Tag: Corporate Bankruptcy

3 TYPES OF BANKRUPTCIES: DO WE REALLY NEED IT?

Post author By Brandon Smith
Post date February 19, 2020

3 Types of bankruptcies introduction

Two weeks ago I described the personal bankruptcy process Canada. Last week I described the Canadian corporate bankruptcy process. This week I want to start talking about the 3 types of bankruptcies in Canada.

3 types of bankruptcies: Voluntary and involuntary bankruptcy

In the last two weeks, I talked about both the personal and corporate bankruptcy processes. The way I described the bankruptcies it was all about the voluntary process of entering bankruptcy by filing an assignment in bankruptcy. That’s the 1st type of bankruptcy out of the 3 types of bankruptcies.

The second type which I will be speaking about today is the involuntary process of being pushed into bankruptcy. So how does one get placed into bankruptcy on an involuntary basis? It’s by a bankruptcy application.

3 types of bankruptcies: The bankruptcy application – the involuntary method

In order to file a bankruptcy application, one or more creditors must file the application to place the debtor, corporate or personal into bankruptcy. The creditor or group of creditors

must have unsecured debt of at least $1000 and the debtor must have committed at least 1 act of bankruptcy in the six months preceding the date of the bankruptcy application the acts of bankruptcy are laid out in the Bankruptcy and Insolvency Act (Canada).

3 types of bankruptcies: Acts of bankruptcy

So what are they? A debtor commits an act of bankruptcy in each of the following cases:

If in Canada or elsewhere the debtor makes an assignment of its property to a trustee for the benefit of its creditors.
A debtor makes a fraudulent gift delivery or transfer of all or part of its property.
The debtor makes any transfer of its property or any part of it that creates a charge on it that would be void as against a trustee and bankruptcy.
If with the intent to defeat or delay creditors the debtor departs out of Canada and absence itself.
If the debtor permits any execution or another process to be levied against it where it’s property is seized in order to be sold and the debtor does not redeem its property.
If the debtor exhibits to any meeting of creditors a statement of assets and liabilities that shows the debtor is insolvent if the debtor removes disposes of property or attempts to do so intending to defraud defeat or delay creditors.
If the debtor gives notice to any creditor that payments are being suspended or if the debtor ceases to meet its liabilities generally as they become do a bankruptcy application must be accompanied by an affidavit attesting to the debt and the alleged acts of bankruptcy

3 types of bankruptcies: What a bankruptcy application must look like

The affidavit must be deposed by a creditor or a representative of a creditor especially a corporate creditor and that representative must have personal knowledge of the facts. The bankruptcy application must be filed with the court having jurisdiction based on the location of the debtor. A bankruptcy application cannot be withdrawn without the permission of the court.

If there is a concern that the debtor’s assets might dissipate between the date of filing the bankruptcy application and the date of the court hearing the application the court can appoint the proposed licensed insolvency trustee to preserve and protect the assets but not too otherwise interfere in the running of the debtor’s business.

A notice of the time and place of the court hearing and all the motion material being used by the creditor or group of creditors must be served on the debtor.

3 types of bankruptcies: The bankruptcy order

A bankruptcy order could be issued 10 days after the service on the debtor of the bankruptcy application if it is not opposed or otherwise defended by the debtor. If it is defended then there will have to be a trial for the court to determine if a bankruptcy order should be issued and whatever the court decides. It is, of course, subject to the parties’ rights of appeal.

The debtor is bankrupt once the bankruptcy order is issued. The bankruptcy order puts on hold the enforcement rights of the creditors except for secured creditors holding valid security as soon as a bankruptcy order has been made the debtor’s property vests in the bankruptcy trustee and the bankruptcy administration begins.

To refresh yourself about personal bankruptcy administration check out my blog from two weeks ago. For a review again of the administration of a corporate bankruptcy check out my blog from last week.

Now the title of this blog is three types of bankruptcy. In the last two weeks, I have described voluntary bankruptcy for both an individual and a corporation by the filing of an assignment of bankruptcy. This week I talked about the involuntary bankruptcy process of the bankruptcy application for a bankruptcy order.

Next week I will discuss the third out of the 3 types of bankruptcies in Canada.

3 types of bankruptcies summary

I hope you enjoyed this 3 types of bankruptcies blog. 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.

Do you or your company have excessive debt and looking for 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 comprehend 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 3 types of bankruptcies, acts of bankruptcy, assignment in bankruptcy, Bankruptcy, bankruptcy administration, Bankruptcy and Insolvency Act, bankruptcy application, bankruptcy order, bankruptcy trustee, Corporate Bankruptcy, involuntary bankruptcy, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, trustee, voluntary bankruptcy

Brandon Blog Post

BANKRUPTCY TRUSTEE IN ONTARIO: REMARKABLE CARE NEEDED TO TAKE OVER A CLAIM

Post author By Brandon Smith
Post date August 12, 2019

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

***Bankruptcy trustee in Ontario*: Introduction**

As a bankruptcy trustee in Ontario (now called a licensed insolvency trustee ), there are many times where our investigation indicates that the bankrupt (usually a bankrupt corporation) has a claim against another party. The claim may very well be a good one worthy of pursuing. However, like with any potential litigation, there could be not enough funds to pay for pursuing that claim in the Court, or it may be unwise for a bankruptcy trustee in Ontario (Trustee) to assume the litigation risk.

In cases like this, the licensed insolvency trustee can offer up the opportunity to the creditors to take on the action in their own name. One or more creditors can get an order under s. 38 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (BIA) from the Registrar in Bankruptcy, authorizing the assignment to them by the licensed insolvency trustee of the bankrupt company‘s right to advance that claim and if necessary, sue.

Without going into all the finer details and circumstances, any creditor or group of creditors who obtain that right can keep any amount collected under that claim up to the total of their claim against the bankrupt company plus the costs they spent in obtaining that award. Any surplus must be paid over to the bankruptcy trustee in Ontario.

A recent decision of the Court of Appeal for Ontario highlights an interesting issue regarding the interplay between advancing such a claim by a creditor and the limitation period in Ontario.

Bankruptcy trustee in Ontario case background information

The Ridel family used an investment and stock brokerage company called e3m Investments Inc. (e3m). In December 2006, the Ridels issued a Statement of Claim versus their account representative, as well as his employer, e3m. The action was for negligence, breach of contract and violation of fiduciary obligation in the monitoring of their financial investment accounts.

After a ten-day court hearing, judgment was issued against e3m as well as the account representative in Ridel v. Cassin, 2013 ONSC 2279. The judgment was especially scathing of both the account rep and e3m. The judgement, in the amount of $1,036,245.85, was upheld on appeal. As a result, the account representative needed to make an insolvency filing. My Firm administered the successfully completed Division I restructuring Proposal of the account representative. Given the judgement, he needed to do an insolvency filing and it was in his best interests to attempt to restructure to avoid bankruptcy. The Ridel family controlled the voting in his successful Proposal. e3m filed for bankruptcy on January 20, 2015.

The bankruptcy trustee in Ontario case before the Court of Appeal

On July 31, 2019, the Court of Appeal for Ontario released its decision in Ridel v. Goldberg, 2019 ONCA 636. The underlying claim was one the bankrupt company may have had against its Director and majority shareholder.

On October 25, 2016, the Ridels, as an unsecured creditor of e3m, got an order under s. 38 of the BIA. They obtained an assignment of the claim of e3m against its sole Director, a Mr. Goldberg. Since e3m was found liable under the Ridel judgement, e3m could have a claim and institute proceedings against its Director, Mr. Goldberg.

The s. 38 order supplied the Ridels with the legal authority to assert e3m’s claim against Mr. Goldberg “to recover the damages for which e3m became liable pursuant to [the 2013 Judgment, as amended] in their own name and at their own expense and risk, based on Mr. Goldberg’s failure to fulfil his obligations as a director and officer of e3m by abdicating his responsibility to supervise the Ridels’ accounts at e3m”.

The Ridels launched their lawsuit proceedings in the lower Court against Mr. Goldberg the day they obtained the s. 38 order, October 25, 2016. The Ridels were trying to get a summary judgement. Mr. Goldberg raised several defences, including, the Ridels’ claim was statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (Limitations Act).

The lower court judge dismissed the Ridels’ action on two fronts. First, the judge found that there were concerns about needing a trial. Second, the lower court judge agreed that the claim should be dismissed because of the expiration of a two-year limitation period The Ridels appealed the lower court’s decision to the Court of Appeal for Ontario.

The fascinating part (for me anyway) of the Court of Appeal’s decision

The unanimous Court of Appeal ruling agreed with the lower court judge’s decision that the action the Ridels took by way of an assignment document from e3m’s licensed insolvency trustee was statute-barred under the Limitations Act. However, the appeal court review of the lower court decision disagreed with the reasons given by the lower court. Upon agreeing that the Ridel’s action should be dismissed based on it being barred by the Limitations Act, the appeal court did not wade into whether or not the lower court judge’s decision was correct that summary judgement should not be granted as there was a triable issue.

The arguments given for the limitation period are somewhat complex. I will attempt to summarize them here so as not to be confusing. The lower court judge held that the Ridels as applicants knew of the existence of the potential claim of e3m against its Director as early as in July 2006. Since they did not launch the e3m claim in a court action until October 2016. Hence, the limitation period of 2 years made that claim statute-barred.

The Ridels state that the limitation period cannot have actually begun up until after e3m was bankrupt. Before then, they could not take an assignment of any claim from e3m’s licensed insolvency trustee, especially a potential claim by the company against its Director (and Officer).

They also stated it is impossible to get an s. 38 order before the company actually is bankrupt.

The lawyer for the Ridels did not argue the testing of the timing of their very own understanding of the Director’s misdeed in regard to e3m. Rather, he focussed on the fact that the Ridels were not in a place to do anything concerning it, at a minimum, until the bankruptcy of e3m.

