Tag: restructuring

IS GOODWILL A NON PROFIT ORGANIZATION? ARE YOU SCARED BECAUSE YOUR COMPANY HAS TURNED INTO ONE?

Post author By Brandon Smith
Post date March 14, 2016

Our previous vlog

Since our last post, BUSINESS RESTRUCTURING PROPOSAL: REASONS WHY GOODWILL TORONTO IS NOT ALWAYS ENOUGH, people have asked me: is Goodwill a non profit organization? The answer is yes.

The Goodwill Toronto bankruptcy has confused and astonished many people. After all, how can Goodwill, a non profit organization, go bankrupt? Isn’t the very nature of a non-profit or not-for-profit that it doesn’t have to make a profit? Yes, but by the same token, it also should not sustain losses either. At our Firm, we each volunteer at a different non-profit whose cause we believe in. The non-profit’s annual budget is not supposed to sustain a loss, but in carrying out the aims of the organization, it also does not have to make an operating profit unless of course the non-profit is trying to amass funds to designate for a specific purpose.

Unfortunately to the amazement and dismay of many, Goodwill Industries of Toronto, Eastern, Central and Northern Ontario has filed for bankruptcy, three weeks after abruptly closing its doors. It has over $6 million in debt with approximately $4.2 million owed to former employees in vacation entitlement and severance. This resulted in the closure of 16 Goodwill stores, 10 donation centres and two offices, affecting more than 430 workers. Is Goodwill a non profit organization? Apparently so!

Leaving the employee vacation pay and severance liability issue aside, I would suggest that the balance of the debt, as noted below almost $2 million, represents losses suffered from prior periods. Somewhat tongue in cheek, the other answer to the question, is Goodwill a non profit, is, YOU BET!

Is Goodwill a non profit organization? YES!

Now, more information is known, so, we want to provide you with an update on the Goodwill situation, mainly from the Goodwill Toronto bankruptcy filing documents.

Goodwill’s Creditors:

Number of unsecured creditors: 711
Amount owing: $6 million
Number of creditors not former staffers: 158 or 22%
Total owing unsecured creditors not former staffers: $1.7 million or 28%

Main Unsecured Creditors:

Anita’s Driving Academy: $2,080
Blueprint Hair Studio: $840
Brown’s Fine Foods (owns Goodway in Kingston): $7,586.09
City of Mississauga parking control: $41.00
Dr. Eric Domingo (provides general and cosmetic dentistry): $3,571.08
Dr. Nosenet Bollo-Kamara (provides family and cosmetic dentistry) $2,999.05
Dr. Robert Lubin (family and cosmetic dental care): $7,143.72
Ducati Shoes: $1,372.00
Goodwill Industries Intl: $16,827.29
Adore (dress shop): $1,397
Larj Consulting Inc. (Former TCHC CFO Len Koreonos): $19,930.38
Ministry of Community and Social Services: $150,000
Region of Peel: $34,547.30
Royal Bank Visa: $12,371.95; $1,423.83; $2,746.13; $39,413.32; $998.06; $224.87; $2,035.84
Samarqand Food & Bakery: $23,894.45
Tru It Solutions (IT firm formed by former TCHC employees): $29,680

Restructuring is a bankruptcy alternative, you just have to be able to continue carrying on business!

After its closure, Goodwill Toronto wished to enter into a restructuring, but the proposed restructuring plan would have required millions of dollars of investment for an opening balance to assist in the payment of arrears and any reopening costs. And it would also have needed concessions from the unionized staff, including a reduction in hours, layoffs, labour efficiency improvements, and benefit costs. In the end all attempts at restructuring failed and the CEO, Ms. Keiko Nakamura, resigned. As we said in our earlier vlog: “it takes money to have a successful business restructuring proposal”.

How could a not-for-profit go bankrupt?

The reality is that not-for-profits are not immune from financial problems and insolvency. Not-for-profits can suffer from the same financial problems that plague their for-profit cousins and they too can seek protection under the Bankruptcy and Insolvency Act (Canada), also known as the BIA. No individual or company is immune from financial problems. And sometimes bankruptcy is the solution.

What should I do if my company or organization is in financial trouble?

However, there are usually options and alternatives to explore before declaring bankruptcy. If you’re suffering from serious financial problems and/or are insolvent, contact Ira Smith Trustee & Receiver Inc. for a consultation. You may have what seems like insurmountable problems, but we do have the answers.

If your company or organization is trapped with too much debt, you need a professional trustee to help you manage the situation and create a viable business restructuring proposal (either under the BIA or the Companies’ Creditors Arrangement Act –CCAA) before it reaches a critical stage where bankruptcy is your only option. We have been able to help many companies carry out a successful business restructuring proposal.

