Tag: unsecured creditors

STATUTE OF LIMITATIONS IN ONTARIO: THE UNCERTAINTY BEHIND ONTARIO’S LIMITATION PERIOD IN BANKRUPTCY NOW ABSOLUTELY SETTLED

Post author By Brandon Smith
Post date June 7, 2021

statute of limitations in ontario

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

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

If you would prefer to listen to the audio version, please scroll to the very bottom and click play on the podcast.

Statute of limitations in Ontario: The uncertainty behind Ontario’s limitation period for debt collection

Many individuals have a problem determining the statute of limitations in Ontario for financial debt collection under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. This confusion is all-natural because the time duration is computed based upon the moment when a creditor knew, or ought to have actually recognized that it had a claim to get legal advice on and initiate legal action for recovery.

The unpredictability emerges because the point you need to begin determining from is not necessarily a certain date you can indicate on the calendar. Rather, it may need to be presumed from the realities in any specific situation.

Why does the limitation period matter? It matters because if a creditor does not initiate legal action within the allowed period of time in Ontario within 2 years of knowing, or having out to have known, that it had a claim to litigate, the claim is then statute-barred. What this means is that the claim can no longer be pursued as a valid debt.

In this Brandon Blog, I describe what seems to be the final word now on the statute of limitations in Ontario and proving your claim in bankruptcy.

Statute of limitations in Ontario: Time limits, collections and bankruptcy

If you think it was confusing for only the average Ontario citizen, think again. It was also confusing for lawyers and licensed insolvency trustees. In my March 15, 2021, Brandon Blog titled “STATUTE OF LIMITATIONS: IS STATUTE BARRED DEBT A BASIC PROPER BANKRUPTCY CLAIM IN ONTARIO?“, I described the decision of Master Mills (as she then was) who has since been elevated to the position of a Judge.

Her decision released on March 8, 2021, in. the legal proceeding of In re: John Trevor Eyton, 2021 ONSC 1719 (CanLII), has changed the way we look at creditors who file a proof of claim in either a consumer proposal, restructuring proposal or a bankruptcy. Just to refresh your memory, she decided that if a claim was past the two-year limit under the statute of limitations in Ontario, then the creditor could not even file a proof of claim in bankruptcy on that debt.

In that blog, I also described what the statute means for debt collectors. I also said that the Eyton decision was going to be appealed. Well, it was and we now have the ruling from a Judge of the Ontario Superior Court of Justice (In Bankruptcy and Insolvency).

Statute of limitations in Ontario and bankruptcy

The appeal raises a rarely-considered and narrow issue: is a claim which is statute-barred under the statute of limitations in Ontario able to be included by a creditor in filing a Form 31 proof of claim in the bankruptcy of the debtor?

On May 19, 2021, Justice S.F. Dunphy released his decision regarding the appeal of the Eyton decision. I won’t repeat the original decision here because I discussed it in detail in my above-noted blog.

Suffice to say that the basis of this litigation is that the Trustee disallowed the creditor’s filed proof of claim because the last payment made on the debt was in April 2016. The creditor did not take legal action against the debtor.

This made the claim now more than two years old before the date of bankruptcy. Therefore the Trustee said since the claim is statute-barred, it cannot be a debt to be proved in this bankruptcy.

Statute of limitations inForm 79 Ontario: When it is too late to sue?

As previously mentioned, the creditor appealed the Trustee’s decision to Master Mills and lost. Now the creditor was appealing the Master’s decision to the Judge.

The issue to be decided was when:

it is far too late to take legal action to try to collect on the debt;
the debtor has actually submitted either for a restructuring proposal or for bankruptcy under the Bankruptcy and Insolvency Act (Canada) (BIA);
the debtor has actually included the amount of that creditor’s claim in the sworn Statement of Affairs; and
under the statute of limitations in Ontario, the financial debt is statute-barred yet is not extinguished,

can the creditor file a claim for that financial obligation in the insolvency proceeding?

***Statute of limitations in Ontario* and the Effect of *Form 79 Statement of Affairs***

The creditor’s first point in the appeal was that its debt was listed in the debtor’s sworn Statement of Affairs. Since the debtor recognized the debt, and the debt is not extinguished, then a proof of claim for the amount should be admitted by the Trustee.

The Judge did not think much of this argument. He stated that just because an amount is listed as a liability on the Statement of Affairs, each creditor is still required to prove their claim. The distinction is that a debtor may think that the debt is a provable claim, but a creditor still has to prove their claim. Stated another way, every claim is a potential claim until proven in accordance with the BIA.

In most restructuring proposals or bankruptcy administrations, the debtor’s listing of claims for at least the unsecured debt will never exactly match the final list of proven claims. That is just the way it is.

**Can statutes of limitation barred claims be proved in bankruptcy?**

As the BIA is federal law, then all provincial limitations laws in Canada are in play. Not just the two-year limitation period in the statute of limitations in Ontario. The creditor’s legal counsel advanced the following arguments regarding civil claims in bankruptcy:

The BIA does not define provable claims with any reference or qualification relating to any provincial applicable limitation periods.
The Supreme Court of Canada in Schreyer v. Schreyer, 2011 SCC 35 (CanLII), [2011] 2 SCR 605 decided that the meaning of the term provable claims in the BIA is that if the debt exists and can be liquidated and if the underlying obligation exists as of the date of bankruptcy and if no provincial exemption rule applies, the claim will be deemed to be provable.
The two-year limitation period in the statute of limitations in Ontario is procedural in nature because it does not extinguish the debt, it just says that a proceeding, such as the issuance of a statement of claim, cannot begin.
In one of the Ontario cases I mentioned in my earlier blog (Re: Temple), the Judge, in that case, found that a claim that was older than the basic limitation period in Ontario could be used as a debt owing for the purpose of launching a Bankruptcy Application seeking a Bankruptcy Order being made against a debtor.

The Judge was not persuaded by any of these arguments. He shot them down one by one. I can summarize all of his comments as follows. The purpose of the BIA is to have an equitable distribution of the bankrupt’s assets amongst the creditors, in the priority laid out in the BIA. The claims of all unsecured creditors are to be treated equally and each unsecured creditor is to receive their pro-rata share.

If a creditor who cannot enforce its claim in respect of payment can receive the same share as a creditor who still can enforce its claim for payment, then the claims of all unsecured creditors are not being treated equally.