The appeal court went through a detailed analysis of the relevant statutes and case law. The Court of Appeal confirmed that the action launched was not a claim by the Ridels personally, but rather the company’s claim of which they took a court-approved assignment. So the appeal court agreed substantially with the Ridels that they could not have started their action until they took the assignment from the e3m licensed insolvency trustee.

When was e3m’s knowledge of its claim?

So the appeal court said what is important, since it is e3m’s claim and not the claim of the Ridels, when did e3m first become aware of the potential claim against its Director? The appeal court stated it fully understood why the Director would not have had e3m sue him or otherwise enjoin him in the original claim against the account rep and e3m. However, when did e3m first become aware of the potential of its claim?

On the proof in this matter, regardless of the Ridels’ or Goldbergs’ understanding of the case or his aversion to act against himself in support of e3m, at the very least, by April 2013, every one of the other e3m investors/shareholders had received a copy of the Reasons for Decision and Judgment against the account rep and e3m. It included different referrals to the Director’s misbehaviour. Those investors had the capacity to make e3m file a claim against the Director.

The Court of Appeal for Ontario judges determined that e3m recognized that: 1. an injury had actually happened; 2. its loss was brought on by an act or omission; 3. the act or omission was purportedly that of the Director, and 4. an action against the Director was a proper way to treat it. Regardless of the Director’s control to protect against such a lawsuit, the investors might have taken control of e3m’s board of directors and cause e3m to make such a case versus Goldberg.

So the appeal court decided that e3m first recognized that it may have a claim against the Director in April 2013, but the action was not commenced until October 2016. Accordingly, it was outside of the 2 year limitation period and the action was statute-barred.

So what does this mean for a bankruptcy trustee in Ontario?

As the bankruptcy trustee in Ontario in either a corporate bankruptcy or personal bankruptcy, many times we find as a result of our investigation that the bankrupt may have a claim against another party. More often than not, we either do not have sufficient funds or are not prepared to risk the funds in the Estate to the litigation risk. So, what we do is communicate with all known creditors to advise of the potential claim and that the licensed insolvency trustee is either unwilling or unable to act upon it. Accordingly, we are giving the creditors a chance to apply to the Court to take an assignment of such action under s.38 of the BIA.

Creditors seriously considering taking over the bankrupt’s claim must seriously consider the issue of whether or not launching a court action will be met with a defence that the claim is statute-barred, amongst other defences that may be available to the defendant(s). The Court of Appeal for Ontario has clearly communicated that the creditor taking an assignment of the bankrupt’s claim, cannot be in a better position than the bankrupt itself. The first knowledge that a claim exists will be when the bankrupt first had the knowledge, not the date that the creditor obtained the right to sue or any other date.

Bankruptcy trustee in Ontario Canada conclusion

The business world contains normal daily risks. This case clearly shows that. Are your company’s viability and solvency being threatened by claims against it, or for any other reason?

Is your company experiencing financial problems and requires debt relief? Are you on the brink of filing for bankruptcy just like e3m was because of your debts? Or are you an individual that has too much debt and you are looking at personal bankruptcy as your solution? 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. We can show you the various alternatives to bankruptcy.

As a licensed insolvency trustee, we are the only professionals who have met the requirements of the Office of the Superintendent of Bankruptcy Canada to obtain a trustee licence. One of those requirements to be trustees in bankruptcy is to pass an oral board of examination.

Insolvency trustee’s operations are licensed, authorized and their duties supervised by the federal government to offer insolvency advice and to implement solutions under the Bankruptcy and Insolvency Act (Canada). We are a licensed insolvency trustee operating in Ontario Canada and we will help you to select what is best for you to free you from your debt issues.

Contact the Ira Smith Team today so we can use our qualifications to get you or your company the debt relief that you deserve. We will eliminate the anxiousness, tension, discomfort and pain from your life that your bills and your cash problems have caused. With the unique roadmap, we develop just for you, you can eliminate your debts and we will promptly return you right into a healthy and balanced problem-free life.

Tags Appeal Court, Bankruptcy, Bankruptcy and Insolvency Act, bankruptcy and insolvency act canada, bankruptcy trustee, bankruptcy trustee in ontario, Corporate Bankruptcy, Court of Appeal for Ontario, division 1 proposal, Ira Smith Trustee, licensed insolvency trustee, limitation period, limitations act, personal bankruptcy, restructuring, section 38, trustee

Brandon Blog Post

THE HONEST TO GOODNESS TRUTH ON BANKRUPTING A CORPORATION

Post author By Brandon Smith
Post date April 29, 2019

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

Bankrupting a corporation: Introduction

I have blogged on personal and corporate insolvency matters for just over 6 years now. I have covered many topics. During a recent corporate bankruptcy consultation, I realized that I have never written about what the steps are for bankrupting a corporation. An important issue arising from this topic would be what the Directors of a corporation going into bankruptcy should know.

There are 3 ways for a company to be bankrupt

Like in all bankruptcy matters, there are three methods that result in bankrupting a corporation in Canada. The first way is being pushed, and the second way is jumping in with both feet voluntarily (I know, corporations don’t have feet!). The third way is to have the company’s creditors vote down a corporation’s attempt to restructure under a Proposal under the Bankruptcy and Insolvency Act (Canada) (BIA). In this Brandon’s Blog, I will focus on describing the first two methods.

Bankruptcy application – an involuntary bankruptcy

Being pushed means that one or more unsecured creditors, owed in total at least $1,000, has made a motion before the Court asking that a Bankruptcy Order be made against the company. The motion is called a Bankruptcy Application.

In order to do so, the unsecured creditor(s) have to:

retain a bankruptcy lawyer.
gotten the consent of a licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee) to administer the corporate bankruptcy.
In addition to proving the debt owing, the applicant(s) also have to prove that at least one act of bankruptcy was committed by the company within the 6 months before the filing of the bankruptcy application.

There are various acts of bankruptcy listed in Section 42(1) of the BIA. Commonly seen acts of bankruptcy are fraudulent transfers of property, allowing a lawful seizure of some or all of their property by a creditor under a lawful process, and the catch-all ceasing to meet many liabilities as they come due.

Jumping in with both feet – a voluntary bankruptcy

By this term, I mean filing an Assignment in Bankruptcy. In this case, rather than someone going to Court, the Directors call a Directors’ meeting. At the meeting, the Directors resolve that the company is experiencing financial difficulty and cannot continue to run. The Directors also reserve that the company should file an assignment in bankruptcy and it gives authority to one Director to sign all the necessary documents.

The Director who has the authority to sign the bankruptcy documents is called the Designated Officer. Before the documents are ready for signing, the Trustee who is selected must get enough information to prepare the documentation.

Whether bankrupting a corporation in Ontario or elsewhere in Canada and regardless if it is a result of a Bankruptcy Order or an Assignment in Bankruptcy, the information the Trustee requires is the same.

Information and documents a Trustee needs

The Trustee requires a great deal of information before being able to properly administer a voluntary or involuntary corporate bankruptcy. Sometimes company officials can provide it and in other cases, the Trustee has to dig through the books and records of the company.

Here is the lengthy list of what is needed:

Exact corporate name and address of head office, details of any other locations, copy of any premises leases.
Minute book and corporate seal.
Bankruptcy Order or the resolution of the Directors.
Full description of the nature of the business.
Names of Officers and Directors and their addresses.
Date of incorporation of the company.
The date the company ceased operations, if prior to the date of bankruptcy.
The greatest number of employees employed in the last 12 months.
All employees – listing of names, addresses, social insurance number, amounts owing for each of severance, termination, wages, vacation pay, commissions and expenses.
Employee T4’s & ROE’s for current year employees (employer should issue to all employees for the year of bankruptcy and earlier if unissued).
Creditors’ listing (accounts payable) – details consisting of name, address, account number(s), and respective amounts owing classified as follows:
- Secured – banks, leasing company, source deductions, etc.
- Preferred – wages owing, rent to landlords, government remittances outstanding:
- Workers Compensation Board, if applicable.
- Municipal authorities: e.g. business taxes and realty taxes.
- Employer’s health tax.
- Unsecured – trade suppliers; Hydro; Bell Canada (quote telephone number(s); gas, etc.
- Details of any unsecured private party loans, shareholder loans or advances due to the company.
Details of any unions, if applicable, including name, address, account number.
Details of contingent liabilities and pending legal action, if any.
Accounts receivable – aged trial balance and detailed backup documentation (invoices, delivery slips, purchase orders, etc.) to support collection efforts. From the aged trial balance, classify the accounts as good, doubtful, bad to equal the total balance.
Inventory – detailed information on inventory cost and the company’s assessment of estimated realizable values.
Machinery, equipment and plant – detailed listing providing original cost, if possible and estimated realizable value.
Office furniture & fixtures – detailed listing providing original cost, if possible and estimated realizable value.
Real estate – all details of real estate owned, including deeds, legal descriptions, original costs, appraisals (if any), an estimated fair market value.
Vehicles – provide descriptions including year, model, VIN, kilometres, original costs and estimated realizable value. Note if any vehicles are leased/financed and provide copies of the lease/finance documentation.
Other assets – details of other assets such as prepaid expenses, deposits, goodwill, intangibles, shares or any investments, patents, trademarks.
Bank accounts – details of all bank accounts, including name, address, account number and approximate balance in the accounts.
Last 12 months of accounting records, bank statements and cancelled cheques (for all accounts maintained).
Financial statements – most recent.
Corporate solicitor – name and address.
Listing of leased equipment (copy of leases) – vehicles, office and any other equipment.
Insurance policy(ies).
A brief narrative of management’s opinion as to cause(s) of insolvency.
Disclosure of any sale or disposition of assets, outside of the ordinary course of business, in the last year.

