Tag: chapter 11

SMILEDIRECTCLUB SHOCKING CHAPTER 11 BANKRUPTCY: THE IMPACT OF ONLINE-ONLY MODELS VS BRICK-AND-MORTAR RETAILERS

Post author By Brandon Smith
Post date October 9, 2023

SmileDirectClub introduction

“It’s clear the debtor needs this cash…”

– US Bankruptcy Judge Christopher Lopez, in approving the company’s request to borrow $20 million from its founders.

SmileDirectClub, an entity venturing into the realm of dental aesthetics, is an inventive and convenient avenue for the realignment of teeth. Established in the year 2014, the corporation has orchestrated a profound metamorphosis within the sphere of orthodontics, extending clear dental aligners directly to consumers via a digital conduit. Accumulating over a million contented customers, SmileDirectClub propounds an affordable and readily accessible alternative to the conventional metal braces and face-to-face consultations that have traditionally typified the orthodontic marketplace.

The marriage of their avant-garde technological prowess and the execution of treatment protocols from remote vantage points has elicited considerable resonance. This bespoke approach has elicited resounding acclaim and garnered favour amongst a diverse clientele. Committed to ensuring the contentment of their customers, their overarching mission revolves around democratizing the realm of orthodontic care, rendering it more within the reach of all.

Nevertheless, SmileDirectClub presently grapples with a quagmire steeped in legal and fiscal problems. It finds itself entangled in a myriad of legal complications, confronted by legal suits emanating from orthodontic practitioners and dental associations, amongst other allegations that include making unfounded promises. That and the turbulence in its fiscal standing changed its position from a risk of bankruptcy to the filing for Chapter 11 bankruptcy protection on September 29, 2023.

In this Brandon’s Blog, I engage in a comprehensive discussion I look at the problems ensnaring SmileDirectClub. Notably, I navigate through the intricate terrain of issues that, while not directly tethered to the ongoing litigation, cast a pall of uncertainty upon their operational model. These issues, I believe, are relevant for all enterprises, irrespective of whether they subsist exclusively in the digital world, operate with brick-and-mortar stores, or straddle the hybrid interface between these two realms.

Importance of the SmileDirectClub news

The news regarding SmileDirectClub‘s recent bankruptcy declaration and the looming prospect of liquidation, should a speedy buyer fail to materialize, holds immense significance. In days gone by, SmileDirectClub had garnered the reputation of a market disruptor within the dental domain, proffering in-home dental alignment solutions at a mere fraction of the conventional orthodontic treatment costs. Nevertheless, the company has found itself entangled in numerous operational dilemmas, thereby culminating in this rather lamentable predicament.

This piece of news assumes paramount importance because its repercussions transcend beyond just the purview of SmileDirectClub‘s workforce, investors, and suppliers. It concurrently begets inquiries regarding the sustainability of the direct-to-consumer healthcare paradigm. The outcome ensuing from this insolvency declaration shall indeed cast a profound and far-reaching influence, resonating not only with the company itself but the entire industry at large.

The SmileDirectClub journey from growth to legal battles and controversies

Indeed, SmileDirectClub stands as a true pioneer within the orthodontic teeth straightening service market, having carved an extraordinary path since its inception. Established back in 2014, the company embarked on a mission to revolutionize the conventional braces market, proffering the SmileDirectClub Aligners, being a more convenient customer journey for straighter teeth and a cost-effective alternative for teeth alignment. Their innovative smile journey approach hinged upon harnessing technology and directly delivering transparent custom aligners to customers via a digital platform, obviating the necessity for in-person visits to orthodontic specialists in their quest for a smile transformation.

Armed with this disruptive business model and a slew of astute marketing maneuvers, SmileDirectClub swiftly captured widespread attention and gained rapid momentum. It sprawled across the United States, establishing an array of SmileShops, and even ventured into broader markets on the international stage. However, the company now grapples with a disheartening predicament, propelled toward filing for bankruptcy protection by recent challenges.

SmileDirectClub‘s ascendancy within the market was marked by its offering potential customers a unique customer experience for their at-home teeth straightening solutions at prices within reach of many. By introducing this innovative concept, SmileDirectClub amassed a substantial customer base, skillfully tapping into the burgeoning demand for orthodontic treatments sans the customary in-person appointments. This groundbreaking business model propelled SmileDirectClub into boldly challenging the established order and reshaping orthodontic care.

Nonetheless, the company has since been entangled in a web of legal skirmishes and controversies, casting a long shadow over its present financial predicament. A deluge of lawsuits from dental boards and orthodontic practitioners has inundated SmileDirectClub, with allegations of being an unauthorized dental care practice providing dental services and oral care products, hanging ominously over its head.

These legal entanglements, apart from draining financial resources, have cast a pall of disrepute over the company. Furthermore, debates concerning the safety and efficacy of SmileDirectClub‘s products have sullied its reputation even further. These legal imbroglios and controversies have profoundly stifled SmileDirectClub‘s capacity to flourish and thrive within the market, ultimately culminating in its regrettable descent into Chapter 11 bankruptcy protection.

What is a Chapter 11 bankruptcy filing like the one done by SmileDirectClub?

A corporate bankruptcy reorganization under Chapter 11 of the United States Bankruptcy Code, commonly referred to as a Chapter 11 filing, is a legally binding process employed by a company to solicit protection from its creditors as it undertakes the restructuring of its debts and operations. This process is open to companies, enabling them to continue their operations while devising a plan to pay off their debts and regain profitability.

Through a Chapter 11 filing, companies can negotiate contracts, terminate unprofitable ventures, and reduce their debt. Furthermore, this mechanism empowers the appointment of a trustee to supervise the reorganization process and guarantee impartial treatment of creditors. Ultimately, a Chapter 11 filing represents a nuanced and strategic decision taken by companies in financial distress to recover stability and ensure long-term viability.

In Canada, we have the same kind of legislation. It is the debt settlement proposal proceedings found in Part III Division I of the Bankruptcy and Insolvency Act (Canada).

SmileDirectClub has announced that if it does not find a suitable buyer soon, it will have to liquidate its business and cease operations.

Retail issues highlighted by the SmileDirectClub experience

Interaction with a physical product

The importance of physical interaction in the realm of product shopping is undeniable. When it comes to certain items, relying solely on brand names and model numbers for evaluation falls short. The ability to touch, feel, and test these products before purchase is essential. While online shopping offers convenience, it simply cannot supplant the tactile engagement that physical interaction provides.

This holds particularly true for brick-and-mortar stores specializing in high-end furniture. Despite the convenience of online alternatives, these establishments not only survive but thrive, drawing customers who appreciate the significance of seeing and experiencing furniture in person. It’s abundantly clear that the value of physical interaction with products remains irreplaceable.

Recognizing the pivotal role of physical engagement, direct-to-consumer brands like Warby Parker and Third Love have adopted a hybrid approach by incorporating physical retail spaces into their business models. This strategic move enables customers to try on eyeglasses and lingerie before committing to a purchase. It underscores their comprehension of the enduring worth of the in-store experience.

The power of touch and feel

Certainly, there is an undeniable excitement that comes to consumers from physically interacting with and carefully examining potential purchases. This experience instills a strong sense of confidence, assuring that the product aligns perfectly with our expectations and needs. Moreover, it has the potential to foster a deeper connection with the brand itself, especially for items that heavily rely on sensory experiences like furniture, clothing, home decor and personal health items.

SmileDirectClub extends an offering of transparent aligners, providing an unconventional choice when compared to the traditional orthodontic method of braces. It presents a more economically viable and convenient avenue for the alignment of one’s teeth. Let’s delve into the intricacies of this process:

Evaluation

Interested individuals embark on their Smile for Life journey by engaging in a complimentary online assessment, aimed at ascertaining their candidacy for SmileDirectClub‘s aligner therapy treatment.

Aligner Treatment Plans

The dental team embarks upon the intricate task of crafting a tailored treatment scheme, meticulously derived from a three-dimensional portrayal of the patient’s dental structure. This lifelike depiction can either be procured through an on-site scan at a SmileShop or by utilizing an at-home kit to meticulously generate impressions.

Custom Treatment Plans and Aligners

Subsequently, the intricate process of crafting customized aligners commences, with all the aligners being produced and dispatched in one comprehensive shipment, entirely negating the necessity for regular office appointments. Oversight of the treatment unfolds remotely, overseen by a duly licensed dentist or orthodontist, who engages in a series of virtual check-ins throughout the patient’s journey.

Whitening Kits

As an added perk, SmileDirectClub generously incorporates a premium teeth whitening kit with lip balm as an integral component of their offering, with discernible results manifesting in as little as a week.

Sustaining the Transformation

Upon the completion of the treatment regimen, patients are afforded the opportunity to procure retainers, essential for the preservation of their newfound radiant smile. These retentive devices are judiciously worn exclusively during the nighttime hours.

It is hard to imagine being able to feel comfortable with and having all your questions answered for this innovation in healthcare products without being able to get customized customer service with only an online portal. SmileDirectClub must have felt that its online-only business model was lacking as they eventually tried to up their smile game by opening up SmileShops; physical locations. They were hoping that by stepping foot into a physical store and immersing themselves in the in-person smile-for-life shopping experience, consumers would eliminate the element of chance and be empowered to make a wise and well-informed decision in purchasing their teeth alignment product.

The role of product visualization

When engaging in the act of shopping, there exists an undeniable and unique allure associated with venturing into a traditional brick-and-mortar establishment. Such an endeavour unfolds as a sensory-rich treasure hunt, a distinctive experience that stands apart from its digital counterpart in the realm of online shopping. While the undeniable convenience offered by e-commerce transactions remains unchallenged, it regrettably falters in conveying the authentic essence of a product, especially something you are going to put into your mouth!

Photographs and textual descriptions, while serviceable to some extent, ultimately fall short of encapsulating the full breadth of sensory delights or gauging the product’s seamless alignment with one’s unique requisites. It is this very deficiency that imparts a special reverence to physical retail outlets among a significant cohort of shoppers, particularly those who belong to the older demographic stratum. These brick-and-mortar establishments afford them the golden opportunity to meticulously scrutinize the multifaceted attributes of a product, dissecting how harmoniously it integrates into the tapestry of their lives.

The sheer delight stemming from hands-on exploration and interaction with these items cannot be overstated. By opting for the in-person shopping odyssey, one emerges endowed with the ability to make judicious, well-informed decisions, leaving with the reassuring certitude that their chosen acquisition aligns with their desires and aspirations. This immersion in the realm of tactile sensations bestows upon the senses an abundance of gratitude, a token of appreciation for the palpable magic of touch and feel.

The role of personal assistance

Traditional brick-and-mortar establishments offer a distinct advantage with personalized additional assistance. Patrons can lean upon the expertise of well-informed sales associates who stand ready to engage, extending tailored guidance and recommendations aligned precisely with their idiosyncratic requirements and preferences. This reservoir of knowledge undoubtedly elevates the shopping encounter, be it through sage counsel on skincare regimens or the quest for that perfect pair of sunglasses.

The individualized approach characteristic of brick-and-mortar stores also ushers forth a more streamlined and convenient shopping experience. Sales associates adeptly pick up on the contours of a customer’s desires and can proffer apropos suggestions, facilitating an expedition that is both seamless and pleasurable. Such a degree of tailored service proves challenging, if not impossible, to replicate within the digital realms of online shopping.

While online retail undeniably champions convenience and efficiency, it behooves us to remain cognizant of the enduring significance of physical interaction in the realm of commerce. Consequently, brick-and-mortar stores persist in delivering a different experience that remains singular, indispensable, and intimately connected to the human experience.