So Judge Dunphy of the Ontario Superior Court of Justice (In Bankruptcy and Insolvency) dismissed the appeal. I have been told by the lawyer for the creditor who appealed the Master’s decision to the Judge that he does not feel he has a chance to win an appeal to the Court of Appeal for Ontario. So the law on claims barred by the statute of limitations in Ontario in an insolvency proceeding is now settled. Such a claim is not a claim provable and probably cannot even be used as the basis of a claim in a Bankruptcy Application.

What does this mean for proceedings and intended proceedings in Ontario?

As far as what this means for debt collectors trying to collect a claim in respect of any statute barred debt and for a debt collection agency, whether they are trying to collect on personal debts such as a credit card debt or on commercial debts, look at my previous blog where I discuss what it means for a debt collection agency.

As far as what it means for an insolvency process, there are several takeaways for me on this. First, whenever a creditor files a completed Form 31 proof of claim, there needs to be a schedule attached to the form that clearly shows how the debt is calculated. If there is not going to be any distribution to the unsecured creditors then there is no need to vet every claim to the nth degree.

However, where there will be a distribution to the unsecured creditors, then the Trustee is going to have to take great care in reviewing and vetting each claim. The Trustee will have to make a determination in each case if the claim is barred by the statute of limitations in Ontario or not. If there is insufficient detail in the schedule attached to the Form 31 proof of claim, the Trustee will have to go to each such creditor and get more details. I suspect there will be a whole lot more claims being disallowed than in the past.

Of course, each creditor whose claim has been disallowed by the Trustee because it is barred by the statute of limitations in Ontario has the right to appeal the Trustee’s decision to the Master sitting in the Ontario Superior Court of Justice in Bankruptcy and Insolvency).

***Statute of limitations in Ontario:* *Get a personalized debt free plan today***

I hope that you found this statute of limitations in Ontario Brandon Blog interesting. If you are concerned because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve. Our professional advice will create for you a personalized debt-free plan for you or your company during our no-cost initial consultation.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need to become debt free, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

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

Brandon Blog Post

DEBT MANAGEMENT IN ONTARIO PLAN: HOW TO GET A METICULOUS ONE TO WORK FOR YOU IMMEDIATELY

Post author By Brandon Smith
Post date May 31, 2021

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

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

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

What is debt management in Ontario?

The term “debt management in Ontario” can mean a lot of things to Ontario residents. There are debt management companies that offer a range of services, from credit counselling to debt settlement. In Ontario, these organizations offer their debt management services exclusively to individuals and not to businesses. Debt management is a process that helps you manage your debt and get it under control. A debt management program can only be successful if the person also learns new behaviours in how they deal with money and debt.

WARNING: The Canadian government has put out a consumer alert. This alert, titled Consumer Alert: What you need to know when getting help to pay off debt or repair your credit, warns Canadians about unscrupulous debt settlement companies and what you need to know. In many Brandon Blogs, I have also put out that same warning. There are only two choices when seeking the right credit counsellor to review your alternatives to deal with out-of-control unsecured debt, including tax debt. Legitimate debt management services in Ontario are provided via two types of specialists: accredited community-based non-profit credit counselling agencies and federal government accredited and supervised licensed insolvency trustees.

I recognize that debt is a huge issue for many people in Ontario and all of Canada. Most individuals do not also understand the massive influence it can have on them but trust me, it is all too genuine. In this Brandon Blog post, I review the different alternatives readily available to people looking for debt management in Ontario.

**What is debt management in Ontario plan?**

A debt settlement plan (debt management plan or DMP) is a tool supplied by a non-profit credit counselling agency that can help you get control of your money and back on course to living the debt-free life you wish to lead. Your dedicated credit counsellor can help you identify if becoming part of a DMP is appropriate for you. If not, the non-profit credit counsellor can lay out all your available alternatives.

For hard-working people who struggle to meet their monthly bills, a debt management plan might be the answer. Under the terms of a DMP, a person consolidates all of their unsecured debt under one plan. This plan, developed by any one of the many qualified counsellors, usually involves making a single regular payment, a monthly payment, under a debt repayment program, to the credit counselling service. The non-profit accredited credit counselling agency then distributes this money to creditors.

This kind of repayment plan can take normally as long as 5 years to pay off 100% of your unsecured type of debt, but it can also be the solution that allows a person to become debt-free quickly. It’s important to note that such an informal debt management in Ontario plan may not be the best option for everyone.

There is one major thing to consider before you sign up for a DMP. Before you take out a DMP, you want to make sure that you are in a position that allows you to pay off your debt without the assistance of your creditors.

In a DMP, you are promising to pay your creditors 100% of the principal you owe them when entering into the debt management plan, with no reduction from the total owing. So you need to have established a realistic budget working with your credit counsellor, for the entire DMP period showing you will be able to afford to maintain the monthly payment you are promising to make.

Will creditors continue to contact me while I’m on a Debt Management Plan?

Most people view the DMP as merely a temporary solution until you have paid off all debts. But in fact, if done properly and taken seriously, it is a legitimate solution and behavioural modification program. If you learn the budgeting skills and accept the financial advice in the program and follow them as a permanent change to your money management behaviour, it will allow you not only to focus on paying down your debt load while you are in the program but teach you the necessary skills to not get into financial crisis in the future. You will have the money to make each regular payment to pay off your normal bills and live a financially healthy life.

Once you’ve signed up for a DMP, your credit counsellor will communicate with your unsecured creditors to advise that you are under their program and that payments to creditors will be coming from the non-profit credit counselling agency. Your unsecured creditors will note that in their respective files and focus their communications to be with the debt management program credit counselling agency.

Does debt management in Ontario hurt your credit?

Most people entering a program for debt management in Ontario are on the financial edge of the ledge already. If they default on their debts, it will produce a lower credit score. While a DMP will lower your credit score at first, in the long run, if you keep up with the program and stick to your payment schedule and make your debt payment plan payments on time as agreed, your credit score will eventually improve.

Do I have to give up my credit cards in debt management in Ontario Program?

The question of whether you need to give up your credit cards in a DMP is among the most common inquiries we get asked by debtors. The answer is although there is no law that says you must surrender your bank card for financial debt management in Ontario plan, you do need to quit borrowing. This includes using your existing credit cards.

However, you can still utilize a secured credit card up to the limit you set with your financial institution that issued it. More likely though, the credit card firm will certainly remove your account once they obtain notification of your DMP.

