Exam 12: Bankruptcy

Karim Manji owns a small electronics business that is starting to lose money because a big box store opens nearby. Knowing that the business is about to go under, he uses the business's cash on hand to pay one of his creditors, Sushil Manji his cousin. A week later, insolvent, he files for bankruptcy. Which of the following is true respecting the payment to Manji?

Navtech Inc. filed a Division 1 proposal. All the secured creditors voted to accept Navtech's proposal. There were 9 unsecured creditors that were owed a total of $1,000,000. Circuits Inc. was one of the unsecured creditors and it was owed $750,000. Circuits voted to accept Navtech's proposal but the other 8 unsecured creditors rejected the proposal. As a result

Karl was diagnosed with cancer and had to quit work because he was very sick. Debts began to grow and Karl now owes $100,000 to the bank and credit card companies, plus $12,000 in unpaid child support payments, plus he still owes $80,000 on the mortgage on his condominium. Karl is hoping to avoid going bankrupt. Which of the following should Karl do at this stage?

Kastner Lumber Ltd. supplies lumber to Solti Construction Corp. Solti gets into financial difficulty and Kastner pressures it to return the lumber sent but not paid for. One month after returning the lumber, Solti goes bankrupt. Solti's trustee in bankruptcy wants to recover the value of the returned lumber from Kastner. Which of the following is TRUE?

In the distribution of a bankrupt's assets, preferred creditors are the last ones to be paid.

Persons who cannot meet their debts as they fall due will be automatically declared bankrupt.

It is easier for an individual to be discharged from bankruptcy than a corporation.

Which of the following statements is FALSE?

A receiving order is an order made by a court for a

If a person declares personal bankruptcy for the first time they are usually automatically discharged from all their debts within

A Division 1 Proposal can be used by any corporation or a consumer who owes more than $250,000 excluding a home mortgage.

Marissa declared personal bankruptcy in Ontario on May 1, 2015. Which of the following assets can Marissa NOT keep?

Jake declared personal bankruptcy in Ontario in 2015. Which of the following assets could Jake NOT keep?

Which of the following statements is FALSE?

In a bankruptcy unsecured creditors are owed a total of $900,000. Unsecured creditor A is owed $600,000, unsecured creditor B is owed $200,000 and unsecured creditor C is owed $100,000. There is only $300,000 available to the unsecured creditors. As a result creditor C will get

The purpose of the CCAA is

If a person declares personal bankruptcy for the second time, they are usually automatically discharged from all their debts within

A procedure where a debtor by agreement with their creditors reorganizes their debts without going bankrupt is called

Which of the following is NOT an act of bankruptcy?

If a person or corporation goes bankrupt the role of the Trustee in Bankruptcy is to