The Trustee’s job

In a corporate bankruptcy, the Trustee, with certain exceptions, takes possession of the assets of the company. If the Trustee is aware that there are deemed trust claims against the assets, or there is a secured creditor, like a Chartered Bank, the Trustee must be careful. If there are, the Trustee should have already had a conversation with those parties prior to the bankruptcy, to decide what rights, if any, the Trustee may have against such property.

Assuming there are assets not subject to the valid claim of third parties, the Trustee must at least:

Establish whether the value of the assets will be enhanced if the Trustee operates the company’s business.
Take into account what obstacles exist in running the business and how to reduce risk if it is beneficial or necessary to run the business.
Decide what are the very best means to sell the properties? En bloc as one parcel or individually or at least several parcels?
Determine if there are any 3rd party owned assets on the company’s premises?
Identify if there are any company assets on the property of 3rd parties?
Prepare the required reporting to Service Canada so that the former employees will be able to make their Wage Earner Protection Plan Act claims.
See if there are proper insurance coverage and proper physical security over the assets?
Identify any inventory been delivered in the 30 days prior to the date of bankruptcy? What rights of revindication might exist?
Circularize the creditors requesting claims to be filed to understand what the depth and breadth of claims against the company are. This way, the Trustee can formulate a distribution to creditors, in priority, with the net funds available from the sale of assets.

What the Directors should be concerned about

Directors should have two concerns when contemplating bankrupting a corporation. First, they should be concerned about any decisions they have made or senior management actions they have ratified.

For example, Sears in the United States recently lodged a claim versus its previous CEO Eddie Lampert and a string of its top-level previous Directors. This includes Eddie Lampert’s previous Yale roomie Treasury Secretary Steven Mnuchin. The allegation is that the Directors condoned and approved Eddie Lampert’s actions for presumably swiping billions of dollars from the once-storied merchant.

Second, there are various types of claims against the corporation that are also personal claims against Directors. The list includes Director liability for unpaid:

Wages
HST
Source deductions
Certain environmental offences
Cybersecurity risks

In general, there is a relatively short list of things Directors can be personally liable for. In many cases, there will be Director and Officer Insurance to be relied upon. Directors may also have a due diligence defence.

A Director resigning their position will not protect them against any liability that would be a personal Director liability prior to their resignation.

Are you a Corporate Director?

Are you a Director of a corporation that has too much debt? Is your company’s capital insufficient to fulfill every one of its economic responsibilities and may be insolvent? Are you worried that your firm’s major secured lender will soon pull its financing completely and demand repayment in full which the company will not be able to do?

If you responded yes to any of these questions, call the Ira Smith Team today so we can kill off the stress and anxiety that these financial troubles have activated. We will create a strategy for the Directors unique for your company’s problems so that it can avoid bankruptcy and become profitable and continue to employ many people.

Call the Ira Smith Team today. We have decades and generations of experience restructuring and turning around companies seeking financial restructuring or a debt negotiation strategy. As a licensed insolvency trustee, we are the only specialists recognized, certified and monitored by the federal government to offer insolvency guidance to save businesses.

You can have a no-cost assessment so we can fix your company’s debt problems. Call the Ira Smith Team today. This will absolutely allow you to return to being efficient, healthy and balanced, Starting Over Starting Now.

Tags act of bankruptcy, assignment in bankruptcy, Bankruptcy, Bankruptcy and Insolvency Act, bankruptcy application, bankruptcy lawyer, bankruptcy matters, bankruptcy order, bankruptcy trustee, bankrupting a corporation, bankrupting a corporation in canada, bankrupting a corporation in ontario, BIA, Corporate Bankruptcy, director, involuntary bankruptcy, licensed insolvency trustee, voluntary bankruptcy

Brandon Blog Post

WHAT ARE THE BEST CORPORATE BANKRUPTCIES?

Post author By Brandon Smith
Post date January 21, 2019

If you would prefer to listen to the podcast of this corporate bankruptcies Brandon’s Blog, please scroll to the bottom of the page and click on the audio file.

Best corporate bankruptcies: Introduction

Who would think that I could write a blog about the best business failures? Corporate bankruptcy is normally associated with job loss, creditors and investors or shareholders losing out and liquidation.

This is true. But once in a while, corporate insolvency can also be used to end the life of a very financially sick corporation so that a new company can rise from the ashes and offer jobs to the affected employees of the bankrupt company. The story of the ServiCom bankruptcy is an example of the best possible outcome. Here is its story.

Best corporate bankruptcies: The ServiCom shutdown

On Thursday, December 6, 2018, the bankruptcy of the parent company of the ServiCom phone call center in Cape Breton closed it down without warning. It made 600+ Cape Bretoners immediately unemployed less than three weeks before Christmas.

Numerous people were out of a job after layoffs at the Sydney, N.S. telephone call centres over that weekend. The staff members at ServiCom expected to begin their week like they would any other Monday. On Saturday, the news broke that the company had suddenly laid off their staff members. Instead of working, they located themselves applying for unemployment and trying to find jobs.

“We were told to log off and then suddenly we don’t have a job” claimed one former employee. That Saturday, the telephone call centre notified the employees of the information that they no longer had work.

There was no notice for the layoff of this real number of employees. Accordingly, social agencies were incapable to set up conferences or job fairs to aid displaced staff members.

Best corporate bankruptcies: It was tough

Employees like Jamie Barbara were trying to stay positive in light of the problem. “Relieved, relieved now,” she said. “I can go on about my life and look for a job even harder than I was before”.

It was a tough several weeks for ServiCom employees. Many of the workers waited outside the Salvation Army to get a Christmas grocery order. Just before Christmas, that despair has transformed to delight. They obtained good news. Many people were thinking about bankruptcy.

Best corporate bankruptcies: A Christmas miracle

The workers were praying for a Christmas miracle and it arrived 13 days after ServiCom closed its doors.

An American business person, Anthony Marlowe, bought the assets of the bankrupt company for $1.5 million. The workers were thrilled that Mr. Marlowe was entering Sydney, N.S. and taking over. Mr. Marlowe started his career in outbound telemarketing as a call centre supervisor. Currently, he owns many call centre companies.

Todd Riley, the former manager of ServiCom in Sydney is now the Vice President of the new Sydney Call Centre. He claims they’ll be open for service and previous staff members are welcome. All of them will have their jobs back. There could be a couple of transfers from one program to another, however, everybody that was on the payroll will certainly be back.

Best business insolvencies: When jobs are saved

The telephone call centre now operates as the Sydney Call Centre and is owned by Mr. Marlowe’s company, MCI Canada. The excellent news is that he is seeking to expand the business.

Georgina Stuart is just one of many previous phone call center employees that were expecting to return to work in the New Year. “It’s just fantastic that we’ve got hope and work in the future, yes it absolutely does, so we’re looking forward to 2019.”.

There is now a feeling of relief. It was absolutely a roller coaster of feelings for the ServiCom employees. The Sydney Call Centre employees are thrilled to be back to continue their good work.

The building still had the ServiCom name on it when the employees returned. However, it absolutely is currently the Sydney Call Centre sustaining United States telecom AT&T as well as GM’s OnStar service, with much more business to hopefully come.

So, if anyone ever tells you that there is no such thing as best business insolvencies you can tell them this story.

Best business insolvencies: What about your company?

Does your company have excessive debt? Is the business viable but the corporate body is too sick to continue? Is your business in danger of shutting down? Will employees who have become like family be out of a job? Are the pain, stress, and anxiety currently adversely influencing your health and wellness?

If so, contact the Ira Smith Team today. We have years and generations of helping people and businesses seeking financial restructuring. As a licensed insolvency trustee, we are the only specialists certified and overseen by the Federal government to offer financial restructuring solutions.

We provide a free consultation to assist you to solve your problems. We know the discomfort financial obligations causes. The Ira Smith Team can end it as soon as possible from your life. This will permit you to start a fresh start, Starting Over Starting Now.

Call the Ira Smith Team today so that we can start helping you get back into a healthy and balanced, stress-free life.

Tags Bankruptcy, business failures, business insolvencies, call centre employees, call centres, Cape Breton, Christmas, corporate bankruptcies, Corporate Bankruptcy, Ira Smith, laid off, licensed insolvency trustee, MCI Canada, Nova Scotia, ServiCom, story about Sydney call centre workers, Sydney Call Centre, telephone call center

Brandon Blog Post

HOW BANKRUPTCIES WORK FOR BUSINESSES IN TORONTO AND VAUGHAN ONTARIO CANADA

Post author By Brandon Smith
Post date December 17, 2018

How bankruptcies work for businesses: Introduction

Recently I have written several blogs focussing on insolvency and specifically the topics of consumer proposal and personal bankruptcy. To round out the discussion, this Brandon’s Blog discusses how bankruptcies work for businesses in Canada.

To be clear, the goal for either personal bankruptcy or corporate bankruptcy is to avoid bankruptcy. We have many tools in our toolbox to help people and companies avoid bankruptcy through restructuring. It is only when the person has stewed over their personal or business problems for too long that they come to us when it is too late. When it is too late, our hands are tied for creative problem-solving.

How bankruptcies work for businesses: Where we start

When a business owner comes to our office for a free consultation, we start with some basics. The first thing we do is ask certain questions that will allow us to get a financial snapshot of the business. We need to know about the assets and liabilities of the business.

We need to understand who all the creditors are and what the assets are. Which creditors may have a deemed trust claim or a secured claim against the assets. What is the total and nature of the unsecured debts?

That information tells us what choices we may have in helping the business recover: is an informal debt settlement restructuring possible;

what do we think about the likelihood of a formal restructuring under either the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA) or the Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36) (CCAA); or is the business too far gone and therefore bankruptcy or just shutting down are the only options remaining.

How bankruptcies work for businesses: The proprietorship

If the business is unincorporated, then the person is carrying on their business in the form of a proprietorship. They are conducting business in their personal name. They may use a business style, but the legal reality of a proprietorship is that the individual, in their personal capacity, is carrying on business. So, the assets and liabilities that are created in the business, is owned by and is the responsibility of the person.