SmileDirectClub: The importance of in-person consultations and treatment supervision

SmileDirectClub‘s core mission revolves around the noble aim of democratizing access to top-tier oral healthcare. The company achieves this by offering cost-effective and convenient solutions for teeth alignment, thereby bestowing countless individuals without the means to afford the cost of braces, to still be able to realize the smiles they’ve long yearned for. Nevertheless, the conspicuous absence of personalized support could feasibly be one of the pivotal factors that limited the firm’s growth and the increased costs of operating SmileShops may very well be part of the reason for the current operational and financial problems.

In the context of orthodontic treatments, such as the intricate art of turning bad teeth into straighter teeth, it stands as an imperative for a dental professional to possess the ability to meticulously oversee the trajectory of progress and enact requisite adjustments as the journey unfolds. In-person consultations grant the dentist the acumen to appraise the subtle nuances of teeth movement, ensuring impeccable alignment and swiftly addressing any exigencies that may surface during treatment. Without this intimate supervisory role, patients may find themselves ensnared in a series of suboptimal outcomes or unforeseen complications, potentially culminating in profound dissatisfaction, a far cry from their initial optimism.

A constraint by online-only business paradigms resides in the conspicuous dearth of the human factor within the domain of healthcare. The capacity to foster a personal rapport and sow the seeds of trust between patient and healthcare provider stands as an indispensable facet of delivering healthcare par excellence. In-person consultations, as juxtaposed with their virtual counterparts, provide the fertile ground for profound interactions wherein patients can freely pose queries and articulate concerns, forging a direct conduit to the attending healthcare provider.

Moreover, the presence of a healthcare practitioner serves as a wellspring of solace, particularly when the patient is confronted with a scenario necessitating a gentle touch or immediate attention. This irreplaceable human connection, steadfast and unyielding, eludes full replication even within the ambit of the most advanced technology.

What does the SmileDirectClub Chapter 11 bankruptcy filing teach us?

Once assessed at a staggering $9 billion in value, the SmileDirectClub teeth aligner company finds itself navigating the tumultuous waters of Chapter 11 bankruptcy a mere four years after its initial public offering. The precipitous descent of SmileDirectClub stands as a remarkable testament to the annihilation of capital on a grand scale. This entity, headquartered in the United States, and specializing in the distribution of affordable orthodontic teeth-aligning solutions, went public in 2019. It managed to raise $1.35 billion, thereby elevating its overall worth to a staggering figure approaching the $9 billion mark. This momentous financial maneuver, indeed, had the power to bestow billionaire status upon its founders.

Fast forward four years from this watershed moment, and we find the once-mighty corporation having filed for bankruptcy protection — its coffers depleted to a mere $5 million at the time of its bankruptcy filing. In a last-ditch effort to salvage their brainchild, the founders have injected $20 million while the company looks for a suitable suitor. Alas, if no saviour emerges within the ensuing two months, as indicated by the company’s chief financial officer, the entire operation shall be forced to liquidate and then shutter its digital (and physical) doors.

One might be inclined to attribute this unfortunate turn of events to a fortuitous convergence of ill-timed circumstances or perhaps an overzealous indulgence in the allure of rock-bottom interest rates. At the time of its initial public offering, the company, while experiencing robust growth, had yet to experience profitability. However, this promising trajectory was abruptly derailed when the global COVID-19 pandemic forced the company to close its physical retail outlets. This highlights the fact that at least for the SmileDirectClub orthodontic health product, an online-only business model is not viable.

Subsequently, its primary customer base—comprising individuals from modest to middle-income backgrounds who cannot afford the cost of braces, and who rely on financing for their orthodontic treatments, as long as they can pass the credit check —dramatically reduced their consumption of the company’s products.

The repercussions were swift and severe; sales plummeted, and in a desperate bid to engineer a turnaround, the company undertook a substantial debt burden. The sombre tale is best told through SmileDirectClub‘s issuance of $748 million worth of zero-coupon convertible notes. Initially, these notes were exchanged at a valuation of 100 cents per dollar during their introduction in early 2021.

However, within a single year, their value dwindled to a mere 40 cents on the dollar and currently hovers at approximately 1 cent on the dollar. To secure additional liquidity, the company even resorted to leveraging its accounts receivable and intellectual property assets, securing a loan to the tune of $255 million through the auspices of HPS Investment Partners in April of 2022. Presently, only $138 million remains outstanding on this loan, which accrues interest at a rate closely aligned with the interest rates imposed upon a significant portion of its customer base, specifically, 10.75% over a prevailing base rate.

The metaphorical sands of time now flow inexorably for SmileDirectClub and its extensive workforce, encompassing over 1,800 employees. In a poignant scene, the company’s founders made a virtual appearance during the initial bankruptcy hearing, presided over by US Bankruptcy Judge Christopher Lopez. In solemn silence, they witnessed the judge’s approval of their commitment to infuse $20 million into the ailing enterprise, perhaps serving as a final lifeline in their struggle for survival.

Potential for an orderly liquidation of the SmileDirectClub assets

Should specific conditions fail to materialize, particularly the emergence of a suitable buyer, the SmileDirectClub teeth aligner company has conceded that the sole alternative left is an organized liquidation. Under such circumstances, the company would be compelled to liquidate its assets and methodically bring its operations to a close. Nevertheless, there lingers a glimmer of hope within the company’s heart. It persists in its optimism that, buoyed by diligent reorganization endeavours and fortified by the unwavering backing of its founders, it can circumvent this dire denouement.

Time will tell.

SmileDirect Club conclusion

The SmileDirectClub‘s bankruptcy filing does prompt inquiries about the viability of exclusive online-only models within specific sectors. Nonetheless, it should not cast an all-encompassing shadow upon the collective influence wielded by digital-first enterprises. Rather, it underscores the importance of properly researching who your target market is, all regulatory issues that may hamper business success and having sufficient cash flow to build the business properly. SmileDirectClub learned early on that an online-only business model would not work and COVID-19 finished off its brick-and-mortar store side of its business.

Triumphant brands will undoubtedly be those that adeptly mould their operational models to align with the expectations of their clientele. Through such adaptability, they shall not only endure but flourish amidst the ever-evolving terrain of retail, continuously catering to the ever-evolving requirements of their clientele.

I hope you enjoyed this SmileDirectClub Brandon’s Blog. If you’re struggling with managing your overwhelming debt in this high-interest environment, don’t worry – there are some things you can do to take control of the situation. First, it’s important to create a realistic budget and track your expenses. From there, you can prioritize your debt repayment and make consistent payments to chip away at what you owe. It’s also a good idea to seek professional financial advice to help guide you through the process. Just remember, managing debt is a gradual process that requires commitment and determination, but you can do it! So don’t hesitate to reach out for help from financial professionals.

Individuals and business owners must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses with debt problems that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these financial health concerns. More significantly, we know the requirements of the business owner or the individual who has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

Brandon Blog Post

CCAA CANADA: OUR EXTRAORDINARY GUIDE TO 2020 TROUBLED CANADIAN COMPANIES SEEKING BANKRUPTCY PROTECTION

Post author By Brandon Smith
Post date August 10, 2020

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

If you would prefer to listen to the audio version of this Brandon’s Blog, please scroll to the bottom and click play on the podcast.

CCAA Canada introduction

We are now about 5 months into this COVID-19 pandemic since the state of emergency was announced in Canada. There has also been a lot of media coverage of the many negative effects it has had on Canadians and the Canadian economy. I thought it might be interesting at this point to do some review on CCAA Canada. Now I am not talking about the Canadian Collegiate Athletic Association. Rather, I am going to look at the companies that have so far filed for creditor protection under one of Canada’s insolvency statutes. The Companies’ Creditors Arrangement Act.

When a company tries to reorganize under CCAA Canada – What does CCAA mean?

When Canadian companies who owe more than $5 million experience financial problems, they might go to court to seek creditor protection, filing under the CCAA Canada. That’s federal legislation that primarily offers a company time to try to work out its financial troubles with those to which it owes money.

As I have written before in various Brandon’s Blogs, if the company owes less than $5 million it can file under the Part III Division I reorganization section of the Bankruptcy and Insolvency Act (Canada). Although it is the other Canadian federal insolvency statute and some procedures are more streamlined and handled slightly differently, the net effect is the same as the matters I explain below about the CCAA Canada.

What does CCAA Canada protection mean? CCAA vs Chapter 11

“Bankruptcy protection” is a term closely associated with a US company filing under Chapter 11 of the US Bankruptcy Code. That term has been adopted into the Canadian insolvency dialogue. In Canada, it most likely means that the Canadian company has applied to a Canadian court to look for protection from their creditors by filing under CCAA Canada.

A firm files under CCAA Canada for consent to come up with a restructuring plan strategy that would certainly provide it time to rearrange its financial affairs to make sure that it can keep operating.

As long as a CCAA order continues to be in place, creditors are not allowed to start or continue any kind of action to recover money owed to them. They can’t try to confiscate the firm’s property or try to petition it into bankruptcy, without the prior approval of the court. This is called the CCAA stay of proceedings.

Considering that a CCAA Canada filing is made because a business is deeply in the red, the initial order of business is to strike some kind of satisfactory arrangement with its creditors. That includes secured creditors, unsecured creditors and shareholders.

Can CCAA Canada protection be extended?

Yes, under CCAA Canada, court-ordered protection can be extended. After Algoma Steel filed under CCAA Canada in April 2001, the firm had gotten eight extensions prior to emerging with a new ownership framework.

Who gets priority under a CCAA Canada filing?

Not all creditors are treated equally. There is a priority generally established for the ranking of creditors and the order in which they might be paid by a debtor.

First in a CCAA Canada restructuring, will be any government claims that rank as a priority deemed trust claim. Next will be any new charges ordered by the court as part of the restructuring. Examples of such court-ordered security charges are Key Employee Retention Plans, financing the company needs in order to survive during the restructuring period and the costs of the professionals involved in the restructuring for the company.

Secured creditors, including lenders and bondholders, usually head the list next when it concerns getting back their money. Secured creditors might hold security such as a general security agreement and/or a mortgage as security for their debt held.

Unsecured creditors follow next on the list of creditors. Unsecured creditors have supplied goods or services on credit to the company without being given any security. In the many retailer filings that have been in the news recently, even customers who have paid deposits for items not yet picked up or who have gift cards are also unsecured creditors. Last on the list are the shareholders.

What happens if the court doesn’t approve a CCAA Canada application or the sides can’t agree on how to restructure debt?

If a restructuring effort is not successful, or if the court does not approve it, a company can be placed right into receivership or bankruptcy. The main difference between a CCAA Canada filing and the options of receivership or bankruptcy, suggests that the company can no longer be a going concern and will be liquidated.

The choice between receivership or bankruptcy depends on the nature and extent of the creditors. If there is a major secured creditor who is owed more than the assets are worth, on a failed restructuring, the court will allow that secured creditor to appoint a receiver (or the court will appoint the receiver). The receiver will then liquidate the company’s assets and repay the secured creditor as much as possible. If there are no secured creditors (which is highly unusual), or there will be money left over from the liquidation after full repayment of the secured creditors, then there will be bankruptcy. The licensed insolvency trustee acting as the bankruptcy trustee will make a distribution to the unsecured creditors.

Sometimes the type of company or industry will require both receivership and bankruptcy. Retail liquidations are a good example. The reasons are outside the main topic of discussion for this CCAA Canada Brandon’s Blog, but, one day, I will do one on that topic.

What happens to shareholders in a CCAA Canada restructuring?

Holders of common stock generally come last. On a regular basis in a CCAA Canada restructuring, they tend to get wiped out. Their old shares come to be worthless. Usually, brand-new shares are issued in the restructured company.

Holders of preferred shares rank ahead of common shareholders (for this reason the title “preferred”) yet more often than not do not get back the full value of their shares.