Successful completion of such a program, will free you from the burden of your company’s financial challenges to go on to be a productive, profitable employer allowing management to focus on business growth and not be plagued by debt problems.
Contact us today so that you can put your financial problems behind you Starting Over, Starting Now.

So, is Goodwill a non profit organization? Not any more in Toronto!

Tags bankrupt, Bankruptcy, closure of 16 Goodwill stores, creditors, declaring bankruptcy, Goodwill, Goodwill Industries of Toronto Eastern Central and Northern Ontario, Ira Smith Trustee, is goodwill a non profit organization, Keiko Nakamura, non profit, not-for-profit, restructuring, trustee, unsecured creditors

Brandon Blog Post

HOW ARE IDENTITY THEFT AND CORPORATE BANKRUPTCY RELATED?

Post author By Brandon Smith
Post date September 1, 2015

Identity theft definition

Identity theft and fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain[1]. When we think of identity theft we have images of shady characters lurking in the shadows who perpetrate fraud upon us for the purposes of stealing our personal information.

Identity theft awareness

As a result we’re often remiss in really understanding who has access to our personal information and what an assumed trusted source can legally do with it. Did you know that when a company goes bankrupt, your personal information can be sold to the highest bidder, leaving you potentially exposed to identity theft?

Identity theft company bankruptcy

According to David Fraser, a privacy law expert at McInnes Cooper, when a company goes bankrupt, it is legally obligated to sell off its assets in order to pay off its creditors. Although information is not property like a computer or a printer, records are considered an asset of the business and can be sold. However, the conditions of the privacy policy usually still hold, and the data can only be used for the purposes for which it was originally collected. Although this sounds like your personal information would remain secure, that is not always the case.

Nicholas Johnson, a professor at Sheridan College, reviewed the privacy policies of about 30 websites and uncovered some startling information. He looked closely at what kinds of information companies were asking for and what protections they offered, if any, in the event of a reorganization. He then detailed how personal information can easily fall into the wrong hands.

Most companies have privacy policies that allow for customer data to be transferred to a third party in the case of bankruptcy or a restructuring
Almost every company requested email address, first name and last name from its customers
In about 10 cases, companies asked customers to opt-in to email notifications or for credit card information
Few companies actually detailed what would happen to this information if the company was sold

Identity theft is a real problem and the number of victims is growing at an alarming rate. We need to be more diligent about safeguarding our personal information. What, if anything, are you doing to protect your personal information?

Problem from identity theft

If you’ve been a victim of identity theft and are now experiencing serious financial problems or have serious debt issues for any reason, contact the Ira Smith team as soon as possible. We work with individuals and companies throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Don’t let debt ruin your life. Contact us today.

[1] United States Department of Justice website.

Tags bankrupt, Bankruptcy, Corporate Bankruptcy, customer data, identity theft, identity theft and fraud, identity theft awareness, identity theft company, identity thief, personal information, privacy policies, problem from identity theft, restructuring

Brandon Blog Post

STALKING HORSE BID: DO YOU REALLY WANT 2 STALK YOUR ADORABLE HORSE?

Post author By Brandon Smith
Post date July 21, 2015

stalking horse bid

This blog was originally published on July 21, 2015. It was updated on March 22, 2021.

Bankruptcy Sales: What Is a Stalking-Horse Bid?

A stalking horse bid, in the Canadian insolvency context, is an attempt by a company (and/or its Monitor, Receiver or Trustee ) in a Court supervised insolvency proceeding, to set what will be the baseline that must be met and beaten by any other bids for the assets. The intent is to maximize the value of its assets as part of a Court supervised sales process and to discourage any bid below a certain value.

A stalking horse is a process that allows a potential buyer (the stalking horse bidder) to make a public bid for a company’s assets in order to set a floor price for the amount of money to be received by the company’s creditors in a (bankruptcy) sale. The stalking horse bidder will get to purchase the company’s assets if no other bidder comes forward. The stalking horse provision allows for the bidding process terms and conditions to be set in a court-supervised sale.

In this Brandon Blog, I describe the stalking horse bid process and how it works

What’s a stalking horse bid? Example of a stalking horse bid

According to Wikipedia:

“The term stalking horse originally derived from the practice of hunting, particularly of wildfowl. Hunters noticed that many birds would flee immediately on the approach of humans, but would tolerate the close presence of animals such as horses and cattle. Hunters would therefore slowly approach their quarry by walking alongside their horses, keeping their upper bodies out of sight until the flock was within firing range. Animals trained for this purpose were called stalking horses.”

In an insolvency context, a stalking horse bid stands to test the market to see how the market values the assets for sale. If the market values the assets less than the amount of the stalking horse bid, then no one will bid higher and the party who made the stalking horse bid will be successful in acquiring the assets.

