of the bankruptcy process for the insolvent person
The bankruptcy discharge is among the primary benefits of relief under the Bankruptcy and Insolvency Act (Canada) (BIA). The discharge is vital to the bankruptcy process. Debtors, after bankruptcy, can wipe the slate clean and start over, which is a central principle under the BIA statute.
Not all debts may be released
A bankruptcy discharge offers the discharge of many unsecured debts. Credit card debts, personal income tax debt, unsecured personal loans and under certain conditions, some student loan debt are all dischargeable debts. Financial debts, which will not be discharged include:
support payments to a previous spouse or to children;
fines or financial charges imposed by the Court;
debts emerging from fraudulent behaviour;
student loans if fewer than seven years have passed considering that the bankrupt quit being a full or part-time student.
bankruptcy discharge
It can be opposed
An insolvent’s bankruptcy discharge application may be opposed by one or more unsecured creditors or the Licensed Insolvency Trustee (formerly called a bankruptcy trustee) (LIT). A creditor opposition is created when the creditor files the required notice of opposition, setting out the reasons for opposing.
This happens if the insolvent has not met all of his/her responsibilities under the BIA. Making full disclosure, attending the required two financial counselling sessions and making all necessary surplus income payments are all duties of the bankrupt that must be fulfilled if a discharge is to be considered.
It can also happen if the individual bankrupt has actually committed a bankruptcy offence. Those are acts listed in section 173 (1) of the BIA. In this case, there needs to be a bankruptcy discharge hearing in Court and the Court will after that evaluate the LIT or creditor opposition as well as give its decision on the discharge from personal bankruptcy.
Absolute discharge— The bankrupt is launched from the legal obligation to pay off financial obligations that existed on the day of bankruptcy, except for certain types of debt identified above.
Conditional discharge— The bankrupt must fulfill certain conditions, additional payments into the bankruptcy estate, to get an absolute discharge. Once all conditions have been fulfilled, an absolute discharge will certainly be granted.
Suspended discharge— An absolute discharge that will be granted at later on a specific date determined by the Court.
If there is no opposition to the discharge from bankruptcy of the bankrupt by a creditor or the LIT, then the LIT is able to provide an automatic discharge by issuing the appropriate certificate. There is no need for attendance in Court.
bankruptcy discharge
The opposition process
When a debtor’s bankruptcy discharge application is opposed by either an unsecured creditor or the LIT, the Trustee needs to secure a Court day. This will be for a Court hearing on the insolvent’s application for discharge. The LIT must then tell all creditors who have filed a proof of claim of the opposition. Details are also provided about the date, time as well as place of the Court hearing.
The Trustee needs to also file a report with the Court on the conduct of the bankrupt both prior to as well as after applying for bankruptcy. The report will as well give a summary of the financial results of the bankruptcy administration. If a creditor has opposed the bankrupt’s discharge, then that creditor likewise needed to send a notice of opposition.
Does the bankrupt need a lawyer on an opposed discharge?
When going to Court for his/her discharge application hearing, a bankrupt would be well advised to come with a skilled bankruptcy lawyer to represent his or her interests. Sometimes the discharge hearing is less formal than various other types of Court hearings.
However, the Court follows all the proper regulations of civil procedure. It is sometimes tough for nonprofessionals to put their best foot forward without an attorney’s aid.
The top 8 things the Bankruptcy Court will consider
The concerns the Court thought about, in determining what type of bankruptcy discharge certificate to issue, which is the same in all bankruptcy discharge hearings, were:
Do the conditions of the bankruptcy filing and the bankrupt’s conduct sustain an order discharging the Bankrupt’s unsecured debts?
The Court’s problem is to make sure that within a choice the policy purposes of the BIA are fulfilled. The bankruptcy, including the insolvent’s discharge, should act as a deterrence for the person not to duplicate the very same behaviour.
If the circumstances of the bankruptcy support an order discharging the bankrupt, what terms of discharge are proper under the distinct circumstances of the bankruptcy?
What were the conditions of the insolvent when the debts were sustained?
What efforts did the insolvent make to pay the creditors?
Did the bankrupt pay in respect of certain other debts but not all of them and particularly not the debt of the opposing creditor?
Exactly what are the insolvent’s monetary opportunities for the future?
Is there any other conduct or reality that needs to be factored into with the regard to discharge?