So, in this situation, it will be a personal insolvency discussion. The available remedies will be:

an informal restructuring;
(consumer) proposal debt settlement plan; or
personal bankruptcy

If you wish to find out more about personal insolvency, or how bankruptcies work for individuals, you can read some of my previous blogs. Good examples are WHAT IS THE DIFFERENCE BETWEEN BANKRUPTCY AND INSOLVENCY CANADA or CANADIAN DEBT SOLUTIONS: AVOIDING THE BANKRUPTCY PROCESS MIGHT BE THE RIGHT THING.

How bankruptcies work for businesses: Incorporated businesses

So now we have gone through the starting point I just described and we have determined that we are dealing with an incorporated business. We first focus on many issues before even discussing how bankruptcies work for companies.

First, we want to know how well does management understand its own business problems. If management does not have a good handle on their business problems, then they first need to get that deep understanding. They may know that monthly when looking at the numbers, they see that losses are continuing. Management, especially in an entrepreneurial or family-owned company, may feel ashamed because they don’t feel like they’ve made good decisions. Or they are aggravated and embarrassed because family members have told you the company is finished.

If you know in your heart that if you do not do something today, you may be risking the entire business.

How bankruptcies work for businesses: Know your numbers

To restructure companies for a successful turnaround, you first need to know your numbers and what they mean. The goal is to have the company producing sufficient cash levels and for everyone in the business to be earning a fair market-based income.

Management must look at the entire business and ask:

Where’s the profit?.
Do we have the money to actually run and scale the business?
What is getting in the way for the business to charge the revenue its products or services are worth?
Do we have the necessary cash and people resources will we need for a turnaround?
Are there lines of business or locations that need to be shed to increase profitability?
What expenses can we cut without harming our core business?
Which contracts do we need to cut to return to profitability and growth?
Do we have the proper reporting systems to give us the information we need to get prompt and accurate information?
Can we properly analyze the business issues and take the necessary corrective action?
Do we have the right people to carry on the business while implementing the turnaround?
Are we experienced enough to carry out our own turnaround or do we need outside professionals to help us with it?
Do we know what the impediments are to having a successful informal restructuring or do we need to look at a formal restructuring process?

How bankruptcies work for businesses: Now that we have the information…

These are the main questions that first must be answered for any business experiencing financial difficulties and facing insolvency. This is especially true for more complex companies. New systems or techniques may need to be implemented. If management can answer these questions for themselves, we want to hear those answers. If not, then a financial advisor may need to be retained. My Firm has been regularly retained, either by a company or its lender, to answer these questions and provide our recommendations. This kind of assignment is called a Business Viability Review.

After we provide our recommendations, we then work with the company to help them decide if they can carry out the recommendations and strategies themselves, or if they need our help to do so. If management can do it on their own, many times the lender will want us to stay involved by monitoring the company’s progress and reporting back to both the company and the lender.

How bankruptcies work for businesses: What if informal restructuring isn’t possible

The aim is always to avoid bankruptcy but it’s practical to recognize what it is and when it could be suitable. Companies are complex organisms. There may be the need to shed unprofitable contracts or long-term agreements that are just too expensive to continue with. It may be that disposing of such onerous contracts, leases or agreements is crucial to have a viable ongoing business. Many times a formal restructuring process is necessary to legally end those types of agreements.

It is the largest of company restructurings that we hear about in the news. From the United States, we read about Chapter 11 bankruptcy protection filings. In Canada, we read about restructurings under the CCAA. The largest of companies do not represent the size of the majority of Canadian companies.

For the biggest of companies, they can get relief and press back on creditors. There is an old adage which says: “If you owe the bank a bit of money, they own you. If you owe the bank a huge amount of money, you own them.”. In that way, in the largest company restructurings, the business can get a long time to either sell particular assets where the cash will help them rebound. They will also get the time they need to “rightsize” their employee numbers and shed unprofitable contracts. Loan changes with their secured lender or banking syndicate is also on the table and accomplished, more often than not. Their sheer size demands it and they get it.

How bankruptcies work for businesses: The reality for the majority of Canadian companies

Canadian business is full of entrepreneur-owned companies. So, that is what I will focus on in this Brandon’s Blog. If the business owner(s) come to us early enough, then we can decide if an informal restructuring will work or if not, what needs to be done in a formal restructuring. For any business that owes less than $5 million, it will normally be a BIA restructuring debt settlement proposal. We have done many successful company restructuring proposals under the BIA.

The answers to all the questions I posted above, will tell us what the restructuring needs to look like, how long it will take, and what our projections show about the profitability and viability of the business after a successful implementation of the restructuring plan.

How bankruptcies work for businesses: Company bankruptcy

In a company bankruptcy, the Licensed Insolvency Trustee (formerly called a bankruptcy trustee) (Trustee) takes possession of the assets, properties, and undertakings of the company. This assumes that there are not secured creditors who have all the assets of the company tied up. If there are, then the company may not need to go into bankruptcy. Rather, a secured creditor will take enforcement action by making a demand on the insolvent company. However, if the loan is not repaid in time, then the secured lender will appoint a receiver to take possession of the assets covered by the lender’s security. In Canada, this is normally a Chartered Bank and all the assets are secured.

Sometimes a company in receivership needs to also file for bankruptcy. The main reason would be to aid in maximizing the recovery on the assets. For example, the company is a retail chain. The only way to maximize the recovery is to run the business and sell off the assets from one or more stores. One way to guarantee quiet enjoyment of the stores the receiver needs to stay in is to have a bankruptcy. That is because, under Provincial commercial tenancy law, a trustee in bankruptcy has a certain time to stay in the premises, undisturbed, as long as the current rent is paid.

How bankruptcies work for businesses: Receivership or bankruptcy

Whether there is a receivership or bankruptcy, there are many steps that a receiver or trustee have in common. These include:

Determining whether or not the recovery on assets will be maximized if the business is operated by the receiver or Trustee.
What impediments are there in running the business?
What is the best way to sell off the assets? As an entire group or parcels of assets that make sense to keep together, or one by one?
Are there any third party assets not owned by the company on the premises or other locations?
Are there assets owned by the company in any other locations?
Is there proper insurance and physical security over the assets?
Once the assets are sold and the cash received, what claims are there against the funds and what is the priority of all the potential claimants?

How bankruptcies work for businesses: The entrepreneurial company reality

Most mid-size and small companies when they’re in difficulty, do not submit a formal restructuring plan or file for bankruptcy at all. They just shut down by closing the doors. The owner will get the company’s final income tax and other information returns completed and filed. They will make sure that employee wages are paid current. Hopefully, source deductions and HST are fully paid up.

Wages, source deductions and/or HST that are not fully paid, are a personal liability of the Directors of the company. In the entrepreneurial companies, the owner(s) have probably personally guaranteed bank loans, premises and equipment leases or have raised funds to start and invest in the business by taking out at a mortgage against their home.

This brings us to the reality of most midsize and small businesses. The business failure leads to personal insolvency issues. Many times we advise entrepreneurs that their company filing an assignment in bankruptcy is not necessary. Rather, they should just shut down their business and then we will deal with their personal insolvency issues. This will allow the entrepreneur to get a fresh start.

Now what is required is getting a job in their field and earning a salary without the risk and challenges of running their own business. Once they get their fresh start, are back on their feet and saved up some money, they can decide if being an employee or starting a new business will be their future.

How bankruptcies work for businesses: Does your company have too much debt?

Is your company insolvent and needs to restructure? Is your business viable but can only continue if it can reorganize its debt? We know your pain and understand the stress you are living with. The Ira Smith Team has decades and generations of experience in company restructurings of all sizes.

Contact the Ira Smith Trustee & Receiver Team. If we can meet with you in our free first consultation early enough, we can create and help you start a restructuring and turnaround plan. This will allow your company to continue to do business, create jobs and be profitable for many years to come.

Tags bankruptcy trustee, canadian debt solutions, Company bankruptcy, Corporate Bankruptcy, how bankruptcies work, how bankruptcies work for businesses, how bankruptcies work for companies, how bankruptcies work for individuals, how bankruptcies work in canada, Ira Smith Trustee, licensed insolvency trustee, receiver, receivershhip, restructuring, toronto, trustee, Vaughan

Brandon Blog Post

FORM 31 PROOF OF CLAIM: HOW TO PROPERLY COMPLETE THE PROOF OF CLAIM

Post author By Brandon Smith
Post date October 3, 2018

Form 31 proof of claim: Introduction

In last week’s vlog, I reviewed why it is important to complete a form 31 proof of claim truthfully, and the penalties for filing a false claim. For both personal and corporate insolvency files, creditors call asking how to complete the document. I discuss in this vlog why it needs to be completed properly. I also provide a link in this blog that you can click on to see how to properly complete the form step by step.

The reference to “form 31” is merely the number of the form given to the form 31 proof of claim form under the Canadian Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (“BIA”).

What is the form 31 proof of claim form?

Completing and returning form 31 is the second phase in the bankruptcy process. They are included with the notice of bankruptcy documents mailed out by the licensed insolvency trustee (formerly known as a bankruptcy trustee) (the “Trustee”) to formally notify the creditors of the bankruptcy.

When properly completed and filed by each creditor, they are what a Trustee uses to compare the debt as listed on the debtor’s bankruptcy sworn Statement of Affairs. The amount claimed by a creditor is normally different than the amount of the debt listed on the bankruptcy schedules. The reason for this is normally because the creditor’s records are accurate to the penny, while the bankrupt’s records are usually not up to date.

The process is the same whether you are filing a secured claim, an ordinary unsecured claim or a priority claim, which is also unsecured, under s.138 of the BIA. What is important is that you need to have a provable claim.