When you’ve effectively finished your financial debt management in Ontario program, you will become eligible for a normal credit card once more.

What to do during your debt management plan

The Canadian government recommends that you:

ask the credit counselling agency for timely written reports on the status of your plan,
keep good records of all amounts you pay to the agency, and
get receipts of all money you pay to them as well as regular reports of amounts they pay to your unsecured creditors for you.

Carefully review your records and the regular reporting you receive from the agency. Ensure they are paying your creditors on time. This will keep you clear of any type of late fees or further adverse notations on your credit report.

What are the disadvantages of debt management in Ontario plan?

There are a few possible drawbacks to hopping on a DMP. However, in my view, they are not enough to stop you from doing one if you can afford it. The disadvantages are also common to any debt settlement in Ontario plan.

In no particular order, they are:

It won’t cover every one of your outstanding debts. DMPs typically won’t include your secured debts and some unsecured debts, such as student loans. This is especially true if you are still in university or college, have not finished your course of study and need to continue to apply for student loans because you wish to continue either as a full-time or part-time student.
Credit counsellors can guide you but will have to take your secured debt payments into account when establishing your monthly budget. You’ll typically need to manage those debts on your own. If you do not have any money left over each month after accounting for secured debt payments, rent or mortgage, food, income tax and other essential monthly purchases, then a DMP will not be possible for you.
There could some service charges to pay for the DMP.
As indicated above, no real accessibility to credit.

During the initial counselling session, the credit counsellor can help you review your realistic options. Perhaps you can still qualify for an Ontario debt consolidation loan. Keep in mind that if that is an option, you will need to be mindful of the effective interest rate you will be paying on your loan, albeit at an annual rate much less than on your existing debt.

If neither a DMP nor a debt consolidation program are viable debt consolidation options or debt settlement options for you, then you will need to explore with a licensed insolvency trustee the other debt relief options of either a consumer proposal or bankruptcy to eliminate your unsecured debt.

How long can you legally be chased for debt in Ontario?

The answer is two years. A Judge of the Ontario Superior Court of Justice In Bankruptcy and Insolvency recently released a decision. It was an appeal from the decision of a Master sitting in the same court. The case was about the issue of a claim which is statute-barred under the Ontario Limitations Act.

Section 4 of this Act says that you cannot enforce an outstanding debt for a claim the creditor has after 2 years from when the claim was discovered. This includes the day on which a creditor initially should have recognized they had a claim which called for enforcement.

This case was about a creditor filing a proof of claim in a debtor’s personal bankruptcy. The licensed insolvency trustee disallowed the claim because the claim was statute-barred. The creditor appealed the Trustee’s decision to the Master sitting in bankruptcy court. The creditor argued that although legal action cannot be taken on the debt, it does not mean that the debt still does not exist. The Master dismissed the creditor’s appeal and upheld the Trustee’s decision.

The creditor then appealed the Master’s decision to a Judge sitting in the same court. The Judge reviewed the matter and upheld the Master’s decision.

What this decision says is that not only can a debtor not be chased for a debt if no legal action was commenced within the 2 year period, they can’t even file a proof of claim in the debtor’s consumer proposal or bankruptcy!

However, keep in mind that just because it is no longer a legal debt, the creditor would have made a notation with the credit bureau for your credit report before the two-year period ended. So the damage to your credit score has already taken place.

Can a Trustee do a debt management plan?

The answer is a Licensed Insolvency Trustee can do for you the equivalent of a DMP. Consumer proposals can only be administered by a Trustee. Consumer proposals are also the only federal government-approved debt settlement plan in Canada. To be equal to the result of a DMP, you would offer to your unsecured creditors to pay them 100% of all the unsecured debt that you owe. Remember, above I stated that a DMP pays 100% of your unsecured debt.

There are many similarities between a consumer proposal and a DMP if you offer 100%. But as I indicate below, you can still have a successful consumer proposal by offering less than 100% to settle all of your unsecured debts. For details on how a consumer proposal works, check out my Brandon Blog, CONSUMER PROPOSAL FAQ: ANSWERS TO 10 TANTALIZING CONSUMER PROPOSAL QUESTIONS.

Which is better? A debt management plan In Ontario vs consumer proposal

Everyone’s financial situation is unique. A DMP will not be as harmful to your credit score as with a consumer proposal, nor will it jeopardize any of your assets as with bankruptcy. You’ll also gain money management skills that can help you in the long term and avoid debt in the future. But if you cannot get an Ontario debt consolidation service loan or a debt management plan is not appropriate for you, then there is another formal option that avoids bankruptcy.

In a consumer proposal, you will also gain money management skills. In addition to your no-cost initial consultation, there are also 2 mandatory credit counselling sessions with an accredited credit counsellor in the Trustee’s office. In a DMP, you need to pay 100% of your unsecured debt. In a consumer proposal, the amount you need to pay is calculated against what your unsecured creditors can expect to receive from your bankruptcy. In most cases, it will be much less than 100%. On average, you can expect to only repay about 25% of your total outstanding unsecured debt, including any tax debt.

A consumer proposal is for any person that owes $250,000 or less, other than for any loans secured against your principal residence. If you owe more than this limit, or your company owes too much debt, then you can still get debt relief under a different proposal section of the Bankruptcy and Insolvency Act (Canada) (BIA).

Bankruptcy is of course the very last option anyone should consider. This should be considered only if you do not have the necessary cash flow to successfully complete any debt management plan.

So what is best for you? Give me a phone call and I will let you know whether debt management in Ontario plan or a proposal under the BIA is better for you. I will tell you at no cost to you.

Debt management in Ontario summary

I hope that you found this debt management in Ontario Brandon Blog informative. Many people feel that they are trapped in a cycle of credit card debts, unsecured lines of credit, tax debt and generally an unmanageable level of debt. You may want to do something about those debts but you aren’t sure what to do.

If you have any debts they can be overwhelming because they are so much money and you don’t know how to deal with them. There are various debt management plans available that can help you reduce the amount of money you owe and help you deal with your debts.