Public company shares in a company if it enters CCAA Canada protection and all trading is halted

When a public company announces that it has filed under CCAA Canada, a trading halt is applied. The listing exchange notifies the marketplace that trading is not taking place. While the stop is in effect, brokers are forbidden from publishing quotations or signs of interest in trading. The listing exchange will end the trading stop by taking the actions called for by its rules. Generally, the marketplace is alerted that a trading halt is about to end either at the same time the halt finishes or a few minutes before.

When a company gets on the edge of bankruptcy, its stock value mirrors the danger of a CCAA Canada administration becoming liquidation. Purely as an example, a business that used to trade at $50 might trade at $2 per share as a result of the bankruptcy environment. After entering into a CCAA Canada filing, the company’s stock price might be up to $2.10. This value is composed of the potential amount that shareholders might get after liquidation and also the possibility that the firm might restructure and run effectively in the future. Investors can buy and sell these $2.10 shares in the market. The actual value does not reach zero unless the likelihood of restructuring is so low that liquidation becomes a certainty.

While the company is in a CCAA Canada restructuring, its stock will certainly still have some value, though it will likely plummet. The regulatory authorities will watch it very closely and shut down trading if any anomalies are encountered where investors could get hurt. This was recently seen in the United States in the Hertz Chapter 11 bankruptcy protection administration.

Nonetheless, if the business restructures and emerges from CCAA Canada reorganization as a solvent going-concern, its share price might start to rise again. How much will depend on the unique restructuring issues. If a business rises from its restructuring stronger than ever, investors can take advantage of the turnaround, as old stock may get cancelled during the insolvency process, and new shares issued.

List of CCAA filings under CCAA Canada during the COVID-19 pandemic so far?

There have been many media reports about companies filing under CCAA Canada during this coronavirus pandemic. I thought it would be useful to look at which companies have filed and what industries seem to be most affected between the calling for the state of emergency and the last date for which these statistics have been published, July 31, 2020. All of this information comes from statistics published by the Office of the Superintendent of Bankruptcy Canada.

The number of companies and the industries that these companies engage in is allocated as follows:

Cannabis	6
Charity	1
Construction	4
Energy	4
Entertainment	1
Hospitality	1
Manufacturing	1
Media	1
Mining	2
Pulp and Paper	1
Real Estate	2
Retail	8
Technology	1
Travel	1

	34

The following chart shows the filings by the province in this same time frame:

ccaa canada graph

CCAA Canada summary

I hope you enjoyed this CCAA Canada Brandon’s Blog. The Ira Smith Team family hopes you and your family are staying safe, healthy and well-balanced. Our hearts go out to every person who has been affected either through inconvenience or personal family tragedy.

We are all citizens of Canada and we have to coordinate our efforts to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Family members are literally separated from each other. We look forward to the time when things can return to something close to normal and we can all be together again physically.

Ira Smith Trustee & Receiver Inc. has always employed clean and safe habits in our professional practice and continues to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. Should you take advantage of the CEBA? I say a resounding YES!. I just wanted to highlight all of the issues that you should consider.

If anyone needs our assistance, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

Are you now worried just how you or your business are going to survive? Those concerns are obviously on your mind. This pandemic situation has made everyone scared.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

Brandon Blog Post

COMPANY BANKRUPTCIES: A USEFUL TOOL TO SHOWER EXECS WITH BONUSES?

Post author By Brandon Smith
Post date July 27, 2020

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would rather listen to the audio version of this company bankruptcies Brandon’s Blog, please scroll to the bottom and click on the podcast.

Company bankruptcies introduction

Company bankruptcies have been in the news during 2020. The ones that got the most attention were large US retailers filing for Chapter 11 bankruptcy protection, their Canadian subsidiaries filing for restructuring or pure Canadian retailers who needed to file.

In the United States, almost one-third of 40 big firms seeking U.S. bankruptcy protection during the coronavirus pandemic awarded bonuses to execs within a month prior to filing their cases, according to a Reuters evaluation. Eight companies, consisting of J.C. Penney and Hertz, approved the bonuses as few as five days before seeking bankruptcy protection.

In this Brandon’s Blog, I discuss why this happened and look at could it happen in Canadian bankruptcies cases.

The role of a Key Employee Retention Plan (***KERP) in company bankruptcies***

A KERP is not a new concept in company bankruptcies. KERP refers to an advantage strategy utilized by a debtor company in a bankruptcy situation as incentives to upper management to stay working for the business throughout the bankruptcy. The purpose of this KERP is to help in the retention of particular essential qualified and competent executives of the company and its subsidiaries, by providing a retention bonus offer for such employees in return for their continued employment during the restructuring of the business in bankruptcy protection.

The KERP intends to maintain qualified officers, employees, and directors of the company and its subsidiaries upon whose judgment and effort the company depends upon for the successful conduct of its business. It is expected that providing such persons with a direct stake in the firm’s successful restructuring will assure a more direct alignment of their interests with those of the business and have them working on the company’s behalf throughout the entire financial restructuring. In this way, senior management and key personnel are incentivized to keep their employment with the company throughout its restructuring and not leave for a new opportunity.

So if KERP is normal, why pay out big bonuses ahead of time?

This phenomenon is unique to company bankruptcies restructurings in the United States. So far, it has not been applied directly to Canadian insolvency filings. The main reasons are the legislation and because of the supervisory role and practices of the courts.

KERPs have long caused objections that companies are enriching execs while cutting jobs, stiffing creditors and wiping out shareholders. In March, creditors filed a claim against previous Toys R’ US executives and directors, accusing them of misdeeds that consisted of paying out such rewards days before its 2017 bankruptcy filing. The company liquidated in 2018, terminating 31,000+ workers.

An attorney for the execs and directors stated the benefits were warranted, given the added work and stress on senior executives, as Toys R’ US had wanted to remain in business after its restructuring. As we all know, the restructuring failed and the company was liquidated.

United States legislation in 2005 needed execs and other company insiders to have a competing job offer in hand before getting retention bonus offers through a bankruptcy protection administration. That forced companies to design new means to pay the bonuses.

After the 2008 financial crisis, firms frequently proposed bonuses in bankruptcy court, casting them as incentive plans with goals execs have to satisfy. Courts mostly accepted the plans, ruling that the performance benchmarks placed the payment past the purview of the limitations on retention incentives. The plans, nonetheless, sparked objections from creditors calling them KERPs in disguise.

At some point, companies discovered they could avoid analysis entirely by approving benefits before insolvency filings. US Bankruptcy Trustees have no power to stop bonuses paid even days prior to company bankruptcies.

Why big bonuses are not paid out on the eve of company bankruptcies in Canada

As I mentioned earlier, the treatment of KERPs is really directed by the supervision of the court. A large Canadian bankruptcy protection filing that might involve a KERP is done under the Companies’ Creditors Arrangement Act (Canada) (CCAA). The Canadian legislation and therefore the decisions of the courts in Canada are different than in the United States.

A financial restructuring under the CCAA is a collaborative effort in Canada. It is not as adversarial as in the USA. In a Canadian CCAA restructuring, a Monitor is appointed by the court. The Monitor to a large extent is the “eyes and ears” of the court. The process is that the Monitor acts as a supervisor over the company’s affairs in restructuring and also acts as a mediator between the various stakeholders. The court places a high degree of reliance on the Monitor’s recommendations. The court also expects its Monitor to be in the middle of all important matters and make thoughtful and pragmatic recommendations.

In Canada, the legislation does not directly address the issue of a KERP. Rather, the court will review the terms of a KERP put before it for approval. The court expects that:

Hard evidence will be put before it to show why the KERP is required and will aid in the company restructuring.
Why the employees for whom it is being recommended qualify.
The court will want to see that the KERP was negotiated, that key stakeholders had input, and there is not a “one size fits all” plan for all the employees.
Rather, individual employee characteristics have been taken into account.
The Monitor has been involved in the discussions and is recommending it to the court with reasons.

The proper use of an appropriately-calibrated reward plan is evident:

Company bankruptcies cause staff members now in an insecure position to be prey to competitors able to provide the possibility of a stable and solvent workplace to people whose natural very first top priority is caring for their households.
There is a danger that the top and mobile employees will certainly be cherry-picked while the company in a restructuring might discover itself significantly handicapped in attempting to attract competent senior staff.
Sometimes a restructuring can result in a court-supervised sales process. Employees might commonly find themselves being asked to bring all of their skills and devotion to the task of making themselves unemployed.
Considering that many employers use a mix of base pay and profit-based motivations, company bankruptcies causing a restructuring may put greater demands on key staff including covering for associates who have been laid off or who have actually left for greener fields.

The main factors considered by the court being asked in company bankruptcies to approve a KERP

The main factors a court considers during company bankruptcies are:

Whether the Monitor recommends the KERP agreement and the cost.
For the senior staff to which the KERP is being recommended, how realistic is it that they would seriously consider various other work choices if the KERP was not approved?
Is the continued employment of the senior staff members for which the KERP is being recommended is essential for the security of the business and to boost the performance of the overall restructuring?
Each employee’s background with and expertise in connection with the debtor.
Any problems in replacing each of the senior staff for the employees to which the KERP would apply.
Were the KERP agreement and its cost authorized by the board of directors, including the independent Monitor, as the business judgment of the board needs to not be disregarded?
Is the KERP agreement and charge approved or consented to by secured creditors of the borrower (who might very likely end up paying for it)?
Are payments under the KERP payable upon the conclusion of the restructuring process or are milestones built in that may or may not be realistic.

These are the major issues that the court needs to consider when determining whether or not to approve a KERP. As you can see, in company bankruptcies in Canada resulting in a CCAA restructuring, the issues the court must consider are many. So far, business sense has prevailed in Canada not requiring the shenanigans now taking place in US bankruptcy restructuring cases.

Company bankruptcies summary

I hope you have found this company bankruptcies Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Tags Bankruptcy, bankruptcy protection, CCAA, chapter 11, chapter 11 bankruptcy, chapter 11 bankruptcy protection, Companies’ Creditors Arrangement Act, company bankruptcies, coronavirus pandemic, Ira Smith Trustee, kerp, Key Employee Retention Plan, toys r us

Brandon Blog Post

HOW HERTZ TEACHES US MODERN AND RISKY RULES OF BUSINESS BANKRUPTCY IN CANADA AND THE USA

Post author By Brandon Smith
Post date June 8, 2020

The Ira Smith Team is fully operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.

If you would prefer to listen to the audio version of this business bankruptcy in Canada and the USA Brandon’s Blog, please scroll to the bottom and click play on the podcast.

Business bankruptcy in Canada Introduction

Late in the day on Friday, May 22, 2020, Hertz Global Holdings Inc. (Hertz) filed for Chapter 11 bankruptcy in Delaware. The filing gives Hertz some breathing room to operate its business. During this time, Hertz also needs to come up with a business turnaround plan and a debt restructuring plan that creditors can support. The movement of Hertz stock last week teaches us some modern and risky rules of business bankruptcy in Canada and the United States.

Corporate bankruptcies and the Hertz investors

Hertz stock closed on the NASDAQ exchange on May 22 at US$2.84. It dipped to a low of US$0.40 on May 26. Legendary investor Carl Icahn sold all of his Hertz shares at an average price of $0.72. He dumped his 39% stake in Hertz at a loss of nearly $2 billion. Last Friday Hertz shares closed at US$2.57 per share. This morning, the trading touched US$3.40 per share.

So Hertz is up handsomely since May 26. Hertz has filed for bankruptcy protection. It doesn’t make sense that investors should be pushing the stock up. Hertz is selling off its fleet and further depressing the used car market. So far there is no indication that a business plan and debt reduction plan has been developed, let alone accepted by the creditors.

As far as assets, they have locations and a database of customers. But every major rental car company also has locations and a database. Whenever business and leisure travel resumes to pre-COVID-19 levels, if you can’t rent a car from Hertz you will rent it from a different company. So what are the non-fleet assets worth?

