Exam 15: Priority of Creditors

In Re Fancy, a businessman knew that he was facing substantial losses from pending litigation. Shortly before declaring bankruptcy, he transferred his interest in the matrimonial home to his wife. What was the result?

The owner of the house had contracted with a general contractor, Mr. Hadrian, for a greenhouse addition to the house at a cost of $20,000. In accordance with legislation, the owner withheld 10% and waited the legislated period of time within which any liens were to be filed. Which of the following correctly describes the owner's liability?

Discuss situations in which a secured creditor may opt not to seize property used as security and the rationale for taking this approach.

Joe worked as a subcontractor for Harry in framing a house owned by Sam. When it became apparent to Joe that he was not going to be paid by Harry, what rights did Joe have under these circumstances?

Give three examples of types of things that can be used as security under the Personal Property Security Act.

Explain the purpose of the Fraudulent Preferences Act (name will vary from province to province).

What is the effect on a corporation when it goes bankrupt?

A company named Printers World Ltd. bought a $9000 plotter secured by a Security Agreement and, because of business reverses, is unable to make the payments. Which of the following is accurate with respect to the legal position of the parties?

Why is the distinction between a guarantee and an indemnity important?

Hank sold three properties for Mr. W and had been paid his commission for the first, but not for the last two. Hank had done everything according to the contract and according to the relevant statutes, but Mr. W wouldn't pay. Hank knows that Mr. W has a bank account with the Bank of Winnipeg and has money owing to him from a Mr. Gregory. With regard to the collecting of the debt owed, which of the following is False?

When the value of the security is not great enough to cover the debt, a secured creditor is an unsecured creditor for that outstanding amount.

Bret decided to enlarge the fishpond in his backyard. He contracted with a general contractor, Conan. Conan subcontracted with Darson to do the excavation and with Ericson to do the plumbing. Conan's own workers did the masonry work. Bret made "progress payments" to Conan, since Conan said such payments were necessary to pay his workers and subcontractors. Bret learned that the workers and subcontractors had not been paid and Conan had used the payments to pay debts unrelated to the job on Bret's pond. Which of the following best describes Bret's position?

Compare assignment of contractual rights with negotiation of a negotiable instrument, indicating the advantages and disadvantages of each.

Owen had borrowed money from a credit union to purchase a car, and the credit union had required a security interest against the car, which they registered under the Personal Property Security Act. As well, Owen's father guaranteed the loan. Some months later, Owen decided to go back to school, and he had to sell the car to do so. He returned to the credit union and, at his request, the credit union gave up the security they had against the vehicle, knowing that they still had the loan guaranteed by Owen's father. Explain the wisdom of this move.

If a fraudulent transfer is made to a bona fide purchaser for value, the transaction can still be reversed for a period of one year.

Discuss alternatives to bankruptcy and why these alternatives might be preferable to bankruptcy itself.

What is the role of the Superintendent of Bankruptcy?

Which one of the following is False with respect to the Builders' Lien Act?

Which of the following is False with regard to property?

What obligations are placed on the owner of property in respect of builders' liens?