If the market values the assets more than the amount of the stalking horse bid, the higher offers will be made for the assets and for the Court to consider for approval. Presumably, a higher offer will be approved, the purchaser will purchase the assets and the stalking horse bid will not prevail.

How a Stalking-Horse Bid Works

The stalking-horse bid method allows a distressed company to avoid receiving low ball bids as its assets are being sold. Once the stalking-horse bidder has made its offer and it has been negotiated and court-approved, other potential buyers may submit competing bids for the company’s assets.

By setting the low end of the bidding range, the insolvent company hopes to realize a higher price on its assets. Insolvency proceedings are public. The public nature allows for the disclosure of more information about the deal and the buyer than what would be available in a private deal.

Stalking-horse bidders can generally negotiate which particular assets and liabilities it hopes to acquire. After the stalking horse bid is negotiated resulting in an asset purchase agreement, it will be necessary for the company, Receiver or Trustee to obtain Court approval of not only the stalking horse bid but also for the entire sales process to be implemented.

If the company is attempting to restructure and requires “bankruptcy protection”, then those corporate proceedings would be either under the Companies’ Creditors Arrangement Act (“CCAA”) or the Proposal provisions of the Bankruptcy and Insolvency Act (Canada) (the “BIA”). In that situation, it is the company making an application to the Court with the support and assistance of the monitor or proposal trustee.

If it is a corporate receivership or bankruptcy proceeding, then it is either the receiver or bankruptcy trustee making the application. In the case of bankrupt corporations, then it is the bankruptcy court that needs to approve the stalking horse bid, the entire sales process and approve the sale.

What does it take to get bankruptcy court approval?

When applying to the Court, approval for an entire sales process is being sought, a component of which is the stalking horse agreement. The Court has various considerations in determining if a stalking horse sale process should be approved. They are:

Is a sale transaction warranted at this time?
Will the sale benefit the whole “economic community”?
Do any of the debtors’ creditors have a bona fide reason to object to a sale process of the business?
Is there a better viable alternative?”

In the event the stalking horse bid is not the successful winner because of the other potential bidders at least one made a better offer, it is normal for the stalking horse purchaser to receive some form of compensation. The compensation is for the time, cost and resources invested to perform its due diligence, to make its offer which was found to be reasonable in the circumstances and to expose that offer to the marketplace to stand as a stalking horse bid, and for that bidder to not end up as the successful purchaser.

Our Firm has been involved in situations where the stalking horse bid has been both the successful bid unsuccessful bid. If the compensation, commonly known as break-up fees, is fair and reasonable, it will not dissuade other purchasers from coming forward in the sales process, and it will also be fair to the stalking horse bidder if they are unsuccessful. It is fair to the stalking horse bidder to have these bid protections incorporated into their offer.

The Court in considering the approval of a stalking horse bid also considers if the breakup fee, and the entire stalking horse bid, has been negotiated between arms’-length parties and has the support of the stakeholders involved in the insolvency proceeding.

The Pros and Cons of Being A Stalking Horse Bidder for Assets In Bankruptcy

There are various pros and cons to being a stalking horse bidder and making the stalking horse bid. First the advantages:

First to tie up the company’s management, perform due diligence thereby dealing exclusively with the company for the proposed purchase of its assets.
Gaining the advantage of time and access to the company’s financial information.
Having the time to be able to understand the company’s problems and challenges.
Getting under contract for the assets the purchaser wants to acquire.

The cons of making the stalking horse bid are:

Making sure that you set the break fee high enough to fully compensate the stalking horse bidder.
Not having too long a time period between approval of the stalking horse bid and the time when other bids must be submitted to avoid the assets or the company’s operations worsening through the process.
Would it have been better not to have been the stalking horse bidder and see how the company and its assets fare before having to submit a bid?
If the stalking horse bidder is not a secured lender, is there a likelihood the secured lenders will bid their security which will outbid yours?
If there is more than one acceptable bid, then an auction process is required to determine the successful bidder. The stalking horse bidder may not wish to participate in such an auction and will end up losing out.

Can a secured creditor credit bid? Cirque du Soleil agrees to ‘stalking horse’ takeover bid from lenders worth $375M

One of the most recent high-profile successful stalking horse bids was the Cirque du Soleil insolvency proceeding under the CCAA. In that case, a takeover proposal from the Cirque du Soleil’s secured creditors has been approved as the benchmark bid for a court-supervised auction of the insolvent entertainment company.

That is called a credit bid. When the secured creditor bids all or a portion of its outstanding loan. This will be done in situations where the secured creditor believes that the value of the assets to be sold is less than the amount owed, yet the company’s assets can be used to run a viable business. In that situation, the secured creditor would rather bid its security with the company debt to take over the assets.