So on the surface, the investor money finding a home in Hertz stock and pushing up the stock price doesn’t make sense. So, are there savvy investors getting into Hertz or are they all just following the herd and will all end up losers?

Why Hertz filed for Chapter 11 bankruptcy protection

Since 2014, Hertz has had four different CEOs. It is difficult to develop and implement a cohesive business strategy with such turmoil in the senior management ranks. As the coronavirus pandemic brought travelling to a sudden halt, Hertz suffered dramatically as a mass of its revenue depended on business travellers and vacationers renting vehicles when arriving at their destination airport. Nobody knows how long it will take until travel gets back to where it was and what Hertz needs it to be.

Hertz’s debt has been increasing as it invested heavily in its vehicle fleet. They may have also missed the mark in the mix of vehicles consumers want, requiring it to take on even more debt to make further fleet purchases. Hertz could no longer afford to make the interest payments on its debt load. At the time of its bankruptcy filing, Hertz had US$1 billion of cash and US$13 billion of debt.

The $13 billion in financing Hertz made use of to acquire its fleet of 500,000 automobiles. The financing was done via what is known as asset-backed securities. These are connected straight to the value of the vehicles. When the value of the cars drops, Hertz must make up the difference in cash within about three months, unless values rebound before that time.

However, with the coronavirus pounding the brakes on the economy and eliminating employment for so many, the drop in the value of used vehicles is expected to remain that way for a long time. Hertz knew that it could not make up the difference to its lenders when they made a demand, which was their right. Hence the bankruptcy filing.

The modern risky rules of investing in business bankruptcy in Canada and the USA

Normally, in a public company restructuring, it is not only the creditors that take a hit. Shareholders usually get a good drubbing. Share values fall and new shares are issued to raise capital. This further dilutes the holdings and value of those holdings for shareholders. But investors must believe that Hertz will come back. How else can you explain the surge in the share price?

Before this year, the company had ten consecutive quarters of positive growth. They were still losing money, just not as much. Investors must believe that Hertz will be able to survive. They must believe that the company although leaner and smaller, this is the time to jump on an opportunity to make money.

I am not a financial advisor, I am not saying whether this is a good or bad investment. It certainly is a very risky one. All I am saying is that as a licensed insolvency trustee (formerly called a trustee in bankruptcy) administering business bankruptcy in Canada, this does not make any sense to me.

I guess only time will tell if these investors pushing up the stock price are insightful risk-takers or losers. Carl Icahn doesn’t believe it.

Business bankruptcy in Canada and the USA summary

I hope you have found this business bankruptcy in Canada and the USA Brandon’s Blog helpful.

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.

Tags Bankruptcy, bankruptcy filing, bankruptcy protection, business bankruptcy, business bankruptcy in canada, carl icahn, chapter 11, chapter 11 bankruptcy, company restructuring, corporate bankruptcies, covid-19, Hertz, Ira Smith Trustee, licensed insolvency trustee, restructuring, trustee in bankruptcy

Brandon Blog Post

THE TORONTO CORONAVIRUS EXTRAORDINARY PLAN TO BUSINESS RECOVERY

Post author By Brandon Smith
Post date May 27, 2020

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.

Introduction

For businesses having a hard time enduring the Toronto coronavirus pandemic, insolvency may very well be the outcome. General insolvency filings were down in April, this is mainly because everyone has a built-in stay of proceedings right now.

Banks, credit card companies and collection agencies are not making a name for themselves right now during the Toronto coronavirus lockdown by harassing people who cannot afford to pay their regular monthly payment. However, that will not last too long.

In this Brandon’s Blog, I discuss options available to the entrepreneur if the Toronto coronavirus lockdown and quarantine wreaks havoc on your business.

Telltale signs from the United States

We have already seen the variety of companies that submitted to Chapter 11 insolvency. They did so in order to attempt to reorganize their financial obligations while trying to stay in business. This has been especially true for the large retail business sector. Their business problems were not caused by COVID-19. However, the pandemic merely accelerated where they were heading anyway.

The American Bankruptcy Institute reported that Chapter 11 filings in April 2020 represent a 26% boost from April 2019.

I have previously written about Modell’s Sporting Goods and Pier 1. Now we can add Neiman Marcus, JCPenney and J.Crew. Outside of the retail sector, Hertz Car Rental, Gold’s Gym, Foodora and Virgin Australia are also recent restructuring filings. I also really believe that it won’t be long before the floodgates open up to subject an excess of small firms looking for relief from their financial problems, in North America and the rest of the world. That is probably obvious to you, it really can’t be called a Toronto coronavirus news update!

Entrepreneurs are doing whatever they can

I have definitely noticed an uptick in telephone calls from people scared about their personal situation and from worried business owners in the past 4 weeks. They aren’t all set to throw in the towel right now. They are attempting to do whatever they can through the shutdown to stabilize their company. So for now, they are trying to take advantage of various federal government programs to help them stay afloat. The programs include:

Canada Emergency Wage Subsidy (CEWS)
Temporary 10% Wage Subsidy
Business Credit Availability Program (BCAP)
Canada Emergency Business Account (CEBA)
Large Employer Emergency Financing Facility (LEEFF)
Canada Emergency Commercial Rent Assistance (CECRA)

However, the people I am talking to are also realists. They all understand that if what they are doing now doesn’t work, they will either have to try to restructure the company or have it go bankrupt. So for now, there is somewhat of a pause in remedies such as distraints, repossessions, terminations of leases and financial institution collections.

The moratorium won’t last forever

Right now the Canadian federal government is taking the lead. They have extended timelines for filing income tax and HST returns and paying amounts owing. They have also extended certain relief programs from their original expiration date of June 30. Right now, subject to a further extension, of course, it looks like the feds are shooting for September 30 to end the COVID-19 assistance programs.

Ultimately, the patience for non-payment being shown right now by landlords and creditors won’t last permanently. I expect business bankruptcy protection and bankruptcy filings to climb after the “all clear” is sounded on this Toronto coronavirus state of emergency and the government assistance ends. The pent up collection activity will go into full flight.

The floodgates will open. I expect one of the worst offenders to be the Canada Revenue Agency (CRA). There will be so many companies in default of their tax payment obligations. The government is spending trillions of dollars to prop up the Canadian economy. Those programs will have to be paid for and all the IOU’s will be called in.

It seems that everybody I have spoken with is simply waiting until this Toronto coronavirus period quiets down. The pool of business problems is overflowing right now.

Corporate bankruptcy is not the only option for a company battling its financial demons. There are going to be three categories of insolvent companies:

Those who are too small and it just does not make sense for them to do anything other than paying the employees their final salary, wages and vacation pay. Then file their final corporate and income tax files. Then, turn the key in the door and walk away.
A company that has just a few creditors and all or some of the business operations remains viable. They can negotiate with their creditors for a reduction in each amount owing on a creditor by creditor basis. The reason this does not work if there is a large group of creditors is because of human nature. Everyone is worried that the next person is getting a better deal. By the time you get the last person to say yes, the first person may have changed their mind. There is no way to independently satisfy all the creditors that nobody is getting a better deal. In reality, some are getting a better arrangement than others. It will be based on the negotiation ability of the creditor and how essential maintaining the supply of their product or service from them is.
Businesses where all or some of their operations remain viable. However, the company can only survive if it can chop off the sick parts and eliminate however much debt they need to so that the newly restructured company is solvent.
Companies with complex issues needing to assign their assets to a licensed insolvency trustee through a bankruptcy or whose secured creditor will enforce on their security by appointing a receiver, either a private receiver or court-appointed receiver.

Toronto coronavirus induced restructuring

If you anticipate your entire business or certain business units will remain viable but require relief from its creditors and debts, the first look at restructuring. This route enables a company to stay functioning while renegotiating its financial obligations. This process includes looking critically at all business units and determining how operations can be made more efficient in order to improve profitability. Many hard decisions will have to be made.

Companies have two choices in Canada for restructuring. For the larger restructurings, the kind that you read in the newspaper, the restructuring statute is the Companies’ Creditors Arrangement Act (Canada) (CCAA). In order to qualify for restructuring under the CCAA, the company has to owe its creditors at least $5 million.

All other companies restructure under the Bankruptcy and Insolvency Act (Canada) (BIA) restructuring provisions. It is called Part III Division I of the BIA. Regular readers of Brandon’s Blog will know that I have written several blogs before on aspects of both the CCAA and restructuring under the BIA.

In my blog, BANKRUPTCY EXPERTS WEIGH IN ON US & CDN SMALL BIZ RESTRUCTURING, I lamented the fact that the Canadian insolvency system does not have a streamlined restructuring process for smaller companies. We have the consumer proposal restructuring under the BIA for smaller personal insolvent debtors trying to restructure.

The United States has the Small Company Reorganization Act (SBRA) of 2019, also known as “Subchapter 5”. The SBRA is aimed at simplifying restructuring procedures for small companies by boosting efficiency, lowering costs, and easing the restructuring plan confirmation process. I believe this would be a great addition to the Canadian insolvency system. It may very well move some companies from my #1 category listed above into #3.

There is no sense dwelling any longer on what we don’t have. The Toronto coronavirus news today has affected so many companies. Many will just not survive. Others will be able to come out of the other side of this Toronto coronavirus pandemic but will need major surgery to stay alive.

The first step for any entrepreneur is to get professional advice in order to strategize and make a decision on what plan to put into place. You should speak either to a licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee) or a lawyer who has experience in insolvency matters.

Most licensed insolvency trustees will provide a one-hour no-cost strategy session.

You need to understand whether or not you have a viable business and company. Then, you need to have a sensible plan to increase your chances of success based on the viability analysis.

Both Ira and I have been doing many such strategy sessions over the telephone and video meeting since the Toronto coronavirus self-quarantine lockdown came into effect. I know that we will be doing many more as the city and the province begin to open up.

The goals of the entrepreneur have to be the driving force. For example, if the entrepreneur is adamant about staying in business, then you have to hope that business viability can be proven so that the likelihood of a successful restructuring is enhanced. On the other hand, if you can prove business viability but the entrepreneur has had enough and wants out, then you look at the restructuring and sale of the viable business parts.

Once viability is established, then a restructuring plan can be developed. The restructuring will take place either under the BIA or CCAA. Depending on the circumstances and the goals of the entrepreneur, either a refinancing of the restructured company of a sale of the business is part of any restructuring plan.

Business not viable

If the business is not viable, then pure restructuring is not possible. However, that does not mean that the assets that form the business unit cannot be used by someone else to efficiently run the business. I am not just talking about hard assets. Things such as patents, trademarks, processes, experienced workforce and the customer base before they go off to find a new supplier are all valuable parts of a business.

Perhaps the tangible and intangible assets can be sold to someone that can bring them into their existing operation and run the business profitably. Jobs can be saved also if this were to happen.

When this is the case, then you are into some form of liquidation. A secured creditor will move for the appointment of a receiver. As I have written before on this topic, the appointment can either be by way of a private appointment or an application to the court for a court-appointed receiver.

If there are no secured creditors, the security taken is invalid, or there are other factors that make a bankruptcy necessary, then the company can assign itself to bankruptcy. It isn’t every day you find this, but in a recent corporate bankruptcy filing that I am administering, I found that the security of the purported secured creditor was invalid as against us as Trustee.

Then either the receiver or Trustee can take possession of the assets, run a well-advertised and managed sales process and hopefully find a buyer for the assets to comprise all or many parts of the operating business. If such a buyer does not exist, then it will be a straight liquidation of individual assets. Obviously, higher values can be achieved when selling what amounts to a business rather than just individual assets in a liquidation.

Personal guarantees and director liabilities

In any corporate or business insolvency, the exposure of the directors has to be taken into consideration. This is not Toronto coronavirus news. It is normal for entrepreneurs to have to give a personal guarantee to a lender in addition to the security taken. Such a guarantee can be backed up by specific personal assets as collateral, or be an unsecured guarantee. Or, an entrepreneur has to indemnify the landlord as part of the corporation leasing premises.