If you are concerned because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, Contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

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

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Brandon Blog Post

INSOLVENCY AND BANKRUPTCY ACT: ANTI-DEPRIVATION RULE COMPLETELY VALID IN INSOLVENCY

Post author By Brandon Smith
Post date October 12, 2020

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

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

Insolvency and bankruptcy act introduction

On October 2, 2020, the Supreme Court of Canada (SCC) rendered its decision in Chandos Construction Ltd. v. Deloitte Restructuring Inc., 2020 SCC 25 (Chandos decision). This decision upheld the idea that the anti-deprivation rule is completely valid when it pertains to both personal and business insolvency and bankruptcy act cases.

In this Brandon’s Blog, I describe the Chandos case and what it stands for.

**The definition of the word deprive and the insolvency and bankruptcy act context**

The Merriam-Webster dictionary states the definition of the word deprive is:

1: to take something away from; and
: to withhold something from.

In the Chandos Construction Ltd. (Chandos) insolvency and bankruptcy act case, the SCC was asked to rule on contract clauses that if upheld, would deprive the bankruptcy estate and therefore the unsecured creditors of money that would otherwise be available. This deprivation of funds, which may make total sense as between contracting parties, is not enforceable in bankruptcy.

**The anti-deprivation rule in the Canadian insolvency and bankruptcy act matters**

Neither the Bankruptcy and Insolvency Act (Canada) (BIA) nor the Companies’ Creditors Arrangement Act (CCAA) stops non-defaulting parties to a contract, from relying upon agreement provisions that create an inevitable result when a debtor declares bankruptcy. The common law becomes pertinent in these situations.

Canadian courts still refer to these anti-deprivation provisions as “ipso facto” provisions and also this idea as the fraud upon the bankruptcy law concept. In more current times, this has been described as the anti-deprivation rule.

The SCC has recognized the anti-deprivation rule since the 1890s. However, the contemporary application of this principle in Canadian law greatly originates from an Ontario court decision in 1995 – Canadian Imperial Bank of Commerce v. Bramalea Inc., 1995 CanLII 7262 (ON SC) (Bramalea decision).

This is a decision from the Ontario Court of Justice (General Division). Canadian courts have thought about and decided upon the anti-deprivation rule in many insolvency and bankruptcy act cases since then.

**The Bramalea case and its relevance of insolvency and bankruptcy act matters**

Luckily for me, Ira Smith was the receiver responsible for the file that involved the Bramalea decision. So, I have a bird’s-eye view of that case which started it all leading to the SCC Chandos decision.

In the Bramalea insolvency and bankruptcy act case, a group of companies, including Bramalea Inc. (Bramalea) was in a partnership agreement to develop and operate a shopping mall in Markham, Ontario called Shoppes on Steeles. In 1995, Bramalea was placed into receivership and bankruptcy. Bramalea’s partners included Sears Canada and a private real estate development company.

Amongst the different provisions of the partnership agreement was a specific provision in the contract which considers insolvency. It said that, in case of the insolvency of any of the partners, the non-insolvent partner(s) (given it does not waive the event of insolvency) can buy the interest of the financially troubled partner at the lesser of book value or fair market value.

The paradox of this case was that the large company partners at the time of the drafting of the partnership contract were concerned about what happens if the private property developer one day became insolvent? None of the partners ever believed that it would be that private company that would be the only one that was not insolvent. We all know what happened to Sears Canada!

The moving parties sought to exercise that right by serving a notification to buy the Bramalea passion at book value, approximated to be around $200,000. This was opposed by the receiver and also other stakeholders.

The receiver gave evidence that the fair market price surpassed book value by as much as $2 million to $3 million. The moving parties acknowledged that the fair market value of Bramalea’s stake in the partnership was more than book value. They did not agree with the receiver’s evidence regarding the amount of that difference. They additionally did not submit their own fair market valuation.

**The Bramalea insolvency and bankruptcy act decision**

Based on the evidence, the court took the view that the specific spread between book value and fair market value was not trivial. The court was satisfied that the distinction is greater than marginal, and enough to properly draw the interest of the receiver and the creditors.

The receiver’s position was that there is a higher principle in play and that the concern is not one of hindering the freedom of contract. Rather it was just one of whether or not that part of the partnership contract is void as being contrary to the public interest.

The receiver submitted that while the arrangement might quite possibly stand as between the contracting parties, it is void as against the receiver and also the bankruptcy trustee in the Bramalea insolvency and bankruptcy act proceedings.

The court agreed with the receiver’s position in this insolvency and bankruptcy act case. The court decided that it was clear from the provisions of the partnership agreement itself that the parties contemplated a transfer to one of the partners of the other partner’s partnership interest, only in case of insolvency, at a price less than what could be acquired for that interest on the open market.

The court specified that this stipulation made perfect sense, as between the contracting parties. It made total sense in regards to maintaining their partnership and their respective interests. Nevertheless, the court likewise specified that the clause cannot survive through the scrutiny of the “fraud on the bankruptcy law” principle.

The receiver ended up selling Bramalea’s partnership interest to the other partners for fair market value.

insolvency and bankruptcy act

**The Chandos Alberta court case and the anti-deprivation rule for insolvency and bankruptcy act matters**

Chandos was the general contractor for a condo project contracted with Capital Steel to give $1.3 million worth of steelwork. In the subcontract, Capital Steel agreed that if it became insolvent, Chandos was entitled to all costs arising from the suspension of the contract and it would forfeit 10% of the total subcontract price as an inconvenience fee. Capital Steel performed the majority of its commitments, nevertheless, it filed an assignment in bankruptcy before completing full performance.

As a result, Chandos was forced to finish the contract at an estimated expense of $22,800. Up until that point, Chandos owed Capital Steel $149,618 in outstanding invoices for the job it had performed.

Chandos relied upon the agreement and said that it was qualified to deduct its cost of finishing the job plus 10% of the total contract cost from the amount owing. Given the price of the subcontract, the 10% deduction eliminated Chandos’ balance owing plus an extra amount of $10,511. Chandos declared that gave them a provable claim in the Capital Steel insolvency and bankruptcy act case.

The Trustee’s application to the Alberta Court of Queen’s Bench

On March 6, 2017, the Trustee applied to the Alberta Court of Queen’s Bench seeking advice and directions on whether Chandos was entitled to rely on the provision in the contract or was it void pursuant to the anti-deprivation rule in common-law.

The chambers judge acknowledged that the common law anti-deprivation rule stops parties from contracting out of insolvency and bankruptcy act regulations. The judge stated that if that provision was a liquidating damages provision as opposed to a penalty, it would not violate the rule.