By making a credit bid, the secured creditor potential purchaser does not need to come up with cash for the purchase price. However, cash will be required to make certain payments to parties the company business cannot operate without and to have working capital going forward.

If they bid the full amount of their loan and get outbid in other purchase agreements, it means they get fully paid out. Otherwise, they get the assets to run the company, bring it back to financial good health and profitability. Eventually, then they will sell the healthy company to recoup their money plus make a profit.

Stalking horse bid summary

If your company is experiencing financial difficulties, don’t waste your time stalking horses or any other animal. Seek the advice of your professional advisers. The earlier you seek financial help the more options will be open to you. Contact Ira Smith Trustee & Receiver Inc. today. We’ll review your corporate issues and come up with a sound plan so that Starting Over, Starting Now you can enjoy financial peace of mind.

stalking horse bid

Tags Bankruptcy, Bankruptcy and Insolvency Act, BIA, CCAA, Cirque du Soleil, Companies’ Creditors Arrangement Act, corporate insolvency, court, insolvency, monitor, Park Lane Circle, proposal, receiver, restructuring, stalking horse, stalking horse bid, stalking horse bidder, starting over starting now, trustee

Brandon Blog Post

TARGET CANADA LIQUIDATION BEGINS FEBRUARY 5; ATTENTION TARGET CANADA SHOPPERS

Post author By Brandon Smith
Post date February 5, 2015

The Target Canada liquidation plan for the sale of its inventory, fixtures, store leases and other real estate was approved by Order of The Honourable Regional Senior Justice Morawetz on February 4, 2015. In this blog, we will focus only on the Target Canada liquidation of the inventory, furniture and fixtures located at its retail stores, distribution centres and corporate head office. Hopefully, we will succeed in explaining it in plain English!

Target Canada sought and obtained creditor protection on January 15, 2015 under the Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36) (“CCAA”), a Canadian federal statute. As we indicated in our earlier blog, TARGET CANADA CLOSING: $5.4 BILLION AND COUNTING, the CCAA, which is normally used for the restructuring of insolvent corporations with debts over $5 million, in order to preserve all or a portion of the business and jobs. This time, rather than being used for a restructuring and turnaround, it is being used to provide for an orderly liquidation.

The closing of the Target Canada stores will put 17,600 people out of work over the next five months. The Initial Court Order provided for an Initial Stay Period was to expire on February 13, 2015. In order to carry out the Target Canada liquidation plan, part of the relief it sought and obtained was an extension of the Stay Period to May 15, 2015.

The two questions that we have been asked the most are: 1. what is the Target Canada liquidation plan for its inventory and chattels and how long will it take; and 2. will the suppliers receive everything they are owed from the liquidation?

The first question is easier to answer than the second. First, below in point form is a summary of the Target Canada liquidation plan for its inventory and chattels which is now approved by the Court:

An exclusive agent was approved to conduct the Target Canada liquidation of the inventory, furniture and fixtures located at the retail stores, distribution centres and corporate head office, to liquidate in its entirety.

The exclusive agent is a contractual joint venture comprised of Merchant Retail Solutions ULC (“ULC”), Gordon Brothers Canada ULC and GA Retail Canada. ULC will collectively act as the exclusive agent.

The current time estimate is that the Target Canada liquidation will end no later than May 15, 2015 for the stores, April 30, 2015 for the distribution centres and March 31, 2015 for the corporate office. Circumstances may alter this schedule, but this is the current plan.

All sales will be “final sales” and “as is” and all advertisements and sales receipts will reflect same.

The exclusive agent has guaranteed that Target Canada will receive a net minimum amount of 74% of the “Cost Value” of the Merchandise (the “Guaranteed Amount”), computed in accordance with the Agency Agreement, and subject to adjustment in accordance with the Agency Agreement, if: (i) the aggregate Cost Value of the Merchandise is less than $445 million or greater than $475 million; and/or (ii) the Cost Value of the Merchandise as a percentage of the Retail Price of the Merchandise exceeds 63%. (This part was not plain English!!).

What this means is that if there is no adjustment to the Guaranteed Amount calculation based on the Agreement, Target Canada is guaranteed to receive a minimum estimated amount of $340 million from the liquidation of the inventory, furniture and fixtures (based on an average Cost Value of $460 million).

Now for the second question. Target Canada owes money to nearly 1,800 businesses around the world, from India to Shanghai and Brampton to Winnipeg. It is impossible to estimate at this time what suppliers may expect to receive from the Target Canada liquidation, for the following reasons:

There is no current estimate for what the net proceeds may be from the sale of the Target Canada store leases and real estate.