Directors also have certain liabilities under provincial or federal law. Generally, directors will have personal liability for:

Unpaid salaries, wages and vacation pay.
Unremitted source deductions.
HST/GST that has been collected but not paid over to CRA.
Any other liability that a director has personally guaranteed.

The exposure of directors must be recognized and taken into account in any restructuring attempt.

Toronto Coronavirus Summary

Businesses all over will look different due to the Toronto coronavirus pandemic and lockdown. The current environment is unprecedented and is teaching all of us things we have never seen before.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. This is especially true these days.

If anyone needs our assistance, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. During this Toronto coronavirus state of emergency, we are doing telephone consultations and/or virtual conferences that are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Stay healthy, well balanced and safe and secure everyone.

Tags Bankruptcy, bankruptcy trustee, BIA, CCAA, chapter 11, court appointed receiver, covid-19, Ira Smith Trustee, licensed insolvency trustee, pandemic, receiver, restructure, restructuring, toronto coronavirus, toronto coronavirus news, toronto coronavirus news today, toronto coronavirus news update, trustee

Brandon Blog Post

INSOLVENCY TRUSTEE TORONTO NEWFANGLED COVID-19 BUSINESS RESTRUCTURING PLAN

Post author By Brandon Smith
Post date April 16, 2020

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

Introduction

The COVID-19 pandemic has upended our world. Everyone is scared, has many questions and there is a lot of misinformation out there. So many businesses have shut down and do not know if they will ever be able to start up. As a licensed insolvency trustee Toronto, I fully understand the fear and panic that has set in.

First, I hope you and your family are safe and healthy. The purpose of this Brandon’s Blog is to show a newfangled business restructuring approach that recently occurred in the United States. As far as I can tell, there is no reason why this kind of restructuring plan could not work in Canada also.

Modell’s Sporting Goods, Inc. et al Chapter 11 bankruptcy proceedings

On March 12, 2020, U.S. Bankruptcy Court District of New Jersey Judge Victor Papalia issued the Order approving the Chapter 11 bankruptcy protection application of Modell’s Sporting Goods, Inc. and related companies (Modell’s) filed on March 11.

Modell’s is America’s oldest, family-owned ran store of sporting products, athletic footwear, active clothing and fan gear. It was founded in 1889 by Morris A. Model. The initial Modell’s store was located on Cortlandt Road in lower Manhattan, New York City. Four generations of the Modell household have run and grown the family company into a chain of over 150 stores throughout the Northeast.

Mitchell Modell, the company’s CEO and President said the company’s poor financial performance resulting in the Chapter 11 bankruptcy protection filing was because of many reasons, including:

unseasonably warm winter season;
six fewer days in the shopping season this year between Thanksgiving and Christmas;
competition from Amazon;
the futility of NYC’s sports franchises business like the Knicks, Jets and Giants has not helped either; and
the coronavirus pandemic

I personally doubt the losing records of the local sports franchises was a reason for Modell’s failure. How many years were the Toronto Maple Leafs awful but you always saw lots of Leaf fans with jerseys, caps and flags?

The novel court Order

On March 27, 2020, the Honourable Justice Papalia granted Modell’s court application making an order providing for both a bankruptcy suspension and an operational suspension. The bankruptcy suspension froze the bankruptcy protection proceedings until April 30, 2020 (the Suspension Period). The operational suspension, allows Modell’s to shut down all stores and not operate. The judge also gave Modell’s the right to apply on short notice to the court to extend the Suspension Period. The order went on to state the stay of proceedings is in effect during the suspension.

Novel times call for novel solutions. As part of their application, Modell’s filed a modified budget to indicate what sources of cash it would have and what expenditures it would pay during the Suspension Period. It also indicated what expenditures were being incurred, but not paid. Commercial rent on all of its stores was one of the items being accrued, but not paid.

The reason Modell did not include any commercial rent payments in its modified budget was simple. They had to close down all of their stores as a result of the coronavirus pandemic. Stores closed means no sales. They were not going to pay rent on stores that were not generating cash.

The court order approved the modified budget. It also confirmed that the only payments that Modell’s would make were those indicated as essential. The company deemed payments to all of its landlords as non-essential. The court order did indicate that the accrued but unpaid expenditures were not and were not deemed to be waived or not payable at some time.

Pier 1 Imports took a page from the Modell playbook

In February 2020, Pier 1 Imports, Inc. (Pier 1) filed for Chapter 11 bankruptcy protection as part of looking for a buyer of its operations. It then closed all of its stores in Canada and many in the United States.

On Tuesday, March 31, 2020, following the Modell’s precedent, sent a request to the U.S. Bankruptcy Court for the Eastern District of Virginia to temporarily stop paying commercial rent on its retail locations along with certain payments to suppliers, shippers, and distributors.” Pier 1 has now had to shutter all of its shops as a result of the COVID-19 outbreak.

Judge Kevin Huennekens throughout the hearing provided approval of these activities while allowing for it to be reassessed each month. Judge Huennekens additionally provided authorization to hold off on any motions anyone other than Pier 1 may wish to file up until at the very least 45 days after Pier 1 returns to normal operations and payments.

Could this happen in Canada?

So the question is, could an insolvency trustee Toronto help a company get this newfangled Modell’s/Pier 1 precedent happen in a Canadian bankruptcy protection restructuring? Right now landlords are reeling from their commercial tenants telling them that rent for April is not going to be paid due to the business closures. No doubt this will be the same story for every month that the closures continue.

Most landlords should be willing to work with their tenants. The reason behind the non-payment is from forces outside of everyone’s control. But what if a commercial landlord plays hardball. Can a Canadian company file for bankruptcy protection in Canada and obtain a Court order approving the non-payment of rent?

The two corporate restructuring statutes in Canada are the Part III Division I section of the Bankruptcy and Insolvency Act (Canada) (BIA) and the Companies’ Creditors Arrangement Act (CCAA).

There are no express provisions in either statute to invoke a bankruptcy or operational suspension. In fact, the opposite is true. In either a restructuring or liquidation, rent is calculated on a per diem basis for as long as the company in a restructuring or the insolvency trustee Toronto in a corporate bankruptcy, is using the premises. Fairness is part of the Canadian insolvency landscape. There are years of cases on this issue and they all end up the same. If you are in occupation, the rent must be calculated and ultimately paid.

However, there are two similar sections in each of the BIA and CCAA. Section 183(1) of the BIA reads as follows:

“183 (1) The following courts are invested with such jurisdiction at law and in equity, as will enable them to exercise original, auxiliary and ancillary jurisdiction in bankruptcy and in other proceedings authorized by this Act…”.

The words “auxiliary and ancillary” has been interpreted by the courts to mean that the bankruptcy court in each province has the jurisdiction to sanction and authorize all acts required to be done for the proper administration of the Canadian insolvency system. This holds whether it is a bankruptcy protection filing or outright bankruptcy.

The CCAA offers more flexibility in a bankruptcy protection corporate restructuring than the BIA does. In general, the Court will reach its decisions in a CCAA restructuring on the basis of fairness and reasonableness. The court needs to be concerned that what is being proposed is not illegal and there are cogent reasons as to why what is being proposed serves to benefit all or the majority of creditors affected by the restructuring.

The CCAA, therefore, offers more judicial discretion than the BIA. Courts err on the side of giving the CCAA statue a large and liberal interpretation. The court supervising a CCAA restructuring will exercise its equitable jurisdiction. The application of equitable jurisdiction can be interpreted to mean equity considers done what ought to be done.

The judge in a CCAA bankruptcy protection case overseeing the CCAA proceeding is in a unique position. He or she is in the best position to determine whether or not an agreement should be suspended in the face of overly aggressive creditors who if allowed to act, would upend the entire CCAA process. Finally, Section 11 of the CCAA allows a judge to “…make any order that it considers appropriate in the circumstances.”.

So, to answer the question as to whether a Modell’s or Pier 1 type order could be made under a BIA or CCAA corporate restructuring in Canada, my answer would have to be yes. It is possible. I don’t believe it could be gotten on a regular basis, but, in this COVID-19 pandemic world, I can see it being obtained in the face of an aggressive and uncooperative commercial landlord. It would, of course, be uncommon, but these are unique times.

So the answer for a large Canadian retailer facing an unreasonable and aggressive landlord when the commercial rent is not being paid may be to file for bankruptcy protection under either the BIA or CCAA, as appropriate.

Insolvency trustee Toronto summary

The Ira Smith Team family hopes you and your family are staying safe, healthy and well-balanced. Our hearts go out to every person who has been affected either through inconvenience or personal family tragedy.

Ira Smith Trustee & Receiver Inc. has always employed clean and safe habits in our professional practice and continues to do so.

Are you now worried just how you or your business are going to survive? Those concerns are obviously on your mind. This pandemic situation has made everyone scared.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

Tags Bankruptcy, Bankruptcy and Insolvency Act, BIA, CCAA, chapter 11, chapter 11 bankruptcy protection, commercial rent, Companies’ Creditors Arrangement Act, coronavirus, corporate restructuring, covid-19, insolvency trustee toronto, Ira Smith Trustee, licensed insolvency trustee Toronto, modell's, pier 1, restructuring

Brandon Blog Post

BOY SCOUTS OF AMERICA BANKRUPTCY: THE EXTREME SIDE RARELY SEEN

Post author By Brandon Smith
Post date February 24, 2020

If you would prefer to listen to an audio version of this Boy Scouts Of America Brandon’s Blog, please scroll to the bottom of this page and click on the podcast.

Introduction

The Boy Scouts of America has filed for Chapter 11 bankruptcy protection, according to court files in Delaware bankruptcy court. The filing was done early on Tuesday, February 18, 2020. All of it began with one man in 2010.

The purpose of this Brandon’s Blog is to define the issues that caused this insolvency filing and to answer whether there ever was a similar type of bankruptcy protection filing under the Canadian insolvency system.

It all started with Kerry Lewis

In 2010, Kerry Lewis, a Portland Oregon man, won a lawsuit against Boy Scouts of America. Lewis was a sexual abuse victim. A jury found the Boy Scouts of America must pay $18.5 million in punitive damages for the abuse he experienced in being continuously molested by a Scout leader in the 1980s. Because of the bankruptcy protection filing, rather than potentially having their day in court, plaintiffs with unpaid judgements, and also alleged victims who have pending legal actions, will now need to file claims bankruptcy court.

The Boy Scouts of America have applied for bankruptcy protection, after being barraged by hundreds of sex-abuse lawsuits. Over 12,000 children are believed to have been sexually abused by Boy Scouts volunteers.

The Boy Scouts of America is the largest scouting organization and one of the largest youth organizations in the United States, with about 2.3 million youth participants and about one million adult volunteers. They have actually been encountering decreasing membership as well as thousands of lawsuits, with many more prospective legal actions yet to be filed. They are now dealing with new claims of sexual abuse from about 800 men throughout the country, according to attorneys representing them.

Why the Boy Scouts of America filed for bankruptcy protection

The Boy Scouts of America invested massive amounts of time as well as cash on litigation rather than protecting the children– with virtually 3,000 hidden child molesters only the Scouts know about. In a statement to National Public Radio, the Boy Scouts of America said it is working with experts and explored all options available. They think this insolvency filing will certainly be the best way they can meet their social and moral obligations to equitably treat victims who experienced abuse throughout their time in Scouting.

They went on to say that their strategy will also make certain that it will allow them to continue to perform their goal to serve young people, families and regional communities through their programs.

The issue of troop leaders sexually assaulting Scouts has tormented the Boy Scouts of America for decades. It is just now that the weight of the newer accusations and lawsuits has ended up being too much to deal with without the Chapter 11 filing.

