Re Friedman (2008), 49 C.B.R. (5th) 131 (Ont. S.C.J. in bankruptcy)
Mr. Friedman assigned his rights to royalties he would receive from SOCAN, the Canadian copyright collective that administers royalties for tis members, to his music publisher, to secure loan advances to him from the publisher.
Resin Systems Inc. v. Global Composite Manufacturing Inc., [2008] O.J. No. 5427, (Ont. S.C.J., Commercial List)
Resin developed certain equipment used to manufacture transmission poles. Resin entered into a manufacturing and licence agreement with Global Composite, and leased the equipment to Global Composite to make and improve the product. The agreements provided Global Composite was to keep the equipment free of any lien or claim, unless there was the express written consent of Resin.
Innovation Credit Union v. Bank of Montreal [2009] S.J. No. 147; 2009 SKCA 35, on appeal from 2007 SKQB 471
October 1991: Saskatchewan farmer James Buist (“Debtor”) granted a general security agreement to Innovation Credit Union (“CU”). The general security agreement was not perfected under the Saskatchewan Personal Property Security Act (“PPSA”) by registration.
When can shareholders also have employee status?
As the saying goes, an ounce of prevention is worth a pound of cure. This expression is particularly apt when it comes to secured creditors and their registrations under the Ontario Personal Property Security Act (the “PPSA”). Although “getting it right the first time” has always been the mantra of secured creditors, the economic roller coaster ride of recent months has heightened the need to ensure a properly perfected secured claim.
Tax treatment in the hands of the creditor
The waiver of debt results in the accounting ‘loss’ of a receivable. Such loss, however, is not automatically tax deductible in the hands of the creditor.
The deductibility of such loss may be prohibited, either because it is deemed not to be incurred to retain or increase taxable income (‘general deduction criterion’), or because it is deemed to be an ‘abnormal or benevolent advantage’ granted to the debtor (‘anti-abuse rule’).
Tax treatment in the hands of the creditor
In Sweden, debt is typically waived through either judicial settlement (Sw. offentligt ackord) (which will not be discussed here) or through private settlement (Sw. underhandsackord) between creditor and debtor.
Tax treatment in the hands of the creditor
The waiver of an outstanding debt by a creditor shall be treated as an extraordinary loss for accounting purposes. As taxable income for corporate income tax purposes is calculated from the company’s accounting results assessed upon accounting regulations, such loss is normally deductible unless income tax law provides for an adjustment.
Tax treatment in the hands of the creditor
Polish tax regulations provide three major methods for obtaining a tax deduction for irrecoverable debt: waiver or forgiveness of debt, debt write-off and revaluation write-off.
Tax treatment in the hands of the creditor
The tax treatment of the forgiveness of debt within a group of companies depends on whether or not such forgiveness is of a “normal nature”. In order to be considered as being of a normal nature, the ‘advantage’ granted by a parent/creditor to its subsidiary/debtor must involve valid business reasons.