Robert Badger Operated a Hardware Business as a Sole Proprietorship

Essay

Robert Badger operated a hardware business as a sole proprietorship and owed $200,000 to creditors. On June 1st, 1998 he transferred $20,000 of inventory to Smith Supplies Inc. to pay in full the indebtedness he owed that company. At the time he was not paying his debts as they became due. Instead he paid some money towards accounts when pressed or negotiated with them to give him more time to pay. On July 15th, he transferred a truck used in the business for one dollar to his cousin. On July 20th, a creditor obtained a default judgment and the Sheriff seized goods on July 28th in relation to that judgment. The goods were later sold in a judicial sale. On July 29th, he purchased on credit $15,000 worth of new inventory. On August 14th, a creditor petitioned him into bankruptcy. List each incident where there is an act of bankruptcy. Discuss Robert's situation in relation to the provisions of the Bankruptcy and Insolvency Act.