If the Trustee determines that you have either an unliquidated claim or a contingent claim, there will be additional steps you will need to take for the Trustee to be able to ascribe a value and for you to have a properly proved claim.

Form 31 proof of claim: Form 31

In every:

the Trustee will supply to all creditors form 31 document. If the debtor who intends to restructure first files a Notice of Intention To Make a Proposal, a claim form is not sent out at that stage. It will be sent with the actual restructuring proposal and other related documents.

The same document contains both where you can make your claim as well as complete the proxy form, if applicable. Creditors may experience difficulty completing the document. So, the Trustee provides instructions on how to complete the claim form and proxy. That is also why I have provided a step-by-step instruction sheet from the link below so you can follow exactly how to complete the form.

form 31 proof of claim

***Form 31 proof of claim*: Acceptability of proof of claim**

It is important to properly complete the document. It must be completed fully and properly. The claim must include all necessary details called for under the BIA. Below is a link to an example on how to properly complete the form 31 proof of claim. A Trustee is required to review all proofs of claim received.

The purpose of this is to know what claims are acceptable to be admitted for voting at the First Meeting of Creditors. Also, all proofs received either before or after the creditors’ meeting must also be reviewed carefully to make sure that they are acceptable if there is a dividend to be paid on the claims in the insolvency proceeding.

The Chair of the creditors meeting has the power to admit or disallow claims for the purpose of voting at the meeting. The Trustee has the same power for the proofs of claim for dividend purposes. Most times the Trustee will also be the Chair at the meeting of creditors.

It is incumbent on the Trustee to communicate with creditors whose claims the Trustee believes to be deficient. The purpose is to obtain additional information to make a final determination. The Trustee has to decide whether to admit or disallow a specific claim.

As you can see, completing the document properly is essential.

Does a creditor have to file a claim?

Nobody will force a creditor to file a claim in a bankruptcy estate. A creditor’s claim becomes valid when the creditor files it and the Trustee accepts it. . When a creditor files a claim against a bankruptcy estate, the creditor is making a claim that the Trustee should record and count their claim so that the creditor will be entitled to receive their pro-rata share of any dividend payments that may be made.

The Trustee will issue the maximum payment each creditor is entitled to when the bankruptcy estate is liquidated. When a creditor files a claim, the creditor also becomes an interested party in the bankruptcy case. An interested party is a person who has a vested interest in the bankruptcy case. If the claim is filed before the First Meeting of Creditors in bankruptcy, then the creditor has the right to participate in and vote at the meeting.

Form 31 proof of claim: My example

CLICK HERE TO SEE AND DOWNLOAD PROPERLY COMPLETED

FORM 31 PROOF OF CLAIM

Can I file a proof of claim after the deadline?

There are really only two important deadlines when it comes to filing a claim. The first is before the First Meeting of Creditors. As mentioned above, if you wish to participate in that meeting, then you need to have filed a properly completed valid claim before the start of the meeting. However, if you don’t file it by then, although you won’t be able to vote at the meeting, you have not lost out on anything else.

Once all the realization of assets of the bankrupt has been completed, being both the current assets, fixed assets, and possibly even intangible assets, if the Trustee has sufficient funds to issue a dividend payment, then the Trustee has to review all the claims filed. The Trustee also has to compare the claims register containing all of the creditor claims filed against the names and amounts listed in the bankrupt’s sworn Statement of Affairs.

If any creditors have not yet filed, and there will be a payment made to the unsecured creditors, the Trustee has to send a specific notice pursuant to the requirements of the BIA to each such creditor. The notice in writing says that a dividend will be paid, and if you don’t file your claim by a specific date, then you will be barred from receiving any payment.

How do I object to a form 31 proof of claim?

First, you have to be a creditor with a proven claim accepted by the Trustee. The BIA states that any creditor can inspect the claims filed. So if you have personal knowledge that a party listed on the sworn Statement of Affairs is really not a creditor, then you would be assisting the Trustee by reviewing the claims filed and pointing out any claims you believe are invalid, and why. However, it is very unusual for a creditor to take the time to do so.

The next opportunity and really the only time it matters, for a creditor to object to a claim filed by a creditor is if a dividend distribution is going to be made and the Trustee sends out the Final Dividend Sheet. If you think there are errors, then you can object to the approval of the Trustee’s Final Statement of Receipts and Disbursements and the Dividend Sheet.

Reasons that you may feel one or more claims are incorrect could be:

You do not believe that someone that has filed as a secured creditor can provide adequate proof of security with their claim.
You feel that the compromise of claims being proposed is improper.
There may be details of payments received by a creditor are missing and therefore their claim is overvalued.
The priority of claims listed is improper.
The priority of payment as listed in the Trustee’s Final Statement is incorrect.
Some of the more complicated claims, such as the claim of lessor, a claim by wage earner, claim by farmer or another claim for employees have been incorrectly calculated by the Trustee.

If you have any concern that there is an error with the amounts being claimed, or if you believe that there are circumstances where one or more claims are not valid, you should immediately communicate this to the Trustee.

Keep in mind that once the Trustee issues the Final Statement with Dividend Sheet and has the intention of making a payment to all creditors with valid claims, you have to file your own objection within 30 days of the date on which the notice was issued.

Form 31 proof of claim: Do you need help?

Do you or your company have too much debt? Is a financial restructuring or debt settlement plan necessary but you just don’t know where to start? If so, then you need the help of a professional trustee.

The Ira Smith Team has years of experience of helping individuals and companies successfully complete their restructuring proposal debt settlement plans. Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our door.

You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, recover your money and move on to the next investment opportunity. Call us today for your free consultation.

Tags Bankruptcy, bankruptcy trustee, Consumer Proposal, Corporate Bankruptcy, debt settlement, financial restructuring, First Meeting of Creditors, form 31 proof of claim, how to complete form 31 proof of claim, insolvency, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, proof of claim, proof of claim form, proxy, restructuring proposal, trustee

Brandon Blog Post

330 UNIVERSITY AVENUE: CORPORATE BANKRUPTCY COURT TORONTO SECRETS EXPOSED FROM THE CANADA LIFE BUILDING

Post author By Brandon Smith
Post date July 18, 2018

330 University Avenue: Introduction

On the west side of University Avenue and immediately north of Queen Street, lies 330 University Avenue, in Toronto’s core. This University Ave. building is known as the Canada Life Building. Work on the building began in 1929 for the brand-new head office of the Canada Life Assurance Company and it opened up in 1931. It was the 4th structure to act as the head office of Canada Life. Most noteworthy is that this company was Canada’s earliest, as well as the biggest insurance provider.

330 University Avenue: Brief building history

The development of this fifteen-floor Beaux Arts structure was by Sproatt & Rolph. It stands at 285 feet (87 m), 321 feet (97.8 m) including its famous weather beacon. This building was the very first of scheduled buildings along University Avenue, however, the Great Depression stopped those plans. When it finished, it was among the highest structures in Toronto. It stays one of the biggest office complexes in Toronto with windows that tenants can open. In 1997, Toronto City Council designated the building a heritage property.

330 University Avenue: The most noticeable part of the building

The weather beacon was added in 1951. Its colour codes sum up the weather report at a look. Environment Canada out of Toronto Pearson International Airport revises the weather details 4 times each day.

The top light indicates:
Consistent green = clear
Stable red = overcast
Blinking red = rainfall
Blinking = snow

The white lights along the tower show:

Lights rising = warmer
Lights running down = colder
Solid = consistent temperature level/ No adjustment

During the day, the weather tower shows the weather for that day. The evening signals show the weather for the next day.

330 University Avenue: 330 university avenue 8th floor

But enough of the history lesson. Maybe you didn’t come to this vlog to learn about the building’s history; I will now change the focus. On the 8th floor are the courtrooms. These Courts are presided over by Judges of the Superior Court of Justice Toronto Region. All corporate insolvency matters, certainly not just corporate bankruptcy matters, are part of what is known as the Commercial List.

Personal bankruptcy in Toronto Ontario is normally first heard in a different Court up the street at 393 University Avenue before a Registrar in Bankruptcy. The Registrar is a Master of the Court hearing bankruptcy matters. Most importantly, a Commerical List Judge in 330 University Avenue, Toronto Ontario M5G 1R8 must hear any appeal of a Registrar’s decision. This is for the reason that is what the rules state.

330 University Avenue: The corporate insolvency matters overview

The Court at 330 University deals mainly with corporate insolvency matters. Examples are:

Corporate receivership – appointment of a receiver, motions by the receiver or a stakeholder requesting approval for specific relief, approval motions for sale of assets or fee and costs of the receivership administration, and above all, the receiver’s discharge application.
Corporate restructuring – all motions for bankruptcy protection and restructuring of a company under the Companies’ Creditors Arrangement Act (CCAA), motions by the Court-appointed monitor or a stakeholder requesting approvals, approval motions for the Restructuring Plan of Arrangement including voting rights of all stakeholders, approval of the implementation of the Plan of Arrangement, approval of the fee and costs of the CCAA administration, monitor’s discharge application.
Personal and Corporate bankruptcy matters – as indicated above, these would mostly be either an appeal from Registrar in Bankruptcy’s decision or an opposed matter that the Registrar was not allowed to hear under the bankruptcy rules.

330 University Avenue: Do I need a lawyer to appear at 330 University Avenue?

Corporations are not a human being, so they cannot show up in Court and speak. Therefore, a company requires a person to act on its behalf. Although a shareholder or officer and director authorized to speak on behalf of the company can represent the company in Court, it is not advisable.

I say this because the legal matters heard are most complex. As a result, an experienced insolvency lawyer is necessary to properly represent the position of either the company or a stakeholder.

The licensed insolvency trustee (formerly known as trustee in bankruptcy) who is acting as the receiver, monitor or trustee, similarly will have a competent insolvency or bankruptcy lawyer acting on its behalf. Motion filings always include very detailed reports.

