Question 1

Laura had made a commercial proposal (Division I)to her creditors.They have accepted it by a two-thirds vote.The next step is for the trustee to

Accepted Answer

A) schedule a hearing in the Bankruptcy Court. 
B) apply to the court to have the proposal declared binding upon all the creditors. 
C) get the approval of the receiver in bankruptcy. 
D) determine if the agreement is prejudiced against general creditors. 
E) file the document with the Superintendent of Bankruptcy. 
A) schedule a hearing in the Bankruptcy Court. 
B) apply to the court to have the proposal declared binding upon all the creditors. 
C) get the approval of the receiver in bankruptcy. 
D) determine if the agreement is prejudiced against general creditors. 
E) file the document with the Superintendent of Bankruptcy. B

Question 2

As far as claims against the property of a bankrupted debtor go,the trustee pays the general creditors in priority to which of the following?

Accepted Answer

A) secured creditors 
B) preferred creditors 
C) super priority claims 
D) deferred creditors 
E) unpaid sellers 
A) secured creditors 
B) preferred creditors 
C) super priority claims 
D) deferred creditors 
E) unpaid sellers D

Question 3

James had made a consumer proposal (Division II)to his creditors.He wanted a reduction and extension of time for the payment of his debts.A formal meeting was not requested by any of the creditors.Now the administrator must

Accepted Answer

A) run a public notice in the newspaper. 
B) get approval of the proposal from the court. 
C) notify and file the document with all creditors. 
D) provide counselling to the debtor. 
E) see that all the provisions meet Division I rules. 
A) run a public notice in the newspaper. 
B) get approval of the proposal from the court. 
C) notify and file the document with all creditors. 
D) provide counselling to the debtor. 
E) see that all the provisions meet Division I rules. C

Question 4

What is the object of bulk sales legislation?

Accepted Answer

The object of bulk sales legislation is

Question 5

Businesses are often required to extend credit as a means of increasing sales.Before granting credit,businesses are encouraged to take any of the following steps EXCEPT

Accepted Answer

A) take advantage of the available public records of credit history,proposals,and bankruptcies. 
B) search both the corporate name of the debtor and its directors and officers to determine if the company is merely a fresh start after a bankrupt business. 
C) not request personal guarantees of the principals because the company's agreement to pay will always suffice. 
D) take security in the goods provided. 
E) set up a control system to monitor lien periods for building supplies and limitation periods. 
A) take advantage of the available public records of credit history,proposals,and bankruptcies. 
B) search both the corporate name of the debtor and its directors and officers to determine if the company is merely a fresh start after a bankrupt business. 
C) not request personal guarantees of the principals because the company's agreement to pay will always suffice. 
D) take security in the goods provided. 
E) set up a control system to monitor lien periods for building supplies and limitation periods.

Question 6

In bankruptcy proceedings,the term "settlements" refers to

Accepted Answer

A) the amount each creditor is willing to settle for to satisfy its claim. 
B) the end results in the bankruptcy proceedings. 
C) the negotiations between classes of creditors. 
D) gifts of property made by the debtor before becoming bankrupt. 
E) complying with each provision in the Bankruptcy and Insolvency Act. 
A) the amount each creditor is willing to settle for to satisfy its claim. 
B) the end results in the bankruptcy proceedings. 
C) the negotiations between classes of creditors. 
D) gifts of property made by the debtor before becoming bankrupt. 
E) complying with each provision in the Bankruptcy and Insolvency Act.

Question 7

I.M.Construction Ltd.decided to profit from the real estate boom and build a small retail and office building on land that it owns.Before the building is complete I.M.Construction Limited becomes insolvent.The property is subject to a mortgage that is not fully advanced and to many builders' liens.There have been inquiries from a number of parties who would be interested in renting space in the building.The real estate market is still booming.What practical advice do you have for the mortgage company and the lien holders?

Accepted Answer

The lien holders should attempt to reach

Question 8

An unpaid seller who repossesses goods from a bankrupt and then sells them,can still make a claim for any deficiency in respect of those goods.

Accepted Answer

A) True 
 B)False

Question 9

What is a bulk sale?

Accepted Answer

A bulk sale is a sal

Question 10

To what extent does building lien legislation really protect subcontractors,workers,and suppliers of goods,and who really benefits?

Accepted Answer

While building lien legislation makes it

Question 11

Jumping Jellyfish Corporation is a Canadian business that is indebted to a number of persons and entities.On January 2,2003,the accountant of Jumping Jellyfish examines the books and makes the determination that the current debts of the corporation total $2 million,and the assets and cash total only $200 000.The accountant concludes that the corporation will be unable to pay its debts as they become due.The corporation is

Accepted Answer

A) insolvent and bankrupt. 
B) insolvent. 
C) a trustee. 
D) a receiver. 
E) bankrupt. 
A) insolvent and bankrupt. 
B) insolvent. 
C) a trustee. 
D) a receiver. 
E) bankrupt.

Question 12

In respect to a statute-barred debt,under what circumstances is there a presumption of a new promise to pay the whole indebtedness?

Accepted Answer

The presumption of a new promi

Question 13

Mike's business is not doing too well and he is contemplating bankruptcy unless things change soon.As he currently deals with his creditors,the guiding principle should be that

Accepted Answer

A) creditors of the same class should be treated equally. 
B) preferences should not include family or friends. 
C) all transactions within three months preceding bankruptcy are indefensible. 
D) transfers of property such as the sale of inventory will be invalidated. 
E) bankruptcy is an avenue of last resort and should be avoided at all cost. 
A) creditors of the same class should be treated equally. 
B) preferences should not include family or friends. 
C) all transactions within three months preceding bankruptcy are indefensible. 
D) transfers of property such as the sale of inventory will be invalidated. 
E) bankruptcy is an avenue of last resort and should be avoided at all cost.