There will be further deductions from the Target Canada liquidation including the:

trust claims of any party, statutory or otherwise, against the assets, properties and undertaking of Target Canada;
operating costs and liquidation specific costs for which Target Canada will have used its own cash flow rather than having borrowed those funds;
exclusive agent’s Charge and Security Interest (on the Limited Inventory Charged Property only);
Administration Charge (to the maximum amount of $6.75 million);
KERP Charge (to the maximum amount of $6.5 million);
Directors’ Charge (to the maximum amount of $64 million);
Financial Advisor Subordinated Charge (to the maximum amount of $3 million); and
DIP Lender’s Charge.

The final amount of claims to ultimately be filed and admitted in the Target Canada liquidation are unknown. All we know is that in its initial motion material, Target Canada stated that it owed a total of $5.1 billion, of which $3.1 billion was owed to an entity related to Target Corporation in the United States. Target Corporation has stated that it will subordinate its $3.1 billion claim to those of the unsecured creditors.

What claims may come before the claims of unpaid suppliers? The unpaid suppliers are ordinary unsecured creditors. The scheme of distribution, which has not been developed yet by Target Canada or submitted to the Court for approval, will have to reflect that the claims of trust claimants, other secured creditors and preferred creditors must be paid first before the claims of the ordinary unsecured creditors.

On paper, it seems that the Target Canada liquidation will provide sufficient proceeds to pay off all creditors in full, with assets and liabilities both in the $5-billion range. But the true value of the recorded assets will be less than stated. So for now, this second question cannot be answered.

We will continue to watch and blog about the Target Canada liquidation. If your business is showing signs of financial stress, contact Ira Smith Trustee & Receiver Inc. before your business problems lead to your business closing. The earlier you begin to deal with debt, the more options you’ll have. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can live a debt free life.

Tags 17, 600 employees, CCAA, Companies’ Creditors Arrangement Act, creditor protection, Debt, Ira Smith Trustee & Receiver Inc., liquidation plan, restructuring, restructuring of insolvent corporations, starting over starting now, Target Canada, Target Canada liquidation, Target Corporation

Brandon Blog Post

TARGET CANADA SEEKS COURT APPROVAL FOR LIQUIDATION

Post author By Brandon Smith
Post date February 1, 2015

This blog about Target Canada is courtesy of the article written by Francine Kopun, Business reporter, The Toronto Star, published in the Saturday, January 31, 2015 edition. Our Ira Smith is again quoted.

Target Canada, Francine Koupan, Ira Smith, starting over starting now, Target Corporation, liquidation, bankruptcy sale, bankruptcy, notices of termination — This image courtesy of The Toronto Star, January 31, 2015

Target Corporation announced Jan. 15 that it was pulling out of Canada, less than two years after opening its first stores. Instead of turning a profit within a year as expected, the company has lost $7-billion.

Liquidation sales at Target Canada stores could begin as early as Thursday, with its properties and leases going up for sale at the same time, according to new court documents.

It was the Minneapolis-based discount retailer’s first international expansion attempt. Canadian stores were run through a wholly owned, indirect subsidiary called Target Canada Co.

Target Canada is to present a motion to the court on Wednesday asking for approval to appoint a joint venture of liquidation companies to sell off the contents of its 133 stores across Canada.

If the motion is approved by the court, the sale could begin the next day.

“The Target Canada Entities believe that it is crucial to begin a sales process immediately in order to implement the orderly wind down of the business and to maximize the amounts available to their respective stakeholders,” according to the document.

Between them, the liquidation companies have conducted nearly all major retail liquidations in Canada, including Eatons, Dylex, Bombay, Zellers and currently, Mexx.

According to the court documents, notices of termination have been sent to the vast majority of 17,600 employees – almost half of whom work at Target stores and offices in Ontario. The head office in Mississauga is being operated with a reduced team focused on winding down the business in an orderly fashion.

Target Corporation has also agreed to increase the employment trust to $90-million from $70-million (Canadian), to ensure the Canadian employees receive their full severance payout.

The liquidation is to be completed no later than May 15, but sales at some stores are expected to be finished as early as the end of March, according to the documents.

The company has stipulated that no signs shall advertise the sale as a “going-out-of-business sale,” or “bankruptcy sale,” and all fixtures, furnishings and equipment must go out the back doors of the buildings, after shopping hours.

Target Canada is putting all its leases and properties up for sale at the same time, publishing national ads as soon as practicable, to solicit bids as early as March 5.

“It’s not an ‘en bloc’ sale. It will, I am sure, turn out to be multiple sales. I doubt very much that one party will want to take all the real estate, but it’s one process they’re seeking approval for,” said Ira Smith, of Ira Smith Trustee & Receiver Inc.

In addition to numerous store leases, office space leases and distribution centre facility leases, Target Canada owns three distribution centres: in Milton, Calgary and Cornwall.

The stores range in size from 88,700 square feet in Corner Brook, Nfld., to 157,500 square feet at the recently opened Toronto Stockyards location.