The chambers judge ruled that the condition was an authentic pre-estimate of costs, which imposed liquidated damages and not a penalty. He additionally held that the provision represented a bona fide commercial arrangement that did not have as its predominant objective the deprivation of Capital Steel’s property. Consequently, the chambers judge decided that Chandos can implement the clause against the Trustee.

**Trustee appeals the Chandos insolvency and bankruptcy act decision to the Court of Appeal for Alberta**

The Trustee appealed the Chandos decision to the Court of Appeal for Alberta. The appellate court reviewed the lower court decision in this insolvency and bankruptcy act case and decided that:

The chambers court properly determined the presence and application of the fraud on the bankruptcy law principle in Canada.
In describing the scope of the anti-deprivation rule, however, the chambers judge erred.
The lower court embraced the purpose-based technique set out by the Supreme Court of the United Kingdom
The appropriate technique is to check out the impact of the provision. Its purpose is a different analysis.
Chandos certainly had a genuine commercial interest it was looking to protect.
However, the clause conflicts with the BIA‘s scheme of distribution. The common law anti-deprivation rule revokes the clause and Chandos cannot count on it to defend its claim against the Trustee.

**Chandos appeals to the SCC in this insolvency and bankruptcy act anti-deprivation rule case**

One of the key goals of the insolvency and bankruptcy act law is to make certain there is a fair distribution among creditors. In order to fulfill the objective, the legislation restricts specific contractual stipulations that trigger when one of the parties goes into insolvency proceedings (ipso facto clauses).

As seen in the Bramalea situation, one of these limitations is the anti-deprivation rule. It holds that ipso facto conditions that rob the debtor’s creditors of assets they are qualified to receive in insolvency and bankruptcy act matters are void. This is likewise what the Court of Appeal for Alberta decided. Chandos appealed that decision to the SCC.

The Chandos appeal was heard on January 20, 2020. The SCC split decision was released on October 2, 2020. On the facts of Chandos, the SCC dismissed the Chandos appeal. The SCC refused to promote a contractual stipulation that the subcontractor Capital Steel waive 10 percent of the agreed price if Capital Steel became insolvent or bankrupt.

The SCC majority maintained that the test for application of the contractual provision is effects-based and not purpose-based. The SCC majority confirmed that the anti-deprivation rule stands under Canadian common law and it has not been eliminated in dismissing the appeal in this corporate insolvency and bankruptcy act case.

insolvency and bankruptcy act

Insolvency and bankruptcy act summary

I hope you have enjoyed this insolvency and bankruptcy act Brandon’s Blog. Hopefully, you have better insight now into the fact that a sick insolvent company’s business can be saved by doing a sale of its assets to a healthy organization.

Do you or your company have too much debt? Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt.

You are worried because you are facing significant financial challenges. It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags anti-deprivation rule, Bankruptcy, bankruptcy estate, bankruptcy trustee, bramalea, Canadian Imperial Bank of Commerce v. Bramalea Inc., capital steel, chandos construction, Chandos Construction Ltd. v. Deloitte Restructuring Inc., fraud on the bankruptcy law, insolvency, insolvency and bankruptcy act, ipso-facto, ira smith team, Ira Smith Trustee, licensed insolvency trustee, receiver, trustee, unsecured creditors

Brandon Blog Post

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

Post author By Brandon Smith
Post date August 10, 2020

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

Keep healthy and safe everybody.

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

CCAA Canada introduction

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

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

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

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

What does CCAA Canada protection mean? CCAA vs Chapter 11

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

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

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

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

Can CCAA Canada protection be extended?

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

Who gets priority under a CCAA Canada filing?

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

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

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

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

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

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

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

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

What happens to shareholders in a CCAA Canada restructuring?

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

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

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

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

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

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

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

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

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

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

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

	34

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

ccaa canada graph

CCAA Canada summary

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

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

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

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

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

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

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

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

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

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

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

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

Keep healthy and safe everybody.

Brandon Blog Post

BUSINESS DEBT ADVICE CANADA: TROUBLE SHOOTING DEBT STRAPPED COMPANIES

Post author By Brandon Smith
Post date May 30, 2018

Business debt advice Canada: Introduction

When it involves money, timing is everything. Your business is getting closer to the top of its banking line and your banker is asking for more information than usual. This is where your heart starts pounding faster and your stress level increases. This is the moment you can seize to right size your business or else it very well may fail. The purpose of my blog is to give you business debt advice Canada.

Business debt advice Canada: Relationships can become strained

Relationships can become strained with your lender and suppliers when business debts are mounting and your company is facing a cash crisis. However, there are actions a borrower can take to prevent calamity. Reassuringly, most of the time, lenders would rather support you if you have a viable business plan to correct the situation going forward, and not putting you out of business.

I hope the suggestions below shows you that you should look at this as an opportunity to fix your business. I have found that in trying times when a company has mounting debts and insufficient cash, there is no replacement for good management.

A solid business plan showing how the company will turn itself around is what your lender wants to see. Communication with your lender and your suppliers is key. Do not hide from the problem. Face it head on. If your business plan shows you can turn things around, you will feel like you are dealing from a sound platform and not just running scared.

Business debt advice Canada: Take emotion out of the equation

These situations generally become more tense before they become better. You, your lender and your unpaid suppliers all want the same thing. You all want the company to be successful and profitable, and to be able to pay all of its bills in full when due. Your lender and suppliers are not out to get you. However, if they do not: (i) know that you have solid business turnaround plan; and (ii) receive ongoing information to show what steps you are taking to fix the problems, they will have no choice but to turn off the tap.

I have unfortunately seen too many companies fail in their business restructuring efforts due to lack of communication. The turnaround plan may have been sound, but nobody knew. This only creates ill will among the stakeholders and a result that nobody wants.

Business debt advice Canada: Informal and formal turnaround options

I must preface this section by saying do not be afraid to consult with a licensed insolvency trustee (LIT) for business debt advisory services. Trustees’ training makes them expert in assessing troubled business situations and implementing turnaround steps. A LIT does a lot more than just bankruptcy.

You will find it helpful to have a professional trustee assist you in developing your turnaround business plan, implementing it and keeping management focussed and accountable. You will also find it very helpful to have a LIT go with you for meetings with your banker; there will be many of those!