The Court will take lots of variables into account. The conduct, previous income, education and age of the bankrupt are all important factors. The Court will certainly likewise trust the Trustee’s report to Court on the bankrupt’s application for discharge. The Trustee’s report assists in determining facts about the conduct of the insolvent and his or her future prospects.
Prevention is always a consideration. It is however very important to remember that Courts tend to be extra conventional when dealing with older bankrupts. A more youthful bankrupt with years of income-making opportunities could be needed to make an extra significant repayment. Less respect is given to the instant ability to pay.
An older bankrupt with some surplus income but fewer working years might be needed to pay less surplus income obligations into the bankruptcy estate.
Bankruptcy discharge: Is my bankruptcy case over when I get a discharge?
You should by this point in my Brandon Blog realize that when you receive an absolute discharge from your bankruptcy, at that point, you are discharged from your unsecured debts.
A discharge shows that you have finished with your bankruptcy legal process and your personal liability for unsecured debts has ceased. It’s not a separate thing from bankruptcy; it happens either automatically or by an Order of the Court, as I have described above.
At that point, the LIT still has some duties to fulfill. They include:
if there is going to be a dividend paid to the creditors, making sure that all proofs of claim have been reviewed and allowed for dividend purposes;
resolve any uncertainties the LIT may have concerning certain filed bankruptcy claims, including the issuance of Notices of Disallowance if any;
preparing the bankruptcy administration Final Statement of Receipts and Disbursements;
getting approval from the Office of the Superintendent of Bankruptcy to the Final Statement
getting the Final Statement, including the LIT’s fee and disbursements, approved by the Court;
issuing the dividend bankruptcy payments, if any
getting the discharge of the LIT
It is then that your bankruptcy case is closed.
Bankruptcy discharge: Do you have too much debt and want to avoid bankruptcy?
Do you have too many debt obligations and debt payments and have no idea how to deal with them? Act before you find yourself in the throes of an emergency financial situation. Ira Smith Trustee & Receiver Inc. has assisted many Canadian businesses and people throughout the Greater Toronto Area (GTA) in dealing with debts that need a plan for Starting Over, Starting Now. Don’t postpone. Give us a call today. Financial problems can be solved while avoiding bankruptcy with timely activity as well as our excellent strategy tailored just for you.
I regularly write articles about debt help. Trends over the past few years about the increase in Canadian average household debt has gotten me thinking. We can get vaccinated for measles, mumps, rubella, influenza and a host of other diseases. Now it seems that without even getting a shot, Canadians have developed immunity to the dangers of debt.
How could this happen to what was traditionally a nation of savers? Did we just throw caution to the wind? Why did we stop heeding the warnings from the Bank of Canada, financial institutions, the Parliamentary Budget Office (PBO) and the credit reporting agencies?
Articles about debt help: Immunity to debt
Everyday there are headlines about the alarming levels of personal debt and how many Canadians are teetering on the brink of financial disaster. Have we stopped hearing the message or heeding the warnings? It seems that as we borrow more and take on more debt that our attitude to debt changes.
“People who don’t have any debts tend to be strongly opposed to debt… but if you put them into a situation where they are forced to acquire it, their attitudes change in the direction of toleration,” said Stephen Lea, an emeritus professor of psychology at the University of Exeter in the U.K. who has decades of experience studying the psychology of debt. As people acquire debt, Lea has found they also change their attitudes towards indebtedness. That’s an example of what psychologists call dissonance reduction. According to Mr. Lea, we really have developed immunity to debt.
Articles about debt help: Home prices and feeling immune to debt
There are more reasons why Canadians seem to feel immune to the dangers of debt. With house prices skyrocketing, home owners feel rich. And it seems that if Canadians are working and making their payments promptly, they feel in control of their finances. If interest rates continue to stay low, Canadians will continue to borrow more and more without realizing the dangers of accumulating debt.
Articles about debt help: Is there a solution to our immunity to the dangers of debt?
Saul Schwartz, who has studied personal debt as a professor of public policy at Carleton University believes that government should focus on policy actions that would rein in the lenders who are enabling all our borrowing because all the warnings are being ignored. I don’t know if that’s the answer but as a professional licensed insolvency trustee I can tell you that many Canadians felt immune to the dangers of debt until they faced a financial crisis.
Articles about debt help: What should you do if you are not immune to your debt load?
Take action before you find yourself in the throes of a financial crisis. Ira Smith Trustee & Receiver Inc. has helped many Canadian companies and people throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Don’t delay. Give us a call today. Financial problems can be solved with immediate action and the right plan.