Complex text, financial calculations and detailed exhibits will form part of the filed material. Most laypeople would need both an independent licensed insolvency trustee as a financial advisor, as well as an experienced corporate insolvency lawyer on their team. Therefore, the costs can mount quickly.

330 University Avenue: Is your company going to be in Court either for a restructuring or as a stakeholder?

Is your company dealing with severe economic problems and you aren’t sure what to do? There’s no embarrassment in looking for specialist, financial advice. As a licensed insolvency trustee, the Ira Smith Team can check your company’s circumstances and assist you to get to the most effective solution to solve your company’s financial issues. Several of our successful case studies can be found on our website.

Ira Smith Trustee & Receiver Inc. is here to assist. The government licenses and supervises us. Hence, to keep our license in good standing, we must adhere to a stringent code of ethics. We are well-known to the Judges at 330 University Avenue and all the Toronto insolvency lawyers.

I know the pain and discomfort you are in because of your corporate financial problems. You will certainly discover that we use a pleasant, non-judgmental technique in understanding you, your goals and in restructuring your company.

Give me a phone call today and allow me to address your economic issues Starting Over, Starting Now.

Tags 330 university avenue, 330 university avenue 8th floor, 330 university avenue toronto ontario m5g 1r8, bankruptcy court secrets, bankruptcy lawyer, canada life, Canada Life Building, CCAA, commercial list, Companies’ Creditors Arrangement Act, Corporate Bankruptcy, corporate receivership, corporate restructuring, Ira Smith Trustee, judges of the superior court of justice toronto region, licensed insolvency trustee, personal bankruptcy, Superior Court of Justice, Superior Court of Justice Toronto Region

Brandon Blog Post

CANADA BANKRUPTCIES: GRAPHIC & VID – CANADIAN BANKRUPTCY AND INSOLVENCY LAW

Post author By Brandon Smith
Post date May 9, 2018

Canada bankruptcies: Introduction

The purpose of this infographic, video and blog is to give you Canada bankruptcies information. I want to explain how Canadian bankruptcy and insolvency law works for companies and what the major steps corporate bankruptcy laws in Canada are. So watch the video below and feel free to read in more detail right below the video.

Canada bankruptcies: Video

Canada bankruptcies: The 10 standard steps in a voluntary corporate bankruptcy

The actions of a Licensed Insolvency Trustee (Trustee) takes with respect to the assets and the claims of creditors in a corporate bankruptcy may differ from case to case. However, there are 10 standard steps the Trustee takes in each corporate bankruptcy file. These steps are to understand and deal with the nature of the assets and the creditor claims.

Here are the 10 steps I take as a standard process with each corporate bankruptcy.

Step 1 – Initial meeting with Trustee

I meet with the Directors of the company by providing a free consultation. In this meeting, I learn the causes of the company’s insolvency and the nature and extent of the assets and the claims of various creditors. This includes potential trust claimants and secured creditors.

After obtaining the information I need to provide advice specific to that company’s situation, I decide if the company is a candidate for a restructuring, either informally or in a bankruptcy protection mode. If possible, this is preferable, as it will save jobs and allow the company to continue in business. If not, I advise about corporate bankruptcy and what is involved.

Step 2 – Directors meeting

If bankruptcy is the answer, the Directors formally meet and pass a resolution stating that the company is insolvent and must file an assignment in bankruptcy. The resolution also indicates which Director is authorized to sign all documents and be the Designated Officer in the bankruptcy proceedings. The Designated Officer is the person that will attend the First Meeting of Creditors and answer questions about the causes of the company’s insolvency and bankruptcy and how the company conducted business.

Step 3 – Signing all documents

With the signed Directors’ resolution in hand, I prepare all necessary bankruptcy documents. I then meet with the Designated Officer to explain the documents and have them all signed by him or her.

Step 4 – Filing with Official Receiver

The Official Receiver is the local representative and part of the Federal Office of the Superintendent of Bankruptcy. I electronically file the required documents and wait for the Official Receiver to issue the bankruptcy certificate. The company is not officially bankrupt until the day and time that the Official Receiver issues the bankruptcy certificate. Normally it gets issued on the same day or the next day. So, if the timing of the start of the bankruptcy is important, I need to take a time lag into consideration.

Step 5 – Bankruptcy certificate

The company is not officially bankrupt until the day and time that the Official Receiver issues the bankruptcy certificate. Normally the issuance is on the same day or the next day. So, if the timing of the start of the bankruptcy is important, I need to take a time lag into consideration.

Once the certificate is issued, my firm Ira Smith Trustee & Receiver Inc., is named as the Trustee. This appointment is valid until the First Meeting of Creditors. At the meeting, one of the things the creditors must vote on, is affirming the Trustee’s appointment.

Step 6 – Trustee takes possession

Now that I am the Trustee, I have a duty to take possession of the company’s books and records and the known assets. Taking possession of the assets is subject to the rights and wishes of any trust claimants or secured creditors.

Step 7 – Trustee notifies known creditors

Within 5 days of the date of bankruptcy, I must familiarize myself with the books and records as ot the names and addresses of the creditors. I must also in those same 5 days, set the time and place for the First Meeting of Creditors and mail out the notice to the creditors advising of the bankruptcy, the creditors meeting details and providing a proof of claim form. I must also arrange for a notice of the bankruptcy be placed in a local newspaper so that any unknown creditors are officially on notice.

Step 8 – Trustee safeguards assets

Again subject to the rights of any trust claimants or secured creditors, I must safeguard, insure and store the assets. I can begin formulating a plan for selling the assets if there is equity for the bankruptcy estate. However, I cannot sell any assets before the First Meeting of Creditors without a Court Order. At the creditors meeting is where I seek the approval of the creditors for the plan I have prepared to sell the assets. After obtaining that approval, sales can be completed by the Trustee.

Step 9 – Trustee prepares the report

I prepare my Trustee’s Report To The Creditors On Preliminary Administration. The report is handed out to the creditors present at the First Meeting of Creditors. It is also a public document, so any creditor who could not attend the meeting can receive a copy.

The report covers the following areas:

Background information
Causes of financial difficulty
Description and estimated value of the company’s assets
Any trust, secured or property claims against the assets
What conservatory and protective measures to safeguard the assets the Trustee has taken to date
Books and records of the company
What the Trustee’s review to date of the books and records has determined, if anything
Did the Trustee retain legal counsel yet and if so, for what reason? If there is a trust, secured or property claims that the Trustee knows about, it would be normal for the Trustee to get a legal opinion on the validity and extent of such claims prior to the creditors meeting. The Trustee would advise the creditors of what the legal opinion says and how it will affect the sale of assets, or if there is even anything for the Trustee to sell.
The claims of the creditors identified to date.
What the anticipated realization and distribution to the unsecured creditors may be
The Trustee’s fee
Any other matters

Step 10 – The First Meeting of Creditors

Within 21 days of the date of bankruptcy, I hold the creditors meeting. My report described above is distributed. The Trustee, the Designated Officer and possibly the lawyer hired by the Trustee, attend the creditors meeting. Also attending are any creditors who wish to take part.

The creditors meeting is the place where the creditors can ask questions and find out information about the causes of bankruptcy and the Trustee’s estimate of what the unsecured creditors may receive by way of a distribution.

As mentioned above, the creditors also must approve the actions and activities of the Trustee to date, and approve any steps the Trustee wishes to take in realizing upon assets and dealing with creditors’ claims. The creditors also appoint up to 5 Inspectors. The Inspectors are representatives of the creditors who supervise and assist the Trustee and ultimately must approve the Trustee’s actions.

canada bankruptcies

These are the 10 standard steps I take in every voluntary corporate bankruptcy. The exact things I must do to realize upon the assets and deal with the claims of creditors will depend on the assets and claims themselves. When the bankruptcy administration is complete, including any distributions made, the Trustee then obtains a discharge.

Is your company experiencing financial difficulty?

I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a company in financial difficulty. If caught early enough, we can get involved in a turnaround situation for your company to keep jobs and value.

The Ira Smith Team knows that you are worried because your company is facing significant financial challenges. Your business provides income not only for your family. Many other families rely on you and your company for their well-being. The stress placed upon you due to your company’s financial challenges is enormous. We understand your pain points.

Contact the Ira Smith Team today. We know how to solve your company’s 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 company, Starting Over Starting Now.

canada bankruptcies

Brandon Blog Post

SEARS CANADA CLOSING: POLITICIANS WANT NEW LAWS TO PROTECT PENSIONERS DUE TO SEARS CANADA CLOSING

Post author By Brandon Smith
Post date November 1, 2017

Sears Canada Closing: Introduction

Following the Sears Canada failed restructuring, is the Sears Canada closing of all stores. It is leaving 16,000 retirees unclear about the future of their underfunded pension plan. Support is expanding for brand-new laws to better protect Canadian workers during a company’s collapse.

Sears Canada Closing: What CARP has to say

CARP, a nationwide not-for-profit group formerly called the Canadian Association for Retired Persons, was recently on Parliament Hill to meet dozens of MPs as it lobbies for law adjustments.

Wanda Morris, vice-president of CARP, stated that CARP is requesting for the unfunded pension liability be provided priority position so it goes to the front of the line.

Pensioners hold no priority when it pertains to dividing up assets through a bankruptcy, and Ms. Morris wants protection for retirees for underfunded defined benefit pensions when the company goes through a restructuring or into bankruptcy.

Ms. Morris stated that along with the practically 16,000 retirees at Sears, CARP estimates that there are about 1.3 million workers in Canada that possibly could be in danger with defined advantage pension. Sears Canada closing all stores has made the plight of retirees a front and centre issue for CARP.

Sears Canada Closing: Private Member’s Bill C-372 passes First Reading

On Oct. 17, Bloc Québécois MP Marilène Gill suggested a member’s bill, C-372. The intent is to change the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.

