Exam 31: Creditors Rights

You are a duly licensed and appointed trustee to handle the Markin Brothers bankruptcy. You have taken possession of both personal and business assets of Sam and Joe Markin. You have retrieved all the books and documents relating to their affairs. You also have the authority to do each of the following EXCEPT

Regarding bankruptcy, what does it mean not to be dealing at "arm's length" with another party? When might this occur?

Under the Bankruptcy and Insolvency Act, the claims of unpaid employees against the assets of a bankrupt employer rank in priority:

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 many Builder's 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?

A secured creditor does not have to prove its debt before its debt ranks as a claim against the bankrupt's estate.

How is a limitation period calculated?

In a bankruptcy proceeding, the creditors can, if they wish, appoint

One of the guiding principles of bankruptcy is creditor equality. Explain.

What conditions must a creditor satisfy to be successful in obtaining a receiving order?

All creditors are considered to be equal in bankruptcy law.

Beth just remembered a promissory note; where her cousin John owes him $2000. It was a business loan made six and a half years ago. The note was written up as a one- year 6% note, but informally the understanding was that John would pay it back "as soon as the business got on its feet". John has made no mention of it, but his business is currently doing quite well. Thinking of the limitations statute, can Beth sue on this promissory note?

The Bankruptcy and Insolvency Act distinguishes between three classes of debtors.

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

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

The power of the federal government over trade and commerce enables the federal government power to regulate:

The federal Bankruptcy and Insolvency Act is not intended to

What is the object of Bulk Sales legislation?

An insolvent person may voluntarily declare himself bankrupt by

When a debtor makes an assignment is bankruptcy, the court will discharge the person from obligations to creditors.

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