Don’t wait until your business loses so much money that the only option is liquidation through a receivership or bankruptcy; you need professional help long before then in the form of a trustee. Contact Ira Smith Trustee & Receiver Inc. as soon as possible after the first sign that your business may be in trouble. If your company is in serious debt, from an ill-conceived start-up or otherwise, there are many options including a review & monitoring and then a restructuring & turnaround in order to preserve the business and jobs.

We approach every file with the attitude that financial problems can be solved given immediate action and the right plan for you. Business problems are the enemy that can be conquered and Starting Over, Starting Now we can get your viable business restructured and nursed back to financial health.

Tags Bankruptcy, bankruptcy sale, Francine Koupan, Ira Smith, liquidation, monitoring, notices of termination, receivership, restructuring, review, starting over starting now, Target Canada, Target Corporation, turnaround, viable business

Brandon Blog Post

LOANS TORONTO NO CREDIT CHECK: A DEBT SOLUTION?

Post author By Brandon Smith
Post date June 5, 2014

I never realized that loans Toronto no credit check was such a popular topic. I want to tell you about three experiences that I had in the past few days. They are all separate, yet all related.

Revelation #1 – You can’t even buy beer with bad credit!

Last Friday, we were having the whole family over for dinner. The weather was so warm and pleasant, that we were going to have a BBQ and eat outdoors on the back deck. I went to The Beer Store to pick up some additional beverages and when I went to check out, I had my first revelation. At the front of the line was a fellow paying for his beer by cheque. I never even realized that you could do that. The clerk inspected the cheque and then asked the gent for identification, and he produced his drivers licence. The clerk ran his information through The Beer Store’s electronic system and politely advised the gentleman that he has been declined to pay by ordinary cheque, and that he could only pay by cash, certified cheque or credit card. The man could not pay for his beer because of his bad credit and had to leave without his favourite brew. This man obviously has financial problems and has to solve them. How he wished he was able to get at that moment one or more loans Toronto no credit check so that he could enjoy his beer last weekend!

Revelation #2 – This man obviously was not alone needing loans Toronto no credit check

On the weekend I was looking at some analytics to see which of our blogs have been accessed the most over the last 30 days. To my shock (yes, notwithstanding our Firm has been helping people who have trouble living paycheque to paycheque and corporations in need of restructuring and turnarounds, I can still be shocked) the 4 most read blogs in the last month were::

There are obviously a lot of people concerned about their debt levels and looking for information on bad credit loans, payday loans, loans Toronto no credit check and how to tackle student loan debt. These blogs were not only the most viewed in the last 30 days, but our blogs on the topic of payday loans and bad credit loans are the most read. Obviously, there is a large demand in the Greater Toronto area for loans Toronto no credit check.

Revelation #3 – Our top searches are from people looking for loans Toronto no credit check

Yesterday I look at our analytics to see what were the top search terms that brought people to our blog and Firm website in the last 30 days. There were 221 visits to our website using the following search terms:

You don’t need me to tell you what this means. There are a lot of people with bad credit who are feeling pain in our society and believe that more loans Toronto no credit check is their solution. The amazing thing though is that rather than looking for bankruptcy alternatives such as consumer proposals, or if required, bankruptcy itself, these people are looking to borrow more money (apparently $5000 is a popular number) from high cost lenders.

These people are misguided in that they think that further high cost loans Toronto no credit check will solve their problem. I understand the way these people think. It is hard for us to face our challenges. Whether it is about our health, our family or our financial situation, it is difficult and painful to look at our problems straight in the face, especially if we are the one who created the problem. These people mistakenly think that taking on more debt is the solution.

Well, it is not. These people need to recognize that their credit score is so poor because of choices they have made in the past, and their behaviour has to change. Taking on more debt through loans Toronto no credit check is just more of the “same old same old”. They need to look at ways to budget so that their expenses are less than their income. They need to start saving to pay down debt. If they can’t do it on their own, then they must consult a licensed professional trustee who can discuss options with them: budgeting, bankruptcy alternatives such as debt consolidation or a consumer proposal or perhaps even bankruptcy.

There also needs to be a discussion regarding life after implementing the solution and working on improving their credit score. If any of this sounds like a situation you are in, taking on more debt through payday loans or loans Toronto no credit check is not your answer.

You need to contact Ira Smith Trustee & Receiver Inc. right away for a no charge consultation. You can even check out our bankruptcy faqs now online here. We will go over all of your options, and encourage and help you to implement the one that is right for you so that together we can solve your problems with immediate action and the right plan so that Starting Over, Starting Now will become your reality.

Brandon Blog Post

FINANCIAL ADVICE THAT YOU SHOULD NEVER FOLLOW

Post author By Brandon Smith
Post date November 26, 2013

People mean well and many can’t resist giving advice, but when it comes to financial matters ONLY take financial advice from a qualified professional. Here are some classic examples of financial advice that you should never follow.