“I will certainly not invest one red cent in your shop … no severance, no sale,”
A (typical comment) posted on the Sears Canada Facebook page before the company blocked new comments and made old ones vanish.
Well there has been a lot of Sears Canada News today and in the last month. The company sought bankruptcy protection only last June 22, 2017. It has been only a little over 1 month, but there has been so much media attention it seems a lot longer.
Sears Canada news today: Social media backlash
We’ve seen on social media that Sears Canada is facing a backlash when it comes to how they’re handling this liquidation. Notice that I am using the word liquidation, as opposed to restructuring. This is in spite of they are currently operating under the Companies’ Creditors Arrangement Act (Canada) (CCAA). This statute is designed as a restructuring statute.
Sears Canada news today: Why KVETCH about a KERP?
It comes just as the company began its liquidation sales at those fifty-nine stores they’re looking to close. There is a boycott in Canada that is gaining some traction on social media. People are upset with Sears Canada’s senior management. They obtained on the first Court application, approval from the Court on their plan to pay themselves retention bonuses. These bonuses would be paid under the terms of what is commonly called in complex corporate restructurings a “Key Employee Retention Plan” (KERP).
The retailer introduced that, as part of a Court-supervised restructuring procedure. It is shutting 59 of its 255 shops and letting go 2,900 workers. None of them will get severance pay. Sears also will stop payments to the employees’ defined benefit pension plan. The retailer recently accepted to delay that pension plan payment issue till September 30th.
Sears also accepted the compromise with the former employees to maintain paying health benefits for an extra 3 months until the end of September. This is so the people could have that time to get alternate coverage. It is still not great though. The employee pension plan will remain underfunded. The employees will have to look for a new health plan. To date, there is no provision for former staff to receive any sort of package.
Sears Canada news today: What exactly is a KERP?
It is normal in complex corporate restructurings to set up a KERP. The concept of a KERP began in US corporate restructurings in the 1990’s. The theory is that to have a successful restructuring, senior management have specific knowledge and ability. If they walked away from the company in bankruptcy protection, such as to accept a senior position elsewhere, the company would have a much more difficult and costly time in restructuring. Hence the idea was born that those essential managers should be promised a bonus to create the most value possible in the restructuring for the stakeholders. This is in addition to their normal compensation.
Often KERPs are now viewed as either:
a standard item that senior management expects to receive; or,
a greedy money grab negatively affecting other stakeholders.
I have not yet read any material to show why the Sears Canada bankruptcy protection case is so complex. I have not read how Sears Canada could not liquidate without existing senior management. It is earlier and current senior management who have not created a retail vision niche for Sears Canada for years.
Sears Canada news today: Time to “come back”
Thankfully, all CCAA protection orders have a standard “come back” clause. The reason for this is that not every stakeholder receives notice of the company applying for the bankruptcy protection order. Any stakeholder can come back to Court to oppose any part of the original order they did not receive notice of. They could not tell the Court of their position, and now want to come to Court with their complaints.
The Court appointed a law firm to represent the interests of the employees and former employees. As part of their motion material filed with the Court, they are asking the Court to amend the Sears Canada KERP. They state:
the amounts are excessive under the circumstances; and
the KERP does not incentivize senior management to enhance the value of Sears Canada.
It will be very interesting to follow this.
Sears Canada news today: It didn’t have to be this way
You may recall that Target Canada took a slightly different route towards its former employees when it decided to liquidate and leave Canada. It also liquidated under the CCAA. In our blog “TARGET CANADA CLOSING: $5.4 BILLION AND COUNTING”, we told you about the liquidation and that Target US established a trust fund for payment of the Target Canada obligations to its employees. For sure personal hardships occurred. At least they tried to soften the blow.
So now, while Sears Canada wants customers to come and buy at the liquidation sale, they have a PR nightmare on their hands.
Sears Canada news today: No comments please
It is so bad, that Sears Canada is not permitting public messages on its Facebook page. Most the messages from the public so far are negative against the company. CBC News recently noted that Sears Canada’s Facebook page was riddled with remarks from Canadians objecting exactly to what was happening to the company’s employees. Sears Canada has removed those comments from its Facebook page as well as blocking new comments.
Picture courtesy of CBC News
Sears Canada news today: Certainly a funny way to stay in business
You must wonder if Sears Canada really wants to restructure, or if they are just liquidating their inventory. They are also trying to sell whatever other assets they can. If it was a true restructuring, you would think that senior management would want to see more customers who would be loyal to (the new) Sears Canada when it would exit bankruptcy protection.