Business debt advice Canada: Troubleshooting

Fully understanding the full current status of the company showing signs of financial trouble is key. Things that I focus on early on when looking at troubled companies are:

What are all the different assets of the company and where are they located?
Are all the assets properly insured?
What is the going-concern value and the estimated liquidation value of the assets?
What is the full extent of all liabilities and business debt levels? This includes amounts owing to the government for:

- unremitted source deductions
- outstanding HST
- amounts owing to lender(s) and other secured creditors
- amounts owing to employees; and
- amounts owing to unsecured trade suppliers
What is the status of premises lease(s) for both remaining term and cost?
Is the cost of the leased premises above or below current market value?
Has anyone personally guaranteed bank debt, the landlord or any other creditor that would affect turnaround decisions to be taken?
Has a current crisis cash-flow statement and turnaround business plan been developed and tested for reasonableness?
What are the causes of the company’s current financial problems and how likely are those causes to recur?

This list is not meant to be exhaustive. No doubt other questions will arise as answers are found for these first questions. However, this is the information I first want to get before embarking on developing a restructuring plan.

Business debt advice Canada: Informal restructuring and turnaround

If the business problems have been identified early and have not been allowed to fester, then an informal restructuring may very well work. Perhaps all that will be needed is some accommodation from the lender both in time and money. Banks are quite willing to enter into a forbearance agreement with their corporate client allowing the time (and sometimes more money) to see if the turnaround plan will work.

The bank would rather have a successful turnaround than shut you down. The bank needs to know that management has the bench strength to pull off the restructuring. If not, they will expect you to have a lawyer experienced in turnarounds and a LIT active on your team.

Companies that have relatively few trade suppliers may also be able to work out a restructuring of their unsecured debt. The fewer people you have to talk to and get onside, the higher the likelihood of success. Of course, the trust developed from earlier dealings is very important. If there is no trust, or if there are just too many suppliers, an informal restructuring will not work with them.

Business debt advice Canada: Formal restructuring

The Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA) and the Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36) (CCAA) are the two primary Federal statutes that govern corporate restructuring in Canada. The requirements of each statute and the exact processes themselves are weighty enough to deserve their own blog. However, the takeaways from this blog on formal restructuring are:

In a formal restructuring, I still go through the checklist I have identified above of issues to look into.
Under the BIA, the restructuring section is Part I Division III of the BIA
If a restructuring under the BIA does not receive the necessary creditor AND court approval, the company will automatically be bankrupt
In a formal restructuring, the company stays in control of its assets and business operations
A formal restructuring invokes a stay of proceedings so no party can begin or continue litigation or enforcement action against the company
A company needs to have at least $5 million in debt to restructure under the CCAA
A BIA restructuring will be less costly than a CCAA restructuring because the company does not have to go to Court for approval every time it wishes to do something
The term “bankruptcy protection” in Canada, refers to a formal restructuring under either the BIA or CCAA.

Business debt advice Canada: What to do if your company has too much debt

Is your business facing financial problems? Perhaps your company is in need of a restructuring. The Ira Smith Team can develop a restructuring plan which may or may not include the need to file for bankruptcy protection.

The Ira Smith Trustee & Receiver Inc. Team understands the pain you are going through trying to keep your company alive while trying to negotiate with potential purchasers. We understand that you are playing beat the clock, and the pain and stress you are feeling thinking that you may just run out of time. The bankruptcy protection process can ease this stress and provide a level playing field so that no potential purchaser takes advantage of you.

The Ira Smith Team has a great deal of experience in running a stalking horse stalking horse asset purchase agreement. The stress placed upon you due to your company’s financial challenges is enormous. We understand your pain points. Call the Ira Smith Team today for your free consultation. We can end your pain and put your company back on a healthy profitable path, Starting Over, Starting Now.

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

COMPANY RESTRUCTURING PROCESS CASE STUDY: HOW WE USED BUSINESS RESTRUCTURING IN CANADA TO SAVE THE BUSINESS AND JOBS

Post author By Brandon Smith
Post date March 28, 2018

Company restructuring process: Introduction

Over the last two weeks, we have provided you with real case studies from our files. This week’s case study is about our involvement with a company restructuring process so its business could continue to serve its clients and maintain most of the jobs.

Two weeks ago we described a personal insolvency case study, CLAIM BANKRUPTCY IN ONTARIO CASE STUDY: SHE REALLY WANTED TO BUT WE STOPPED HER AND SOLVED HER PROBLEMS, was about the surgeon who became insolvent because of a failed business venture and a divorce. The events leading up to the doctor’s insolvency convinced her that she had to go bankrupt. We then described the steps we took to restructure her affairs so she could avoid bankruptcy. She completed a successful Proposal under the Bankruptcy and Insolvency Act (Canada). More importantly, she regained her confidence, we eliminated her pain points and she is once again thriving emotionally, physically and financially.

Last week, we described a situation where we used our skill set in a different way. In our case study, COURT APPOINTED ESTATE TRUSTEE CASE STUDY: IF IT WAS EASY YOU WOULDN’T NEED US, we described how we ended a war between the two beneficiaries under a Will and monetized the assets for their benefit. In that situation, the Court appointed us as the court appointed estate trustee.

The company was a social media agency. Their clients were some of the largest household names in North America. The company made sure that their clients’ websites were eye-catching, technologically advanced using leading search engine optimization (SEO) and search engine marketing (SEM) techniques. In short, their clients had to show up on page 1 of an online search and that their websites were eye-popping and functional. The company was a Canadian and North American leader.

Company restructuring process: Life got in the way

The sole shareholder and Director experienced some health issues with a family member; that required her attention. She was tending to that emergency and it took her away from the business for lengthy periods of time. Experienced senior staff ran the business in her absence. The entrepreneur felt she could deal with business matters by telephone. They established a process where she signed documents and cheques prepared by staff members using couriers.

Company restructuring process: Senior staff were not trustworthy

WRONG!! Although she trusted the senior staff, they turned out not to be trustworthy. They made mistakes and assured the owner that the documents and cheques they prepared were correct.

They also provided her status reports assuring her that all client activities and projects were all on schedule. The reality was that certain senior staff were plotting to establish their own agency, to steal clients. The sole Director felt something was not right, but she could not pinpoint from afar what the issues were. She returned to the office and discovered that her worst fears were her new reality.

Company restructuring process: How bad was it?

Things were very bad. Billings were way behind. Cash flow had dried up. As a result of the lack of cash flow, the company was now behind in rent and had collected but did not remit source deductions totalling over $300,000. The unremitted source deductions formed a trust claim over all the company’s assets, ahead of the company’s bank. Learning all this information made the bank very uneasy and unwilling to lend any more money.