The national organization of the Boy Scouts of America is the only entity involved in the Chapter 11 filing. The national company has created a method that intends to safeguard its local scouting councils and also the billions of dollars in properties they hold. They believe that maintaining those assets out of the reach of sexual-abuse claims is the only method to make certain that Scouting will be able to proceed in America.

That is a crucial concern. Will the Boy Scouts of America be able to shield the assets of the regional councils, which possess camps and properties in prime real estate throughout the nation. Many are claiming the Boy Scouts of America cannot be changed. Under the Chapter 11 filing, they will be able to continue its operations, and all the current claims will be put on hold.

The bankruptcy protection plan

The Boy Scouts of America are urging victims to come forward after the 110-year-old organization filed for bankruptcy protection in the first step toward dealing with a barrage of sexual abuse lawsuits. They are creating a plan, so they can capture all lawsuits yet to be filed and be able to afford to pay off thousands of still-uncompensated sex abuse victims. The filing is also an effort to stop thousands of sexual abuse claims ending up being litigated in court.

I do not think that this legal maneuver will stop survivors from stepping forward and beaming light on the criminals as well as the terrible actions of the abusers concealed by the organization. Nonetheless, sufferers will now only have access to a pool of funds to be assigned for that objective. At the initial bankruptcy hearing, the Boy Scouts of America still have actually not shared the names of the perpetrators with the general public in spite of laying out a four-point strategy with transparency as the first point!

Jeff Anderson, whose law firm has represented Scout abuse survivors for decades believes the Boy Scouts of America is using the filing to keep the names of predators a secret. “I don’t believe that this legal maneuver by the Boy Scouts of America will stop survivors from coming forward and shining a light on the perpetrators and perilous practices hidden by the organization,…” said Anderson.

The Boy Scouts of America have filed for bankruptcy protection in hopes of working out a possibly massive victim payment plan for sex abuse victims. Across the country, they have already mortgaged major properties to get a line of credit. Specifically, the national organization of the Boy Scouts of America has initiated a voluntary financial restructuring to ensure they can equitably compensate all victims of past abuse in our programs, through a proposed Victims Compensation Trust.

Public tax records show the Boy Scouts of America has more than $1 billion in assets, not including the balance sheets of local chapters. They have yet to disclose what size the Victims Compensation Trust will be.

The effect of the filing

Speculation swirled over whether the Boy Scouts of America will continue to exist in its existing organization or whether smaller teams will be formed to carry on its mission. They are establishing an approach, so they can catch all claims yet to be submitted and likewise have the ability to settle thousands of still-uncompensated sex abuse sufferers. The bankruptcy protection filing is also an approach to stop countless sexual abuse claims winding up being prosecuted in court.

The Mormon church, a long supporter of the Boy Scouts of America, has already announced that they are ending their connection, after more than 100 years of a close relationship. If successful, the plan will ensure that they will be able to continue to carry out their mission to serve youth, families and local communities through their programs.

The intriguing question is, will attorneys for victims try to pierce through the national organization and claim that all the local councils are not really independent. Or, is the independence on paper only? Is it truly a vertically integrated company that exercises considerable impact over the local councils? Only time will tell if any of the abuse victim lawyers pursue this path to attempt to increase the size of the Victims Compensation Trust.

So, the Boy Scouts of America’s insolvency strategy is the same as USA Gymnastics and the Catholic diocese. Can victims of such sexual abuse ever really be compensated? The organization in some form will move on, but sufferers will live with their pain and their scars probably forever. They will certainly most likely lose their personal voice in their search for justice because of the bankruptcy filing. This will rob sufferers of an important part of the healing process.

Is there a Canadian statue to restructure like this?

The answer is yes. Although there are two federal insolvency regimes in Canada, the only one that should be used for a very large corporate restructuring like this one is the Companies’ Creditors Arrangement Act (CCAA). The CCAA is the Canadian equivalent to Chapter 11 of the US Bankruptcy Code. It is a Canadian federal law allowing insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs.

The closest Canadian example where the CCAA was used to compensate victims that I can think of is the CCAA filing of the Canadian Red Cross Society. It needed to restructure as a result of some $8 billion of tort claims being asserted against it (and others, including governments and hospitals). The claims were by a large number of people who suffered tragic harm from diseases contracted as a result of a blood contamination problem that has haunted the Canadian blood system since at least the early 1980s.

Summary

I hope you have found this explanation of the Boy Scouts of America issues informative. The Ira Smith team is available to help you at any time. We offer sound advice and a solid plan for Starting Over Starting Now so that you’ll be well on your way to a debt-free life in no time. For more information on a no-cost basis please visit our website or call us.

Does your company have many lawsuits filed against it? Will the cost of all that litigation, let alone the amount of any judgements issued against your company, too much for your company to survive? Those costs and the massive debt cries out for a debt restructuring? Would not it be great if you could do a turn-around?

The Ira Smith Team understands how to do a debt restructuring. More notably, we understand the requirements of the business owner or the person who has too much individual debt. Because you are dealing with these stressful financial issues, you are anxious.

It is not your fault you can’t fix this problem on your own. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will get you or your business back on the roadway to healthy and balanced worry-free operations and end the pain points in your life, Starting Over, Starting Now.

Tags Bankruptcy, bankruptcy protection, boy scouts of america, boy scouts of america bankruptcy, Canadian insolvency system, CCAA, chapter 11, chapter 11 bankruptcy, chapter 11 bankruptcy protecton, Companies’ Creditors Arrangement Act, insolvency, Ira Smith Trustee, kerry lewis

Brandon Blog Post

FILING BANKRUPTCY IN CANADA: RETAILER BANKRUPTCIES AND CO-TENANCY

Post author By Brandon Smith
Post date July 15, 2019

If you would prefer to listen to an audio version of this filing bankruptcy in Canada Brandon’s Blog, please scroll to the bottom and click on the podcast.

Introduction

I read one article and one legal case over this past weekend that gave me the idea for this Brandon’s Blog about filing bankruptcy in Canada. The article was about the large US jewelry and accessories retailer Charming Charlie’s filing Chapter 11 bankruptcy for the second time in just over a year. In its 2018 filing, the retailer shed almost half of its 400 stores in a restructuring. Unfortunately, that was not good enough to save them. They have now filed again and announced they are closing their remaining stores.

The case I read is Old Navy (Canada) Inc. v. The Eglinton Town Centre Inc., 2019 ONSC 3740 (CanLII). This decision of the Ontario Superior Court of Justice was released on June 21, 2019. This case involves a retail tenant’s right to put into play rights it has as a result of a co-tenancy requirement under its commercial lease.

What Is Co-Tenancy Provision?

Simply put, a co-tenancy clause in retail lease agreements permits retail tenants to reduce their lease payments if key renters or a specific variety of lessees leave the retail premises. The idea being that certain tenants are major draws to a shopping centre and produce traffic for themselves and the other tenants. Those types of tenants are called anchor tenants.

A retail tenant agrees with the landlord to specific lease terms, especially the amount of rent to be paid. The commercial tenant agrees to those terms expecting a certain level of traffic in the mall or shopping centre. If anchor tenants leave, a co-tenancy provision allows a tenant to decide if it wishes to remain or not. If it decides to stay, then the lower amount of rent to be paid when a co-tenancy provision comes into play is meant to compensate the tenant for the lower traffic volume.

The Players

Old Navy is a famous retailer of clothes. It runs stores throughout Canada, the United States, and worldwide. Old Navy is a subsidiary of Gap Inc. (GAP), which is headquartered in San Francisco, California. Old Navy’s operations and stores are owned and operated by GAP.

GAP is the biggest specialty retailer in the USA. It has roughly 3,700 locations globally, consisting of 240 shops in malls and strip/power centres throughout Canada. GAP also owns the Banana Republic brand. Of the three, Banana Republic is taken to be on the top end of the GAP household of brand names, while Old Navy is the reduced level, affordable or budget brand name.

The landlord, The Eglinton Town Centre Inc., is owned and run by Lebovic Enterprises, a major Canadian property developer with its head office in Toronto, Ontario. Among others, it owns and runs the “Power Centre”, situated at Eglinton Opportunity East (the Centre).

The Old Navy Canada Lease

The Old Navy Canada lease, of course, had many terms in it. It included a co-tenancy provision. The clause named the key retailers (Key Shops) and their square footage. The Key Shops are the following retailers with the flooring area indicated:

Key Shops	Square footage
Cineplex	68,000 sf
Roots	6,545 sf
Globo Shoes	12,084 sf
Danier Leather	6,548 sf

Although the co-tenancy clause had various alternative remedies in it, all of them are not essential for you to know for the purpose of this Brandon’s Blog.

It is important for us to know that the co-tenancy section consisted of three main parts: (i) the number of Key Shops; (ii) a gross leasable area test; and (iii) a requirement for the landlord to advise the tenant in writing when a co-tenancy failure has actually happened.

Simply put, if the co-tenancy provision kicked in Old Navy Canada had the option to either:

Shut down its store and leave on proper notice to the landlord; or
Remain and pay a lesser “Alternate Rent” for the period that the co-tenancy issue remained unresolved.

The Danier Leather bankruptcy

Danier Leather (Danier) was a prominent Canadian seller of leather clothing and related leather items. The landlord entered into a lease with Danier for a preliminary 10-year term from June 10, 1999, to June 9, 2009. Danier’s lease was renewed in 2009 and Danier continued to be a renter of the Centre up until 2016. Danier’s premises of 6,548 square feet of space was out of a total of 285,425.37 square feet of gross leasable area in the Centre. Danier’s retail outlet represented just 2.3% of the gross leasable area.

Danier was a public company. Its shares were traded on the Toronto Stock Exchange. Nonetheless, public filings showed that Danier had been battling financial issues since 2014. Decreased earnings and yearly losses were unfortunately now its norm.

The negative operating results were thought to have been attributable to a change in the preferences of the buying public. There was a sentiment among some people to stop wearing leather items and apparel. On February 4, 2016, Danier submitted a Notice of Intention to File a Proposal (NOI) under the Bankruptcy and Insolvency Act, R.S.C., 1985 c. B-3.

Certainly, Danier’s insolvency was major news in the retail market. It was publicly reported in the nationwide media. At the time of the NOI filing, Danier operated 84 stores throughout Canada. Every one of the shops was leased. Ultimately, nonetheless, Danier determined not to submit a proposal and instead made an assignment in bankruptcy. A receiver was also appointed over Danier to liquidate the shops. Danier continued running until July 2016.

Definitely, every one of the occupants at the Centre, including the local staff of the Old Navy shop, would have recognized that Danier was conducting a going out of business inventory sale. It was unclear if anyone from Old Navy Canada told this to its senior management at the GAP.

Throughout the duration of the closing of the Danier outlet, the various other retailers at the Centre were growing. The Centre’s construction had long been completed and was well over 90% rented at the time of Danier’s insolvency. Cineplex was drawing audiences daily. The remaining stores in the portion of the Centre in which the Old Navy shop was located, across the parking area from the Danier outlet, were all operating. There was no proof they were not operating well and profitably.

The Dispute

The landlord believed that the closure of Danier had no material impact whatsoever on traffic at the Centre or on Old Navy’s sales. Given its interpretation of the co-tenancy requirements, the landlord ruled out that a co-tenancy failing had actually occurred. Therefore it did not provide any notice to the Old Navy care of GAP.

By September 15, 2016, GAP asserted they had ultimately found out about Danier’s filing bankruptcy in Canada. Thus, Old Navy issued a Notice of Co-Tenancy Failure to the Landlord and took the view that:

Danier’s bankruptcy constituted a “co-tenancy failure” under the lease;
that the landlord had breached the lease by not advising Old Navy of Danier’s bankruptcy; and
that Old Navy was, as a result, exercising its “right” under the lease to pay the lesser rent to the landlord, retroactive to May 1, 2016.