Question 14

For five years,Maxine had been regularly receiving the same bill for $850 from Credit Landscaping.She didn't think she should pay it because they botched up the landscaping around her house.However,now,after these five years,she sends them a $425 cheque with a note saying,"Take this-it's all you're going to get." This move by Maxine will

Accepted Answer

A) start the time all over again on the statue of limitations. 
B) get herself out of the liability. 
C) have no effect on the limitation time period. 
D) immediately give rise to a legal action. 
E) spur Credit Landscaping to turn the balance owed over to a collection agency. 
A) start the time all over again on the statue of limitations. 
B) get herself out of the liability. 
C) have no effect on the limitation time period. 
D) immediately give rise to a legal action. 
E) spur Credit Landscaping to turn the balance owed over to a collection agency.

Question 15

Where a court grants a Companies' Creditors Arrangement Act stay of bankruptcy,the existing management of the business continues to operate the business under the supervision of

Accepted Answer

A) a receiver. 
B) a court ordered auditor. 
C) an elected sheriff. 
D) a court appointed monitor. 
E) a court ordered windup. 
A) a receiver. 
B) a court ordered auditor. 
C) an elected sheriff. 
D) a court appointed monitor. 
E) a court ordered windup.

Question 16

A trustee in bankruptcy has the same general duties as does a normal trustee.Explain.

Accepted Answer

Apart from her or his duties and obligat

Question 17

Under the Bankruptcy and Insolvency Act,what is a commercial proposal?

Accepted Answer

A commercial proposal is an offer made b

Question 18

The Steamboat Co.is Charlie's sole creditor.He owes them $6500 from his sign painting business.In order to obtain a receiving order,Steamboat must

Accepted Answer

A) comply with all formalities required by the federal Bank Act. 
B) make sure the debtor has committed an act of bankruptcy within the previous six months. 
C) file a petition with the court in the creditor's judicial district. 
D) provide the court with the name of the appointed trustee. 
E) prove the facts alleged by any other petitioning creditor. 
A) comply with all formalities required by the federal Bank Act. 
B) make sure the debtor has committed an act of bankruptcy within the previous six months. 
C) file a petition with the court in the creditor's judicial district. 
D) provide the court with the name of the appointed trustee. 
E) prove the facts alleged by any other petitioning creditor.

Question 19

In the context of bankruptcy proceedings,liquidating dividends are

Accepted Answer

A) proceeds from the sale of assets over and above the security claims. 
B) funds distributed to shareholders when a corporation is in bankruptcy. 
C) the distributed funds that are over and above the stated book value. 
D) unexpected returns from assets that were unaccounted for in the books. 
E) payments made to creditors from time to time as realization of the debtor's assets permits. 
A) proceeds from the sale of assets over and above the security claims. 
B) funds distributed to shareholders when a corporation is in bankruptcy. 
C) the distributed funds that are over and above the stated book value. 
D) unexpected returns from assets that were unaccounted for in the books. 
E) payments made to creditors from time to time as realization of the debtor's assets permits.

Question 20

The court might refuse a debtor's discharge by bankruptcy for any of the following reasons EXCEPT that

Accepted Answer

A) the debtor caused the bankruptcy by living off of funds taken from the business. 
B) the debtor neglected to keep proper books. 
C) the debtor failed to satisfactorily account for losses or deficiencies in assets. 
D) three months preceding bankruptcy the debtor gave an undue preference to a creditor. 
E) the debtor's assets proved insufficient to pay the unsecured creditors more than fifty cents on the dollar. 
A) the debtor caused the bankruptcy by living off of funds taken from the business. 
B) the debtor neglected to keep proper books. 
C) the debtor failed to satisfactorily account for losses or deficiencies in assets. 
D) three months preceding bankruptcy the debtor gave an undue preference to a creditor. 
E) the debtor's assets proved insufficient to pay the unsecured creditors more than fifty cents on the dollar.

Exam 29: Creditors Rights

Laura had made a commercial proposal (Division I)to her creditors.They have accepted it by a two-thirds vote.The next step is for the trustee to

As far as claims against the property of a bankrupted debtor go,the trustee pays the general creditors in priority to which of the following?

James had made a consumer proposal (Division II)to his creditors.He wanted a reduction and extension of time for the payment of his debts.A formal meeting was not requested by any of the creditors.Now the administrator must

What is the object of bulk sales legislation?

Businesses are often required to extend credit as a means of increasing sales.Before granting credit,businesses are encouraged to take any of the following steps EXCEPT

In bankruptcy proceedings,the term "settlements" refers to

An unpaid seller who repossesses goods from a bankrupt and then sells them,can still make a claim for any deficiency in respect of those goods.

What is a bulk sale?

To what extent does building lien legislation really protect subcontractors,workers,and suppliers of goods,and who really benefits?

In respect to a statute-barred debt,under what circumstances is there a presumption of a new promise to pay the whole indebtedness?

Mike's business is not doing too well and he is contemplating bankruptcy unless things change soon.As he currently deals with his creditors,the guiding principle should be that

Where a court grants a Companies' Creditors Arrangement Act stay of bankruptcy,the existing management of the business continues to operate the business under the supervision of

A trustee in bankruptcy has the same general duties as does a normal trustee.Explain.

Under the Bankruptcy and Insolvency Act,what is a commercial proposal?

The Steamboat Co.is Charlie's sole creditor.He owes them $6500 from his sign painting business.In order to obtain a receiving order,Steamboat must

In the context of bankruptcy proceedings,liquidating dividends are

The court might refuse a debtor's discharge by bankruptcy for any of the following reasons EXCEPT that

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

International Business Transactions

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