Bankruptcy Basics Flashcards

1
Q

Collective Proceedings Model

A

Uses Trustee to streamline process, orderly distribution of assets

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2
Q

Receivership

A

Commercial, benefit of secured creditors

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3
Q

Trustee

A
  • Actively administers bankrupt estate
  • Federal licensee
  • Prepare estate inventory
  • Gathering & realizing assets
  • Distributing proceeds
  • Final accounting to creditors/court
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4
Q

If banks are excluded from the BIA, may they make a claim against a debtor?

A

Yes, using Selkirk

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5
Q

Person under BIA

A

Individual
Corporation
Partnership
Co-Operative
NOT a bank/financial institution

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6
Q

Insolvency

A

Pre-requisite of Bankruptcy

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7
Q

Insolvent Person

A
  • Resides/Operates business in Canada
  • Owns property in Canada
  • Debts more than $1,000
  • Meets one condition of Insolvency Test

BIA s 2

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8
Q

Insolvency Test

A
  • Unable to meet obligations - Forward Looking Cash Flow Test
  • Has ceased paying obligations - Backward Looking Cash Flow, objective.
  • Assets not enough to pay obligations (Balance Sheet, inc. exempt/illiquid assets)

ONLY NEEDS TO MEET ONE

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9
Q

Bankruptcy Order

A

Involuntary

BIA s43(1)

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10
Q

Assignment in Bankruptcy

A

Voluntary

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11
Q

Act of Bankruptcy

A

At least one must have occurred within the previous 6 months.
10 possibilities (BIA s 41(1) (a)-(j)

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12
Q

Locality of Debtor

A

Application/Assignment must be made in place where debtor holds majority of their property.
Any Canadian property can make you insolvent under the BIA, but to use the Candadian bankruptcy scheme the debtor must hold the majorityof their property in Canada.

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13
Q

Secured Creditor

A

Will apply for bankruptcy order only if undersecured, will become an unsecured creditor for the difference between property value and secured amount.

BIA s43(2)

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14
Q

Debts

A
  1. Liquidated - known amount
  2. Unliquidated - unknown, i.e tort judgment.
  3. Unliquidated creditors cannot trigger a bankruptcy order
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