The landlord argued that the Centre was in co-tenancy failure as a result of the closure of Danier and stated that if the current lease was not paid, the landlord would declare Old Navy Canada to be in default under the terms of the lease.

Various communications took place between lawyers for the landlord and Old Navy Canada. The landlord also kept them up to date on discussions it was having with various potential retailers that would be interested in either the Danier space or larger premises. One such retailer was a global party supply store chain. Another, that ultimately entered into a lease and began operating in the Centre, was a retailer of pets and pet products.

Old Navy Canada, through its parent the GAP, took the position that only a retailer of upscale clothing like Danier was, would be a suitable replacement. It also stated that it had a corporate policy not to be located in shopping centres that had a pet retailer as a tenant.

It turns out that assertion was untrue. The landlord produced evidence that there is a power centre in the west end of Toronto where the opposite is true. That centre was the Stock Yards Village, where the anchor was Target Canada until it failed several years ago. There is an Old Navy store operating in that shopping centre along with a PetSmart retail outlet. This contradicted Old Navy Canada’s and the GAP’s position on suitable co-tenants.

The landlord and Old Navy Canada continued to agree to disagree. Old Navy Canada continued to pay the normal rent but under protest. Ultimately, Old Navy Canada launched the litigation against the landlord looking for reimbursement of rent that it asserts to have actually overpaid to the Landlord.

The Court’s decision

The Court went through a complex analysis of legal precedents that are beyond the scope of this Brandon’s Blog. After careful consideration of the lease, the issues involved and precedent case law, the Judge decided:

Old Navy’s interpretation of the provisions of the lease for the co-tenancy requirements is rejected.
He accepted the landlord’s interpretation of the relevant terms as being the most objective.
GAP/Old Navy’s evidence which was speculative.
It was not sensible for GAP/Old Navy to anticipate to be able to occupy the facilities for the rest of its lease term without paying proper rent, merely because of a technical issue that had no noticeable effect on its operations.
The landlord acted throughout in a commercially reasonable way.

Summary

What this case shows is that the bankruptcy of a retailer may very well invoke co-tenancy rights. However, it is not the bankruptcy that is the determining factor. Rather, it is the terms of the co-tenancy clause and its formulas contained in the clause that we have to look to. As seen in this example, the breach was not just because one of the Key Shops no longer operated. The terms of the Old Navy Canada Lease also forced a gross leasable area calculation to be performed. If the gross leasable area test was not met, then there was no breach.

Is your company experiencing financial problems? Are you on the brink of insolvency just like Danier was? Don’t wait until it is too late to properly restructure your company’s financial affairs. You don’t have to be another one filing bankruptcy in Canada.

As a Trustee, we are the only professionals licensed, authorized and supervised by the federal government to offer insolvency advice and to implement solutions under the Bankruptcy Act Canada. We will help you to select what is best for you to free you from your debt issues.

Call the Ira Smith Team today so we can eliminate the anxiousness, tension, discomfort and pain from your life that your cash problems have caused. With the unique roadmap, we develop just for you, we will promptly return you right into a healthy and balanced problem-free life.

Tags anchor tenant, Bankruptcy, Bankruptcy and Insolvency Act, chapter 11, charming charlie's, co-tenancy provision, danier leather, filing bankruptcy in canada, insolvency, insolvent, Ira Smith Trustee, Office of the Superintendent of Bankruptcy, retail, Target Canada, trustee

Brandon Blog Post

SOMETIMES EVEN A BONA FIDE SHARK NEEDS BANKRUPTCY AND INSOLVENCY HELP

Post author By Brandon Smith
Post date April 8, 2019

If you would prefer to listen to the audio version of this bankruptcy and insolvency Brandon’s Blog, please scroll to the bottom and click on the podcast.

Bankruptcy and insolvency: Introduction

Not every innovation that is seen on The Shark Tank is bound to be one of the very best. Among the winners, Fizzics is a machine that makes use of sound waves that improve the taste and quality of a beer. Not even a Shark can stop its company from being driven to bankruptcy and insolvency Chapter 11 bankruptcy protection. This proves that often an ingenious and fantastic invention being marketed with the assistance of a Shark might not truly interest people.

bankruptcy and insolvency

Fizzics was seen on the season 8 première of The Shark Tank. The judges, in spite of the early skepticism, accepted this pitch. It currently seems to be backfiring in a huge way. The idea of making a bottle of beer taste better, just like a draft beer from the tap, isn’t a silly way to invest your time. But a better tasting beer is a big luxury. Many people may check out is the brand-new shiny plaything on the block. It is something wacky and cute but not completely effective or needed.

What is difference between bankruptcy and insolvency in Canada?

What is insolvency? – Individuals are considered to be insolvent when they are not able to pay the financial debts they owe their creditors on their respective due dates. If you become insolvent, you might choose to declare bankruptcy, or you could handle your financial debts with other options such as a consolidation loan or a debt settlement consumer proposal.

Insolvency and bankruptcy are 2 terms that are often very closely associated when discussing debt. However, they have very different meanings. Insolvency describes an economic state. It is when you cannot afford to pay your debts when due. If you liquidated all of your assets, there would not be enough money to pay off all your debts in full.

What is bankruptcy? – Bankruptcy is a legal process. It means that a creditor has gone to court and obtained a Bankruptcy Order to place a person or company into the legal status of bankruptcy. Or, the person or company has filed an Assignment in Bankruptcy. The Bankruptcy and Insolvency Act (BIA) is the Canadian bankruptcy law legislation regulating all administrations of the BIA in Canada.

The various kinds of insolvency proceedings under the BIA are:

corporate bankruptcy;
personal bankruptcy; either a summary administration bankruptcy or an ordinary administration.
consumer proposals;
Part III Division I Proposal; and
receiverships.

Canadian BIA insolvency proceedings and bankruptcy proceedings can only be administered by licensed insolvency trustees (formerly called trustees in bankruptcy). The short form for a trustee in bankruptcy is now LIT, licensed insolvency trustee (Trustee). Trustees are licensed and supervised by the Office of the Superintendent of Bankruptcy (Canada) (OSB) which is part of Industry Canada. The OSB is responsible for the administration of bankruptcies in Canada.

Bankruptcy and Insolvency: Does the consumer really need it?

Eventually, these types of ideas are those that often tend to seem like the most effective thing since sliced bread. Their shiny brand-new finish tends to subside promptly given the expense of creating them. Even tougher, is finding a large enough market of people who truly intend to quit the dependable and old ways to carry out something. The uniqueness will swiftly wear away. The equipment will then come to be a chunk of scrap that is most likely to rest on the counter and seldom gets used. That might seem unkind, however, usefulness and need to at some point seem to divide the wheat (or barley) from the chaff!

So Fizzics, for all that it is able to do, turned out to be not the sort of device that has the ability to make a great deal of sense in a business setting. It is just for home-usage. In a bar, people go to consume alcohol and socialize. They are not there to wait on a number of sound waves to make their drink preference taste and look better. If they want a draft beer, they will order from the tap. If they want a bottled beer, that is what they will order.

For home usage, it is an excellent novelty. Everyone has their favourite beer. People anticipate it to taste the way they know it too – straight out of the bottle or can.

The Fizzics Business: The Sharks bit and invested money

Philip Petracca and his partner, David McDonald, made it to ABC’s “Shark Tank” in 2016, offering beer to a hesitant panel. They eventually turned most of the judges into followers. Lori Greiner and fellow Shark Mark Cuban agreed to spend $2 million into Fizzics for a consolidated 16.67 percent equity. Fizzics attained its objective of expanding its selling networks.

With the help of the Sharks, Fizzics entered Target, Best Buy, Brookstone, on Amazon, and several other areas– including Bed, Bath & Beyond. They have been reviewed in many renowned publications, and on several websites such as Yahoo! Tech as well as CNet. The Fizzics beer-making device was called absolutely nothing short of a wonder.

They increased their patented modern technology and generated a much more portable item called the Fizzics Waytap. Beer fanatics were still going crazy about the original dispenser in magazines.

On March 12, 2019, Fizzics Group, Inc. applied for Chapter 11 bankruptcy in Delaware under the United States insolvency and bankruptcy code. It reported assets of between $100,000 as well as $500,000 and debts of between $1 million and $10 million (based on contingencies and disputed claims). Time will tell if the business can be reorganized and saved, or if the remaining product inventory will end up in the clearance area!

Bankruptcy and insolvency: Do you need help?

I hope you enjoyed this Fizzics Shark Tank bankruptcy and insolvency blog. Do you or your business have excessive debt? Are you having an issue making your month-to-month expenses? Is your company handling its financial obstacles something you simply can’t figure the way out of? Are you looking for a business restructuring plan or an individual debt negotiation plan?

If so, call the Ira Smith Team today. We have years and generations of experience helping people and companies seeking financial restructuring or a debt settlement strategy. As a licensed insolvency trustee, we are the only specialists recognized, accredited and supervised by the Federal government to give insolvency advice and remedies to assist you and to prevent bankruptcy.

Call the Ira Smith Team today so you can end the stress and anxiety financial problems create. With the special roadmap, we will develop with and special to you, we will promptly return you right into a healthy, balanced hassle-free life.

You can have a no-cost appointment to assist you so we can fix your debt troubles. Call the Ira Smith Team today. This will certainly allow you to make a fresh start, Starting Over Starting Now.

Tags Bankruptcy, bankruptcy and insolvency, bankruptcy protection, chapter 11, chapter 11 bankruptcy, chapter 11 bankruptcy protection, counter fizz, Debt, Fizzics, fizzics bankruptcy, fizzics shark tank, insolvency, insolvency and bankruptcy, insolvency and bankruptcy code, Ira Smith Trustee, shark tank

Brandon Blog Post

PERSONAL BANKRUPTCY CANADA FAQ: VIDEO – PERSONAL BANKRUPTCY FAQ CANADA

Post author By Brandon Smith
Post date May 16, 2018

Personal bankruptcy Canada FAQ: Introduction

Last week I provided you with my infographic, video and blog to give you information on the Canadian corporate bankruptcy Canada process. I focussed on how an incorporated business files for a voluntary bankruptcy in Canada. This week, I want to describe how an individual files for voluntary bankruptcy. I also want to answer what I have found to be the personal bankruptcy Canada faq. So look at the infographic and watch the video below. Feel free to read in more detail below the video.

Personal bankruptcy Canada faq: Personal bankruptcy process in Canada

One of the most asked questions is “What is the bankruptcy process in Canada?”. Last week our infographic and video described the corporate bankruptcy process in Canada. This week’s video describes the personal bankruptcy process in Canada.

VIDEO – Personal bankruptcy Canada faq

Personal bankruptcy Canada faq # 1 – How do I recognize if I am in financial trouble?

If you are having difficulty paying your debts or have actually quit paying them altogether then you are in financial difficulty. Call an expert, a government qualified trustee to check your choices for reducing your debt and eliminating your stress and pain.

Personal bankruptcy Canada faq # 2 – Is bankruptcy my only alternative to get relief from debt?

The short answer is no; there are other options. You should always start first with a free consultation with a licensed insolvency trustee (LIT or Trustee). A LIT is a private party licensed by Industry Canada to carry out the restructuring and liquidation rules under the Canadian Bankruptcy and Insolvency Act (BIA). The LIT will discuss options with you to first avoid bankruptcy. These options include:

Bankruptcy does not deal with debts such as home mortgages, vehicle loan, spousal support or child support. Debt settlement firms try to bargain with your lenders to lower the amount owing. They also prepare a payment plan for you to settle the debt; they do not “erase your debt”.

The Canadian government is in the process of implementing new rules to curb the activities of some debt settlement companies. Some of them charge you for reviews that a licensed insolvency trustee performs for free. They also sell you products you don’t need, under the guise of helping you improve your credit score.