Company restructuring process: The short-term steps in financial restructuring

The sole Director and shareholder of the company contacted us. She was operating in panic mode. We assessed the situation. Our preliminary assessment was that catching up on the billings and the clients paying them in the normal course, good cash flow would return. There was also a good book of projects to start on; just not as many as normal. Thankfully, no clients had left yet.

The short-term plan we developed had 7 steps:

Fire the staff involved in the attempt to start-up their own firm and steal clients. Pay their normal wages and vacation pay, but not pay in lieu of notice.
File immediately a Notice of Intention To Make a Proposal (NOI) to invoke the stay of proceedings (Stay Period) so that no creditor could take action against the company.
Immediately bill all unbilled projects and begin collection efforts on any outstanding invoices.
Reach out to all major clients to reassure them that the entrepreneur was in control after returning from the family emergency and that she would personally be supervising all work performed.
Prepare a crisis cash flow model that thankfully showed that the company could cash flow itself since the amounts owing to the unsecured creditors was not caught in the restructuring.
The company required fresh capital. Luckily, the entrepreneur had enough funds to inject.
Meet with the company’s banker to explain the situation and share the emergency cash flow to show that the company did not need any new funds from the bank and that the principal was going to inject the temporary funds necessary. This gave the banker the assurance that the bank line would not be pressed any further, and that the entrepreneur was willing to put her money where her mouth was.
company restructuring process

Company restructuring process: The long-term plan

Now that the situation was stabilized, we worked with the company to look at longer term restructuring needs. It needed a business debt restructuring process. We determined that the company had too much space. As it did not need to immediately replace the terminated staff, it now did not need as much space. Certain space could be given up without affecting the main space and the business.

The landlord of course was not happy about this, but was willing to work with the company. If the landlord was not cooperative, the backup plan was to repudiate the unnecessary space through the formal restructuring plan.

The terminated employees retained legal counsel, who made himself known. Various issues arose from this. Were they going to seek leave of the bankruptcy court to launch litigation for damages against the company? What counterclaim could the company prove? Should we agree to attempt to value what claims they may have without litigation and include them in the restructuring plan?

Company restructuring process: The need for more time

Upon the filing of the NOI, the company obtained a first 30 day stay where its creditors could not pursue it and to file the real restructuring proposal. The company had to run for at least a few weeks to assess if the real performance was similar to the cash flow forecast developed on day 1.

Therefore, the company’s lawyers went to bankruptcy court to seek a 45 day extension for the company to file its bankruptcy protection restructuring plan. As Trustee, we had to prepare and file our report with the court to attest to the fact that:

an extension of the Stay Period is required to enable the company to continue to run in the ordinary course and complete its restructuring proposal;
the company continues to act in good faith and with due diligence; and
no creditor would be materially prejudiced by the extension of the Stay Period.

The Court granted the extension for this company restructuring process.

Company restructuring process: The corporate debt restructuring process

We could now finish the real corporate restructuring proposal through this bankruptcy protection process. Given the unknown of the final valuation of the terminated employees’ claims, if any, we had to build in further protection for the company. We decided that the company’s bankruptcy protection plan would be what is known as a “basket proposal”. The amount of funds available for the unsecured creditors would be a fixed amount. So, whatever the claims ended up being, the size of the pot never changed.

Under the bankruptcy laws in Canada for a corporation undergoing a corporate restructuring, we had to ensure that there were sufficient funds for the unsecured creditors to share in “the pot”. The amount had to be realistic, to get the required majority of unsecured creditors voting in favour of the corporate restructuring plan. We also had to ensure that the bank was not being compromised in the proposal and that we communicated that clearly to the bank.

Company restructuring process: The government trust claim

As stated above, the unremitted source deductions were a trust claim. The restructuring bankruptcy laws in Canada state that such a claim has to be repaid in full within 6 months of Court approval of the restructuring proposal. We revisited the company’s cash flow. Although the company was on track, over the next year, money was needed to reinvest in the business.

The entrepreneur had no more money from her own resources. Therefore, after allowing for operations and the payment of the past unremitted source deduction amount of about $300,000, we could only offer the unsecured creditors roughly 5 cents on the dollar of the proven claims from future operations. The company promised to pay that amount within 6 months of retiring the government trust claim amount. So, within 1 year of Court approval, the unsecured creditors would get their money from the corporate restructuring plan.

Company restructuring process: Solving the terminated employee claims

Seeing this, the terminated employee group did not wish to spend funds on litigation, only to receive 5% of whatever claim they may have from the restructuring plan. We ended up agreeing to a very modest amount to represent their claims in the proposal.

The meeting of creditors was held and we obtained the required majority of creditors voting in favour of the business restructuring proposal. The creditors realized it was a better outcome than if they voted the company into bankruptcy. They voted in favour of the company restructuring process. We then obtained the necessary Court approval.

Company restructuring process: The result

The company turned its operations around. It survived the coup by the terminated employees. The company produced enough cash profits to retire the government trust claim debt within 6 months of court approval. It also paid the proposal fund amount to us as Trustee on time, to be distributed to the unsecured creditors.

The company successfully restructured and operated profitably afterwards. The entrepreneur was able to sell her company several years later and retire.

Company restructuring process: The financial restructuring process

The financial restructuring process is complex. The Ira Smith Team understands how to do a complex corporate restructuring. However, more importantly, we understand the needs of the entrepreneur. 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. We look at your entire situation and devise a strategy that is as unique as you and your company’s problems; financial and emotional. The way we dealt with this problem and devised a corporate restructuring plan, we know that we can help you and your company too.

We know that companies facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a company restructuring process as unique as the financial problems and pain it is facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get your company back on the road to healthy stress free operations and recover from the pain points in your life, Starting Over, Starting Now.

COMPANY RESTRUCTURING PROCESS 11 — company restructuring process

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Brandon Blog Post

BANKRUPTCY TRUSTEE IN VAUGHAN BECOMES LICENSED INSOLVENCY TRUSTEE

Post author By Brandon Smith
Post date February 22, 2017

The bankruptcy trustee in Vaughan: Why did we transform into a licensed insolvency trustee?