Don’t declare bankruptcy because it will ruin your credit rating. While it’s true that bankruptcy remains on your credit report for quite a while, if you aren’t paying your credit cards and other loans on time, your credit rating is probably already shot. With an insolvency process, we can provide you with easy ways to start rebuilding your credit fast. Without such a process, you will never get out from under your debt and won’t be able to rebuild your credit rating.
Credit cards will get you into trouble. Credit cards won’t get you into trouble if you charge only what you can afford to pay off. In fact, credit cards can help you to establish a credit history which future lenders will use when you want to take out a loan or a mortgage. Without a credit history you may find it very difficult to borrow money.
A house is always a great investment. Houses are not immune from market fluctuations. The prices of real estate are tied to changing demographics, interest rate spikes and the economy. There is no guarantee that your house will have increased in value at the point in time when you need to sell. Depending on the state of the real estate market when you purchase a home, there is always a possibility that your home may not increase in value and may even decrease in value from time to time, so don’t purchase the house because you need the increased value to be liquid on a specific date.
You can live for free if you buy an investment property and rent it out. Television shows on the Home & Garden channel have gone to perpetuate this bad advice. It’s not as easy as it seems on a one hour TV show and it’s a difficult and potentially financially hazardous route to take. Renovations almost always go over budget, so count on spending more than you planned on. Not every tenant is a jewel. Some are extremely difficult and can cost you a lot of time and money. Once you become a landlord you will have to manage your property. You just don’t find a tenant and expect that the property will manage itself. Expect to be called whenever something is not perfect and your tenant will expect immediate action. Be prepared for unexpected expenses.
Asking all your friends where can I get a loan with bad credit in Toronto. The lenders that would lend money to someone with debt problems and bad credit already charge extremely high upfront fees, very high interest rates and usually, you will never be able to pay off the loan and perhaps you will even fall behind on interest payments. The collection efforts of these types of lenders are not subtle or pleasant.
Student debt is good debt. Debt is debt, and borrowing more than you can repay is never a good idea. The Canadian Federation of Students estimates that average student debt is almost $28,000. According to the Canada Student Loan Program, most students take 10 years to pay off their loans. Does this sound like a good idea? We are certainly not advocating that students don’t pursue post secondary education, but keep the debt to a minimum by going to a more affordable college or university. Work part time during the school terms and full time during vacations.

When you need financial advice seek out a professional. Taking bad advice can be costly. If you are experiencing serious debt issues contact a trustee for advice. Ira Smith Trustee & Receiver Inc. is a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We will give you sound financial advice that you can count on.

Brandon Blog Post

ADVICE FOR SENIORS WITH CREDIT CARD DEBT-SENIORS IN DEBT, PART 4

Post author By Brandon Smith
Post date September 18, 2013

Last week we discussed whether or not seniors should try and pay off their debt or declare bankruptcy. This week we’ve got some great advice for seniors in debt, seniors with credit card debt, seniors looking for Starting Over, Starting Now.

Seniors in debt is a serious problem that continues to get worse:

According to Statistics Canada, one in three retirees over 55 and two in three over 55 who aren’t yet retired are in debt.
A recent TD Bank study has shown that older Canadians have increased their debt load by 15% (an average of $6000/person) from the previous year. Seniors living in Alberta, Ontario and Quebec had the highest rates of debt accumulation in 2012.
According to Boomers and Retirement, a new survey by TD Ameritrade, the average Baby Boomer is about a half-million dollars short on retirement savings.

The most important piece of advice we can give seniors trying to start over is to eliminate debt! Carrying debt into retirement is a recipe for disaster. Once you retire and begin living on a fixed income you will no longer have the funds required to service the debt; this is especially true for seniors with credit card debt at high rates of interest. Here are 5 tips for seniors in debt:

Postpone retirement if at all possible and pay down as much debt as you can. If working fulltime is not an option, consider part-time work.
Pay down credit card balances as quickly as possible. They are generally the highest-interest loans that seniors carry. You can also call the credit card company and ask for a lower interest rate. They will sometimes agree.
Limit the number of credit cards that you have.
Stay away from debt settlement companies! Consumers are continuing to be taken in by false claims offering to settle your debts for pennies on the dollar quickly and easily. The reality is that when something seems too good to be true, it usually is. Debt settlement companies exist for only one reason – to take your money! They will not help you solve your debt problems. There is no instant or quick fix for serious debt issues.
Protect yourself against fraud and/or abuse. Run away from get rich schemes. There are many scammers out there who have duped seniors out of their life savings and continue to seek out new targets.