The change attempts to correct the injustice dealt with by retired workers whose pension as well as group insurance policy benefits are not secured when their company declares bankruptcy or undergoes restructuring. The changes are a result of the Sears Canada employees and retirees treatment, as a result of Sears Canada closing locations.

Sears Canada Closing: What the NDP has to say

Hamilton Mountain MP Scott Duvall plans to introduce his very own private member’s bill to try to solve this problem. While he notes he has actually had talks with Gill, he claimed his suggestion will be a bit different.

Mr. Duvall specifies that his bill will amend the regulations from where it’s worded currently. He wishes that when a company goes into bankruptcy protection, the pensioners will be a secured creditor. He is also responding to the process which has led to Sears Canada closing store locations,

Sears Canada Closing: Bloc MP Marilène Gill and her Bill C-372

On October 17, 2017, MP Marilène Gill rose in Parliament and stated:

“Mr. Speaker, I have the honour to introduce my first bill in the House today, a private member’s bill that seeks to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.

This bill seeks to correct the injustice faced by retired workers whose pension plans and group insurance plans are not protected when their company goes bankrupt or undergoes restructuring.

I will do everything in my power to ensure that this bill receives royal assent, that way, we can help prevent retirees, like those from my riding who are here today to support me, from losing their pensions, and improve the existing legislation by giving pension plans’ unfunded liabilities preferred creditor status, among other things. I hope my colleagues will be supporting this bill.”

Sears Canada Closing: Can it get Royal Assent?

BILL C-372 which passed First Reading on October 17, 2017 is named “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans)”.

Private member’s bills such as this one rarely pass the House. However, I thought it would be useful to describe what Ms. Gill’s views are as a result of Sears Canada closing.

Below is my analysis of how BILL C-372 proposes to amend the Bankruptcy and Insolvency Act (Canada) (BIA) and the Companies’ Creditors Arrangement Act (Canada) (CCAA). The impetus of course is certain high-profile corporate restructurings/failures with underfunded defined benefit pension plans. With Sears Canada closing, Ms. Gill put forward her private member’s bill.

The most recent corporate failure which initiated her private member’s bill of course was a result of Sears Canada closing.

Sears Canada Closing: Bill C-372 proposed BIA and CCAA amendments

Bill C-372 wishes to amend the BIA as follows:

In order to be approved by the Court, a corporate restructuring proposal under the BIA, for a company with a prescribed pension plan, the Proposal must include payment in full of any unfunded pension liability or solvency deficiency calculated at the time of the filing of the Notice of Intention To Make A Proposal (NOI) or the Proposal if there is no NOI filed.

The unfunded pension liability or solvency deficiency calculation is by section 9 of the Pension Benefits Standards Regulations, 1985.

In a receivership, the receiver is personally liable for paying any unfunded pension liability or solvency deficiency but only from the proceeds of the sale of current assets.

In either a receivership or corporate bankruptcy, the charge for any unfunded pension liability or solvency deficiency would rank ahead of the charge of any other secured creditor.

The Officers and Directors of the company are not entitled to the benefit of this secured charge. Even if they are participants in the pension plan that has the unfunded pension liability or solvency deficiency.

In a corporate restructuring proposal or bankruptcy, the amount not paid under the Wage Earner Protection Program Act (Canada) (WEPPA). It is the amount to adequately indemnify the beneficiaries in the event the employer ceases to take part in a group insurance plan. Such a plan is one that provides for the payment of benefits to, or in respect of, employees or former employees for, among other things, life, disability, health or dental insurance is a preferred claim. It will be a preferred, but still an unsecured claim.

The amount equal to the difference between any severance pay or compensation in lieu of notice owed by an employer to an employee and any amount previously paid by the trustee for that severance pay or compensation in lieu of notice.

There are also proposed amendments to the CCAA in Bill C-372. It is to bring the same changes in that statute as described above. The intent is that the treatment under both statutes is the same. I won’t repeat those again.

sears canada closing

Sears Canada Closing: Will Bill C-372 become law?

As I stated above, it is very rare that a private member’s bill becomes real legislation. The other reason is that the Liberals hold a majority in Parliament. If they don’t want it to pass, it won’t.

On October 25, 2017, Innovation Minister Navdeep Bains said the Liberal government has no plans to change laws to protect pensioners in the wake of Sears’ bankruptcy. That is a pretty definitive statement.

So right now it seems there is a lack of political will to make the proposed law amendments. I suspect that on a financial basis, there will also be opposition for the following reasons:

In most cases, it will be impossible to have a successful large corporate restructuring if 100% of unfunded pension liability must be paid. Therefore, jobs will not be saved if we have more corporate bankruptcy filings instead of restructurings.

Lenders will have to now ignore current assets in the borrowing base of corporations. This will make corporate borrowing much more difficult for solvent corporations with pension plans to carry on business.

Lenders may have to reserve the entire amount of any unfunded amounts. They will rank ahead in a receivership or bankruptcy.

Severance pay or compensation in lieu of notice will now be a claim ranking ahead of trade suppliers in a corporate restructuring or corporate bankruptcy. This may alter the amount of an unsecured credit line a supplier will be willing to give to a customer.

It will cause more chaos to normal lending and trade practices which will be a problem for any government.

Claims under the group health indemnity provisions may not result in any real benefit to employees of a company going through either a corporate restructuring or bankruptcy. There is rarely funds left over after the claims of secured creditors.

We will keep monitoring this important issue. We will update you when MP Scott Duvall puts forward his private member’s bill and as other matters arise.

Sears Canada Closing: What To Do If You Or Your Company Need A Financial Restructuring?

It is now Sears Canada closing time. If you’re attempting to discover a means to restructure your firm’s debt, so that you can avoid a Sears Canada closing scenario, call Ira Smith Trustee & Receiver Inc. If we meet with you early on, we can create a restructuring and turnaround strategy. That way your company won’t have to be like Sears Canada closing.

Our strategy for every person is to create a result where Starting Over, Starting Now occurs, starting the minute you walk in the door. You’re simply one telephone call away from taking the crucial steps to go back to leading a healthy, balanced and tension free life.

sears canada closing

Brandon Blog Post

RECEIVERSHIP BANKRUPTCY DIFFERENCE CANADA: WHAT A TRUSTEE SAYS ABOUT IT

Post author By Brandon Smith
Post date February 15, 2017

Introduction

The purpose of this blog is to discuss the corporate receivership bankruptcy difference Canada. Every general security agreement defines exactly how the secured lender will certainly deal with obtaining his/her cash when it comes to default. One means to do this is by selecting a receiver.

A receiver or receiver/manager is an individual/company licensed by the Federal Government to act as a licensed insolvency trustee. The receiver can be appointed either by an instrument in writing or by a court order. A receivership administration falls under the Bankruptcy and Insolvency Act (Canada) (BIA), where the receiver takes possession and control over the assets to of the insolvent business.

The receiver or receiver/manager will certainly seize the properties covered under the lender’s security or covered by the court order. The receiver will also develop a plan to market the assets for sale. After paying any type of priority claims as well as the receivership administration costs, the net funds are paid to the first secured creditor.

receivership bankruptcy difference canada

Can you have both at the very same time?

Sometimes there is both a bankruptcy plus a receivership. Receivership is a treatment for secured creditors, such as financial institutions. Bankruptcy is a treatment for unsecured creditors.

Receivership bankruptcy difference Canada: Bankruptcy

A business could be placed right into bankruptcy by any one of the following methods:

a creditor could apply for a bankruptcy order putting the business right into bankruptcy through the courts;
the directors could assign the corporation right into bankruptcy;
a restructuring proposal could be voted down at the meeting of creditors; or
a restructuring proposal could be annulled by the trustee or creditor for non-compliance.

There are many reasons that a corporation could go into bankruptcy. These consist of the following:

The firm has defaulted under its premises lease, the landlord distrains against the firm’s possessions. A bankruptcy or a notice to make a proposal filed before the property owner finishes the sale of assets defeats the lease distraint.
The firm has unsecured assets (i.e., possessions without a lender’s security registered against it) that are available to be realized upon. Also, the firm cannot carry on business any longer.
If a restructuring proposal is submitted, but the company could not get adequate funding to continue its business and complete the proposal.
To reorganize the statutory priorities.
To officially bring the business to an end as well as give a complete report to the creditors so they will not believe the principals engaged in any kind of misbehaviour.

Receivership bankruptcy difference Canada: Corporate Bankruptcy

In a company bankruptcy, the licensed insolvency trustee seizes all the business’s properties plus deals with all the creditors. The directors and management of the company accept the authority of the trustee; if requested by the trustee, they can as well as aid the trustee in his/her tasks. This eliminates them from all the stress of dealing with the creditors as well as running the cash-starved business.

Receivership bankruptcy difference Canada: Making the Application to Put a Debtor Into Bankruptcy

If a creditor is incapable of recovering the amount owed to it with any one of the readily available techniques which can be done, they may look to a bankruptcy application. This is especially so having actually acquired a judgment for the quantum owing which has not been satisfied. The BIA allows for the licensed insolvency trustee, once appointed, to take possession in an organized way, the assets of an insolvent debtor, to realize upon those assets and to then distribute the funds according to the scheme of priority in the BIA.

The BIA allows for the benefit of both bankrupts and their creditors. While the Act is not planned for usage as a device for the collection of private financial obligations, this may be the case in specific situations.

Receivership bankruptcy difference Canada: When is a Creditor Allowed making a Bankruptcy Application?

An unsecured creditor could apply for a bankruptcy order where:

the lender is owed $1,000 or even more on an unsecured basis, and
there has actually been an act of bankruptcy by the borrower within the 6 months that come before the filing of the application. Keep in mind that a secured lender can value its security at less than the overall amount owing to develop a partly unsecured debt.