So instead of growing a loyal customer base, Sears Canada’s actions have spawned a strong and growing “Boycott Sears” momentum. They’re going to have to deal with that. It’s going to be interesting to see exactly how this plays out while Sears Canada currently is shopping for a buyer.
According to Sears Canada, the unhappy remarks did not motivate it to close the public articles or to remove many of the bitter statements. Regardless, the former employees are still faced with now with the question “how do you collect salary owed to you from an employer that goes out of business”.
Sears Canada news today: What to do if you or your company have too much debt
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Metro Vancouver’s high rental fees and salaries for skilled retail staff aided the demise of the 102-year-old shoe-store chain Ingledew’s. Ingledew’s is the latest retailer in Canada to become bankrupt. One of the most compelling of all the retail bankruptcy issues today, is the constant customer practice of identifying the product in bricks-and-mortar shops and then after buying online from other stores. There are others on the retail bankruptcy watch list for the same reasons.
Retail bankruptcy watch list: And what about the future of our malls?
“I worry that the shopping mall that we understand so well today, in as several as five to 10 years, will be totally different,” he informed Business in Vancouver. He predicts a slew of stores having a hard time and landlords clambering to find new methods to attract consumers.
Ingledew stated that costs and debt rose because of:
the amount of money it took to open these gorgeous new shops;
the lease rates paid to mall property owners for rent; and,
the wages paid to get and retain excellent people to be knowledgeable, treat the consumer well and properly represent the company.
He further stated that the costs were far overtaking any type of gains being seen in sales in stores.
These pressures, particularly the fad of buyers dealing with physical shops as display rooms, has Ingledew being afraid that there will be an earthquake of adjustment can be found in the retail industry in the next years.
Retail bankruptcy watch list: It is a North American issue
North American merchants are shutting greater than 3,600 stores this year to stanch losses. Retailers are also declaring bankruptcy at a staggering rate. Wal-Mart is now consuming their shed market share, according to Moody’s expert Charlie O’Shea.
He and a green bay bankruptcy lawyer debated at length with Ingledew and they agreed, nonetheless, that retail is quickly developing and stated the ultra-competitive shoe retail industry specifically is undertaking significant change.
Oxford Properties, for instance, wishes to increase the measure of area dedicated to food and drink sales in its shopping centers– to around 20% from 9%. Other shopping centers are increasingly having art exhibitions, Lego demos and various other demonstrations and events to draw consumers.
Retail bankruptcy watch list: The trending in the USA
In the United States, there are frustrating earnings reports from JC Penney, Macy’s, as well as Nordstrom, against a backdrop of overall distress in the retail market marked by sliding sales and traffic. Retailers are shutting shops and companies filing for Chapter 11 in 2017 in the first 4 months of 2017 are at a rate not seen since the last recession.
Retail bankruptcy watch list: Wal-Mart is investing online
However, it is not just Amazon that is the beneficiary of the distress in the brick and mortar retail environment. There is one major traditional retailer that is crushing it. Wal-Mart recently reported that e-commerce sales rose by 63% in its latest quarter, compared to 29% growth the previous quarter. The firm stated most of these sales were natural via Wal*Mart.com.
“We delivered a solid first quarter and we’re encouraged by the start to the year,” WalMart CEO Doug McMillon said. “We’re moving faster to combine our digital and physical assets to make shopping simple and easy for customers. Our plan is gaining traction.”
Wal-Mart’s $3 billion procurement of the online merchant Jet.com additionally aided the firm boost shopping sales. Wal-Mart also got the Shoes.com domain and is utilizing it to advertise shoes from its Shoebuy.com Inc. subsidiary, which Wal-Mart got in January, simply a few weeks before Shoes.com ceased operating.
Retail bankruptcy watch list: Walmart’s growth is not just online
But Wal-Mart’s development isn’t all online. The firm stated sales at US stores open at the very least for a year, or same-store sales, grew by 1.4%, defeating analyst expectations of 1.3% and also marking the 10th consecutive quarter of same-store sales growth.
Retail bankruptcy watch list: What does your future look like?
Are you unhappy about the direction your debts are taking you? Is shopping putting you into financial ruin? Do you or your company not have enough cash flow to make it through another season? Is the stress of too much debt affecting your health and life?
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