Personal bankruptcy Canada faq # 3 – I have actually seen advertisements from Debt Settlement firms stating they could erase my debt without making use of a Trustee in bankruptcy. Just how does that work?

They don’t and their ads are misleading. If you first have a free consultation with a LIT, you will learn that a number of choices available to you that include yet are not restricted to debt reduction including a consumer proposal.

Understand that these debt settlement firms are not licensed trustees. Eventually, they stop charging you for things a LIT would do for free. Then they ultimately hand you over to a LIT for either a consumer proposal or bankruptcy. You could have just gone to see a professionally licensed Trustee to start with!

Personal bankruptcy Canada faq # 4 – Do I get approved for bankruptcy?

You qualify for individual bankruptcy in Canada if you are financially troubled, insolvent and owe greater than $1,000.

Personal bankruptcy Canada faq # 5 – Should I file bankruptcy?

Without the detailed information of your unique circumstance, that decision cannot be made. Get In touch With Ira Smith Trustee & Receiver Inc. for a complimentary no commitment session so you will understand your options for ending your debt pains, Starting Over, Starting Now.

Personal bankruptcy Canada faq # 6 – If I declare bankruptcy, will I lose my house and car?

There are certain claims that are not released by your discharge from bankruptcy. Examples are home mortgages and car loans, if you choose to keep them. It comes down to what is your equity in those assets. The answer to that question and your ability to cash-flow those debts will be the determining factor. There is a list of items that are exempt from seizure. Call Ira Smith Trustee & Receiver Inc. to find out more.

Personal bankruptcy Canada faq # 7 – Once I file bankruptcy, exactly what occurs to the money I owe?

Once you declare bankruptcy you will be required to surrender certain non-exempt assets to the Trustee. These assets will then be sold and the money earned from the sale of the assets distributed among your creditors.

Personal bankruptcy Canada faq # 8 – Even though I have not located work in my field, I still owe on my student loans. Will my bankruptcy get rid of that debt?

Is your date of bankruptcy within 7 years of when you discontinued to be a full or part-time student? If so, your student loan debt will not be released by your discharge from bankruptcy. In particular instances, you could be able to apply to the court for a discharge of your student debt obligations under the “hardship provision”.

Personal bankruptcy Canada faq # 9 – What takes place to my salary or wages throughout a bankruptcy?

Salaries and wages are not influenced by bankruptcy. However you will need to complete an Income and Expense Form noting your household earnings as well as costs. This becomes part of your budgeting procedure. If your earnings goes beyond specific requirements developed by the Office of the Superintendent of Bankruptcy (OSB) (“surplus income”), you will be required to pay part of the surplus income into the bankruptcy estate through the trustee.

Personal bankruptcy Canada faq # 10 – Canada Revenue Agency has actually frozen my bank accounts and has a garnishee with my employer on my earnings. Just how can I stop all that?

If you have filed personal bankruptcy, personal income tax debt is an unsecured debt. As soon as you’ve declared bankruptcy or made a consumer proposal, Canada Revenue Agency (CRA) cannot start or continue taking any kind of enforcement activity versus you, consisting of wage garnishment or freezing your assets. Your Trustee will alert CRA once you file. The LIT will also advise both CRA and your bank and employer that any enforcement activity against you for your debt cannot continue.

Personal bankruptcy Canada faq # 11 – Will I still owe loan after I state bankruptcy?

Maybe, due to the fact that bankruptcy does not cover secured lenders – home mortgages, auto loan, student loans (if it is less than 7 years given that you discontinued to be a full or part-time student). It also does not cover certain other debts:

penalties or fines enforced by the court;
spousal support;
child support; or
debts arising from fraud.

Personal bankruptcy Canada faq # 12 – How long will I be bankrupt?

The time you spend in bankruptcy will depend on whether this is a first or 2nd bankruptcy and if you have surplus income. Get In touch with Ira Smith Trustee & Receiver Inc. to find out more.

Personal bankruptcy Canada faq # 13 – Who will know that I have declared bankruptcy?

As soon as you declare bankruptcy your Trustee will tell your creditors, CRA, and the Superintendent of Bankruptcy. The two Canadian credit bureaus, Equifax and TransUnion, obtain filing records from the Superintendent of Bankruptcy, so it will be on your credit report.

Bankruptcy filings are a public document. On top of that particular personal bankruptcies, those with non-exempt assets estimated to realize more than $15,000, need an ad in the “legal” section of a local newspaper.

Personal bankruptcy Canada faq # 14 – How will bankruptcy influence my credit score ranking?

An individual that files bankruptcy gets the lowest credit score ranking. Details of your bankruptcy that influences your credit report is inevitably eliminated many years after your discharge from bankruptcy.

Personal bankruptcy Canada faq # 15 – What does a LIT/Trustee do?

A Trustee is an individual or company licensed by the OSB to carry out mandates under the BIA such as bankruptcy, proposal, consumer proposal, summary administration bankruptcy and business reorganizations. A LIT is an officer of the Court. The Trustee has a duty of care for the rights of both the debtor and the creditors.

The LIT also makes certain that the legal rights of the insolvent/bankrupt are not abused.

Here is a listing of standard steps taken by a Trustee:

Reviews and counsels debtors on available alternatives
Prepares official documentation that is both filed with the OSB and used to tell creditors
Ensures the validity of creditors’ claims
Ensures that debtors are provided with mandatory counselling and access to mediation services if there is a dispute about any income they are required to contribute
Sells the debtor’s assets, except those exempt from seizure by provincial and federal laws, and hold the proceeds in trust for distribution to creditors
Administers the bankrupt estate from beginning to end
Assesses the debtor’s conduct both before and during a bankruptcy, as well as the cause(s) of the bankruptcy; and
Arranges for (and if necessary reports all the above to the Court) for the bankrupt’s application for a discharge (in the case of personal debtors)

Personal bankruptcy Canada faq # 16 – How do I pick the ideal Trustee?

Make an appointment for your free consultation. Meet with the Trustee and ask any questions you might have about alternatives to bankruptcy, consumer proposal, debt settlement/restructuring, bankruptcy and/or the bankruptcy procedure. Get a feel for not only the answers you receive, but how interested does the Trustee seem in you as a person. Can you see yourself relating well to that person. Does the Trustee make you feel comfortable and the type of person you want to work with.

If not, consult with a different Trustee firm and repeat the procedure until you find a Trustee that you really feel comfy working with.

Personal bankruptcy Canada faq # 17 – Is my spouse/partner impacted by my bankruptcy?

Your partner/spouse will not be financially affected by your bankruptcy unless they have co-signed a debt or own assets jointly with you. A creditor could pursue your spouse/partner for any debt that they have co-signed for. This includes a mortgage on your jointly owned home.

Personal bankruptcy Canada faq # 18 – How will my bankruptcy impact my present divorce case?

In Canada, the bankruptcy process does not interfere with the majority of the divorce proceeding. The Trustee will stand in the shoes of the bankrupt spouse when it comes to the rights for either the equalization payment or the division of property. All issues about spouse and child support and child custody issues carry on as if there was no bankruptcy at all.

Personal bankruptcy Canada faq # 19 – What is Chapter 7?

Chapter 7 is not applicable in Canada. It is the liquidation section of the U.S. Bankruptcy Code, the federal law governing bankruptcy in America.

Personal bankruptcy Canada faq # 20 – What is Chapter 11?

Chapter 11 is not applicable in Canada. It is the corporate restructuring section of the U.S. Bankruptcy Code, the federal law governing bankruptcy protection in America.

Personal bankruptcy Canada faq – What Now?

I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a person in financial difficulty. If caught early enough, we can get involved in a debt settlement restructuring program for you.

The Ira Smith Team knows that you are worried because you are facing significant financial challenges. The stress placed upon you is enormous. We understand your pain points.

Contact the Ira Smith Team today. We know how to solve your financial challenges, remove your pain and put things back on a healthy path. Contact us today for your free consultation so that we can save your life, Starting Over Starting Now.

personal bankruptcy canada faq

SmileDirectClub introduction

Importance of the SmileDirectClub news

The SmileDirectClub journey from growth to legal battles and controversies

What is a Chapter 11 bankruptcy filing like the one done by SmileDirectClub?

Retail issues highlighted by the SmileDirectClub experience

Interaction with a physical product

The power of touch and feel

Evaluation

Aligner Treatment Plans

Custom Treatment Plans and Aligners

Whitening Kits

Sustaining the Transformation

The role of product visualization

The role of personal assistance

SmileDirectClub: The importance of in-person consultations and treatment supervision

What does the SmileDirectClub Chapter 11 bankruptcy filing teach us?

Potential for an orderly liquidation of the SmileDirectClub assets

SmileDirect Club conclusion

CCAA Canada introduction

When a company tries to reorganize under CCAA Canada – What does CCAA mean?

What does CCAA Canada protection mean? CCAA vs Chapter 11

Can CCAA Canada protection be extended?

Who gets priority under a CCAA Canada filing?

What happens if the court doesn’t approve a CCAA Canada application or the sides can’t agree on how to restructure debt?

What happens to shareholders in a CCAA Canada restructuring?

Public company shares in a company if it enters CCAA Canada protection and all trading is halted

List of CCAA filings under CCAA Canada during the COVID-19 pandemic so far?

CCAA Canada summary

Company bankruptcies introduction

The role of a Key Employee Retention Plan (KERP) in company bankruptcies

So if KERP is normal, why pay out big bonuses ahead of time?

Why big bonuses are not paid out on the eve of company bankruptcies in Canada

The main factors considered by the court being asked in company bankruptcies to approve a KERP

Company bankruptcies summary

Business bankruptcy in Canada Introduction

Corporate bankruptcies and the Hertz investors

Why Hertz filed for Chapter 11 bankruptcy protection

The modern risky rules of investing in business bankruptcy in Canada and the USA

Business bankruptcy in Canada and the USA summary

Introduction

Telltale signs from the United States

Entrepreneurs are doing whatever they can

The moratorium won’t last forever

Toronto coronavirus induced restructuring

Business not viable

Personal guarantees and director liabilities

Toronto Coronavirus Summary

Introduction

Modell’s Sporting Goods, Inc. et al Chapter 11 bankruptcy proceedings

The novel court Order

Pier 1 Imports took a page from the Modell playbook

Could this happen in Canada?

Insolvency trustee Toronto summary

If you would prefer to listen to an audio version of this Boy Scouts Of America Brandon’s Blog, please scroll to the bottom of this page and click on the podcast.

Introduction

It all started with Kerry Lewis

Why the Boy Scouts of America filed for bankruptcy protection

The bankruptcy protection plan

The effect of the filing

Is there a Canadian statue to restructure like this?

Summary

If you would prefer to listen to an audio version of this filing bankruptcy in Canada Brandon’s Blog, please scroll to the bottom and click on the podcast.

Introduction

What Is Co-Tenancy Provision?

The Players

The Old Navy Canada Lease

The Danier Leather bankruptcy

The Dispute

The Court’s decision

Summary

Bankruptcy and insolvency: Introduction

What is difference between bankruptcy and insolvency in Canada?

Bankruptcy and Insolvency: Does the consumer really need it?

The Fizzics Business: The Sharks bit and invested money

Bankruptcy and insolvency: Do you need help?

Personal bankruptcy Canada FAQ: Introduction

Personal bankruptcy Canada faq: Personal bankruptcy process in Canada

One of the most asked questions is “What is the bankruptcy process in Canada?”. Last week our infographic and video described the corporate bankruptcy process in Canada. This week’s video describes the personal bankruptcy process in Canada.

VIDEO – Personal bankruptcy Canada faq

Personal bankruptcy Canada faq # 1 – How do I recognize if I am in financial trouble?

The role of a Key Employee Retention Plan (***KERP) in company bankruptcies***