Similar to caterpillars turning into butterflies, this bankruptcy trustee in Vaughan went through a metamorphosis. The Office of the Superintendent of Bankruptcy officially changed the name “bankruptcy trustee” to “licensed insolvency trustee” (LIT). As of April 1, 2017, all licensed trustees must have fully transitioned to the use of the LIT designation.

The purpose of this blog is to offer an overview of the Canadian insolvency process. Think of it as a bankruptcy and insolvency lesson 101.

What is the purpose of the Bankruptcy and Insolvency Act

Among the primary functions of this insolvency process, it is to release the individual from specific financial debts. It is to give a straightforward honest but unfortunate debtor a “new beginning.”. The debtor has no responsibility for discharged financial obligations.

A discharge is available to personal bankrupts, not to corporations. Although a personal case typically causes a discharge of financial debts, the right to a discharge is not absolute. Some sorts of debts may not be released. Section 178(1) of the Bankruptcy and Insolvency Act (Canada) (“BIA”) sets out the types of debts that are not released by the discharge of the bankrupt. The kinds of debts that are not released are:

1. child support and alimony;

2. fraud or near fraud;

3. debts arising from Court orders.

Where can I do some of my research?

You must initially do some of your own research to get an idea of exactly what your choices are. One place to start is our website to learn about:

Personal Services

Once you have a good handle on what to expect, speak to a LIT to begin discussing what actions you have to take next.

bankruptcy trustee in vaughan

The BIA

The BIA allows for a procedure that permits people and companies to be released from all of their financial debts through either:

a restructuring (Consumer Proposal, Division I Proposal or the Companies’ Creditors Arrangement Act) under secure arrangements of the federal insolvency statute; or
through bankruptcy by turning over their property to a licensed insolvency trustee to realize upon it for the general benefit of creditors.

Either way, the funds available for distribution to the creditors are paid out by the licensed insolvency trustee. It is according to the scheme of priority laid out in the BIA.

The Court will consider approving a repayment plan that will repay the approved part of the financial obligations in no more than 5 years. When you use the restructuring provisions of the BIA (Consumer Proposal or Division I Proposal), you need to have a payback strategy to show your creditors just how you are going to pay back your debts. A successful restructuring plan is an alternative to bankruptcy and will allow a person or company to avoid bankruptcy.

There are various rules and ways that must be followed. Your licensed insolvency trustee can go over all the issues with you and is there to aid you through the process.

How does it all work?

Canada’s insolvency legislation is designed for debtors experiencing financial problems who cannot pay their present financial obligations and don’t have enough cash flow to offer a restructuring plan to avoid bankruptcy. The aim is to get a release from their existing debts.

The premise of the BIA is that the individual must deliver all of his or her non-exempt assets to the licensed insolvency trustee. The trustee will sell them for distribution to the creditors. In return, other than for either secured debts or the class of debts not released by a discharge from bankruptcy discussed above, the person’s debts will be erased. The person will be able to maintain any type of property that is categorized as exempt under provincial regulations. In this way, a discharge allows the individual to return to society as discharged bankrupt. This allows the person to start all over again.

Your credit score

Filing in an insolvency process could impact your financial resources and credit score for years. You should very carefully weigh all your options before choosing the bankruptcy option. That is a discussion a licensed insolvency trustee will be happy to have with you and will help you in first trying to find one of the possible bankruptcy alternatives. Hopefully, together you can see which one is best for you. Only if there is not an available alternative, will the trustee recommend bankruptcy?

A current bankruptcy filing may prevent you from acquiring a mortgage or other financing for years. Credit card businesses will instantly end your charge cards when you file for bankruptcy. Likewise, if you are trying to find a job or rent a place to live, some employers or property owners might look unfavourably on a current bankruptcy filing. If other applicants are as qualified as you and don’t have a bankruptcy on their record, you probably won’t be chosen.

Fresh start

Bankruptcy permits people or companies that are unable to pay their debts to settle their monetary difficulties and start restoring their credit. Declaring bankruptcy will trigger the “stay of proceedings”, preventing creditors from starting or continuing any legal action to collect their debts.

A bankruptcy filing will stay on your credit report for about 7 years. Since many financial debts can be discharged in bankruptcy with certain exceptions, people can take certain steps to begin boosting their credit rating after filing for bankruptcy and for sure after obtaining their discharge.

What to do if you are experiencing financial hardship

I hope this bankruptcy trustee in Vaughan Brandon’s Blog was helpful to you. People experience financial hardship for many reasons. If you’re experiencing financial hardship and are looking for a way out, contact Ira Smith Trustee & Receiver Inc. With immediate action and the right plan for moving forward, we can set you on a path to debt-free living Starting Over, Starting Now. All it takes is one phone call.

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Brandon Blog Post

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

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Step 7 – Trustee notifies known creditors

Step 8 – Trustee safeguards assets

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Is your company experiencing financial difficulty?

Company restructuring process: Introduction

Company restructuring process: The social media agency

Company restructuring process: Life got in the way

Company restructuring process: Senior staff were not trustworthy

Company restructuring process: How bad was it?

Company restructuring process: The short-term steps in financial restructuring

Company restructuring process: The long-term plan

Company restructuring process: The need for more time

Company restructuring process: The corporate debt restructuring process

Company restructuring process: The government trust claim

Company restructuring process: Solving the terminated employee claims

Company restructuring process: The result

Company restructuring process: The financial restructuring process

The bankruptcy trustee in Vaughan: Why did we transform into a licensed insolvency trustee?

What is the purpose of the Bankruptcy and Insolvency Act

Where can I do some of my research?

The BIA

How does it all work?

***Statute of limitations in Ontario* and the Effect of *Form 79 Statement of Affairs***

**Can statutes of limitation barred claims be proved in bankruptcy?**

***Statute of limitations in Ontario:* *Get a personalized debt free plan today***

**What is debt management in Ontario plan?**

**The definition of the word deprive and the insolvency and bankruptcy act context**

**The anti-deprivation rule in the Canadian insolvency and bankruptcy act matters**

**The Bramalea case and its relevance of insolvency and bankruptcy act matters**

**The Bramalea insolvency and bankruptcy act decision**

**The Chandos Alberta court case and the anti-deprivation rule for insolvency and bankruptcy act matters**

**Trustee appeals the Chandos insolvency and bankruptcy act decision to the Court of Appeal for Alberta**

**Chandos appeals to the SCC in this insolvency and bankruptcy act anti-deprivation rule case**