As we discussed in Seniors in Debt, Part 3, the right debt relief option you ultimately decide upon will depend on whether or not you have assets, who you owe money to, and how much you owe. For seniors trying to start over there are bankruptcy alternatives – credit counselling, debt consolidation, consumer proposals – which in many cases are better options than declaring personal bankruptcy.

If you’re planning to retire soon or you have already retired and find yourself dealing with serious debt, consult a professional Trustee. Contact Ira Smith Trustee & Receiver Inc. We are a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We can help.

Tags Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, consumer proposals, credit counselling, Debt, debt consolidation, insolvency, personal bankruptcy, restructuring, seniors in debt, seniors trying to start over, seniors with credit card debt, starting over starting now, toronto, toronto bankruptcy, trustee, vaughan bankruptcy

Brandon Blog Post

FINANCIAL VIABILITY ASSESSMENTS – CORPORATE RESTRUCTURING PART 2

Post author By Brandon Smith
Post date May 15, 2013

Last week we discussed the process of corporate restructuring. This week we’ll be addressing the stakeholders and key players and roles in a corporate restructuring, as well as the issue of financial viability assessments.

Serious financial difficulties cause a great deal of distress; the very viability of your company is in question. You need professional help and you need it now. The cause of the financial difficulties must be identified, financial and viability assessments must be done, and an organization and restructuring plan must be implemented. There are stakeholders and key players that are involved, but who are they and what role do they play?

Who are the stakeholders: Depending on the size and structure of your company stakeholders may include corporate management, financial institutions, suppliers, shareholders, governments, regulatory bodies and employees.

Who are the key players and what are their roles: The key players in a corporate restructuring are the:

Company’s Accountant: The role of the accountant may include payroll, cash collections, disbursements, procurement and property accounting, tax preparation, financial planning, business consulting and payroll services.

Company’s Lawyer: The role of the lawyer may include drafting contracts, taxes, facilitating mergers, and handling human resources issues.

Trustee: The trustee is a restructuring professional. We work with all of the stakeholders and key players, creating realistic strategies and solutions for your company. The problems that caused and contributed to the financial distress must be identified and addressed after which a plan must be put into place to restructure the company and affect the turnaround. We perform a financial viability assessment in order to begin the planning process of a corporate restructuring.

Contact Ira Smith Trustee & Receiver Inc. With our expertise and skills in restructuring and turnaround management we will work with you to find and implement the right financial and business strategies that address your particular issues. We will assist you to avoid your company bankruptcy. Starting Over, Starting Now we can begin to rehabilitate your financially troubled company. Watch for our next blog – Corporate Restructuring Part 3 – when we’ll be addressing the Division 1 Proposal.

Tags Bankruptcy, bankruptcy alternatives, Company bankruptcy, consumer proposals, corporate restructuring, division 1 proposal, financial viability assessments, proposal, restructuring, toronto, toronto bankruptcy, trustee, turnaround management, Vaughan

Brandon Blog Post

CORPORATE RESTRUCTURING PART 1

Post author By Brandon Smith
Post date May 7, 2013

Many companies are experiencing financial difficulties as a result of the current climate of economic uncertainty, fast-moving markets, increased competition and outdated business models. As Trustees & Receivers we are often involved in corporate restructuring, a process which many clients find confusing.

We know there is confusion about the meaning of the terminology, the roles played by the various stakeholders and professionals, and the difference between a restructuring business plan and the Proposal. I’ll attempt to demystify it for you.

What is corporate restructuring

Corporate restructuring is a strategy to move from financial harm and return to a financially viable state.

When to consider restructuring

When a company is having trouble making payments on its debt and this situation is one that may lead to the company’s collapse, corporate restructuring should be considered.

Corporate restructuring increases a business’ efficiency – reducing costs, increasing profits – and therefore avoiding closure.

When is a company eligible for restructuring

There is a general principle we use in determining if a business is a good candidate for financial restructuring. It is that they must have a core business that is viable. First they must shed themselves of their debt which is weighing them down. They must also develop a business plan and model that will be profitable. Then they will be able to continue to run.

When should you contact a trustee?

If your company is experiencing serious financial difficulties, the sooner you contact a trustee, the better.

Contact Ira Smith Trustee & Receiver Inc. We will evaluate your situation and create an effective restructuring plan that will help your company to become financially sound, Starting Over, Starting Now. We will help you avoid a company bankruptcy.

Watch for our next blog – Corporate Restructuring Part 2 – when we’ll be addressing the key players, stakeholders and roles in a corporate restructuring.

Tags Bankruptcy, Company bankruptcy, corporate restructuring, financial restructuring, proposal, restructuring, Richmond Hill, richmond hill bankruptcy, toronto, toronto bankruptcy, trustee, trustees, Vaughan, vaughan bankruptcy, Woodbridge, woodbridge bankruptcy