The BIA states that acts of bankruptcy consist of the following:

if in Canada or elsewhere he makes an assignment of his property to a trustee for the benefit of his creditors generally, whether it is an assignment authorized by this Act or not;
if in Canada or elsewhere the debtor makes a fraudulent gift, delivery or transfer of the debtor’s property or of any part of it;
if in Canada or elsewhere the debtor makes any transfer of the debtor’s property or any part of it, or creates any charge on it, that would under this Act be void or, in the Province of Quebec, null as a fraudulent preference;
if, with intent to defeat or delay his creditors, he departs out of Canada, or, being out of Canada, remains out of Canada, or departs from his dwelling house or otherwise absents himself;
if the debtor permits any execution or other process issued against the debtor under which any of the debtor’s property is seized, levied on or taken in execution to remain unsatisfied until within five days after the time fixed by the executing officer for the sale of the property or for fifteen days after the seizure, levy or taking in execution, or if any of the debtor’s property has been sold by the executing officer, or if the execution or other process has been held by the executing officer for a period of fifteen days after written demand for payment without seizure, levy or taking in execution or satisfaction by payment, or if it is returned endorsed to the effect that the executing officer can find no property on which to levy or to seize or take, but if interpleader or opposition proceedings have been instituted with respect to the property seized, the time elapsing between the date at which the proceedings were instituted and the date at which the proceedings are finally disposed of, settled or abandoned shall not be taken into account in calculating the period of fifteen days;
if he exhibits to any meeting of his creditors any statement of his assets and liabilities that shows that he is insolvent, or presents or causes to be presented to any such meeting a written admission of his inability to pay his debts;
if he assigns, removes, secretes or disposes of or attempts or is about to assign, remove, secrete or dispose of any of his property with the intent to defraud, defeat or delay his creditors or any of them;
if he gives notice to any of his creditors that he has suspended or that he is about to suspend the payment of his debts;
if he defaults in any proposal made under this Act; and if he ceases to meet his liabilities generally as they become due.
if he ceases to meet his liabilities generally as they become due.

Keep in mind that in most of the situations above, the creditor does not need to show that the borrower cannot pay various other creditors. In the last situation, the creditor should show that more than just its own debt is not being paid. Unique situations would differentiate matters though.

Unique scenarios can consist of allegations of fraud, near-fraud or those other transactions which fall under the types that would seem to be attackable by a trustee. At least on a prima facie basis.

It should, nonetheless, be remembered that stringent evidence of both your unsecured debt and an act of bankruptcy is required to have an individual or business judged bankrupt.

Receivership bankruptcy difference Canada: Under What Circumstances Should a Creditor Make An Application For A Bankruptcy Order?

Making an application for a bankruptcy order to put a debtor into bankruptcy is no little job. Prior to choosing this option, consider the following:

the presence and amounts of claims that could take priority over your unsecured creditor status;
the dollar measure of unsecured debt ranking on the same level with your financial debt (i.e., each unsecured creditor is paid according to the calculated share based on the measure of his/her debt);
the existence of questionable transactions or transfers undervalue within the three-month to five-year evaluation period before the declaration of bankruptcy;
your very own history of repayments from the debtor/borrower in addition to the normal payment patterns in the 3 months before the date of bankruptcy; as well as
the legitimacy of any kind of security you might hold.

Receivership bankruptcy difference Canada: The Bankruptcy Application Can Be Very Useful

Think about:

has the debtor actually moved the residential property to a related party for inadequate or no consideration;
where the debtor does not want to lose a specific part of its property (e.g. a private yacht, unique cars and truck or shares in a firm) or does not want its transactions and events to be inspected by a trustee and/or creditors;
the debtor (being an individual) expects an inheritance;
where the debtor (being an individual) needs to be an officer, director and/or shareholder of several businesses;
the debtor (being an individual) might have his/her expert certification or licence from which he/she derives income compromised or lost as an outcome of being ruled a bankrupt;
when the bankruptcy of the debtor would cause him/her to lose the ability to generally conduct business, such as required to use a trust account or employment requires the need to be bonded; or
being a bankrupt would cause the company or individual to lose the advantage of a specific useful agreement, lease, or company.

Receivership bankruptcy difference Canada: How Does a Creditor Make The Application For A Bankruptcy Order?

The creditor desiring to file the application will certainly need a lawyer to prepare the needed documents to make the bankruptcy application. The lawyer will serve the motion material and attend for the bankruptcy order. For an uncontested motion, the lawyer appears before the Bankruptcy Registrar who is a Master of the Court. If opposed, the matter can only be heard by a Judge.

The creditor has to additionally make arrangements with a licensed insolvency trustee to act will need to guarantee the trustee’s fee and costs incurred by the trustee where there are not enough proceeds from the sale of assets. A lot of times it is likewise needed to give the trustee a cash retainer.

When the Bankruptcy Order is made, the licensed insolvency trustee starts the bankruptcy administration. All actions against the insolvent are stayed.

Receivership bankruptcy difference Canada: What If You’re Company Has Too Much Debt?

Is your company insolvent? Are you looking for solutions? The Ira Smith Team is here to offer alternatives to restructuring and turnaround services however, if required, we also act as a licensed insolvency trustee in bankruptcy matters. We offer help in Vaughan as well as throughout the GTA.

Are you an individual or company who feels your situation is hopeless? Ira Smith Trustee & Receiver Inc. can prepare and put in place the plan MADE JUST FOR YOU. The plan will free you from the burden of your financial challenges. With our help, you will go on to live a productive, stress-free, financially sound life.

Our motto is Starting Over, Starting Now! Ira Smith Trustee & Receiver Inc. can help you overcome your financial difficulties. Contact us today.

3 Types of bankruptcies introduction

3 types of bankruptcies: Voluntary and involuntary bankruptcy

3 types of bankruptcies: The bankruptcy application – the involuntary method

3 types of bankruptcies: Acts of bankruptcy

3 types of bankruptcies: What a bankruptcy application must look like

3 types of bankruptcies: The bankruptcy order

3 types of bankruptcies summary

Bankruptcy trustee in Ontario: Introduction

Bankruptcy trustee in Ontario case background information

The bankruptcy trustee in Ontario case before the Court of Appeal

The fascinating part (for me anyway) of the Court of Appeal’s decision

When was e3m’s knowledge of its claim?

So what does this mean for a bankruptcy trustee in Ontario?

Bankruptcy trustee in Ontario Canada conclusion

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

Bankrupting a corporation: Introduction

There are 3 ways for a company to be bankrupt

Information and documents a Trustee needs

The Trustee’s job

What the Directors should be concerned about

Are you a Corporate Director?

Best corporate bankruptcies: Introduction

Best corporate bankruptcies: The ServiCom shutdown

Best corporate bankruptcies: It was tough

Best corporate bankruptcies: A Christmas miracle

Best business insolvencies: When jobs are saved

Best business insolvencies: What about your company?

How bankruptcies work for businesses: Introduction

How bankruptcies work for businesses: Where we start

How bankruptcies work for businesses: The proprietorship

How bankruptcies work for businesses: Incorporated businesses

How bankruptcies work for businesses: Know your numbers

How bankruptcies work for businesses: Now that we have the information…

How bankruptcies work for businesses: What if informal restructuring isn’t possible

How bankruptcies work for businesses: The reality for the majority of Canadian companies

How bankruptcies work for businesses: Company bankruptcy

How bankruptcies work for businesses: Receivership or bankruptcy

How bankruptcies work for businesses: The entrepreneurial company reality

How bankruptcies work for businesses: Does your company have too much debt?

Form 31 proof of claim: Introduction

What is the form 31 proof of claim form?

Form 31 proof of claim: Form 31

Form 31 proof of claim: Acceptability of proof of claim

Does a creditor have to file a claim?

Form 31 proof of claim: My example

Can I file a proof of claim after the deadline?

How do I object to a form 31 proof of claim?

Form 31 proof of claim: Do you need help?

330 University Avenue: Introduction

330 University Avenue: Brief building history

330 University Avenue: The most noticeable part of the building The weather beacon was added in 1951. Its colour codes sum up the weather report at a look. Environment Canada out of Toronto Pearson International Airport revises the weather details 4 times each day.

330 University Avenue: 330 university avenue 8th floor

330 University Avenue: The corporate insolvency matters overview

330 University Avenue: Do I need a lawyer to appear at 330 University Avenue?

330 University Avenue: Is your company going to be in Court either for a restructuring or as a stakeholder?

Canada bankruptcies: Introduction

Canada bankruptcies: Video

Canada bankruptcies: The 10 standard steps in a voluntary corporate bankruptcy

Step 1 – Initial meeting with Trustee

Step 2 – Directors meeting

Step 3 – Signing all documents

Step 4 – Filing with Official Receiver

Step 5 – Bankruptcy certificate

Step 6 – Trustee takes possession

Step 7 – Trustee notifies known creditors

Step 8 – Trustee safeguards assets

Step 9 – Trustee prepares the report

Step 10 – The First Meeting of Creditors

Is your company experiencing financial difficulty?

Sears Canada Closing: Introduction

Sears Canada Closing: What CARP has to say

Sears Canada Closing: Private Member’s Bill C-372 passes First Reading

Sears Canada Closing: What the NDP has to say

Sears Canada Closing: Bloc MP Marilène Gill and her Bill C-372

Sears Canada Closing: Can it get Royal Assent?

Sears Canada Closing: Bill C-372 proposed BIA and CCAA amendments

Sears Canada Closing: Will Bill C-372 become law?

Sears Canada Closing: What To Do If You Or Your Company Need A Financial Restructuring?

Introduction

Can you have both at the very same time?

***Bankruptcy trustee in Ontario*: Introduction**

***Form 31 proof of claim*: Acceptability of proof of claim**

330 University Avenue: The most noticeable part of the building

The weather beacon was added in 1951. Its colour codes sum up the weather report at a look. Environment Canada out of Toronto Pearson International Airport revises the weather details 4 times each day.