La Cour supérieure du district de Québec est saisie d’une requête en homologation d’une proposition aux termes de l’article 58 de la Loi sur la faillite et l’insolvabilité (la « LFI »). Le tribunal précise que son rôle n’est pas de modifier le contenu du concordat qui a déjà été accepté par les créanciers mais qu’il ne peut que l’approuver ou le rejeter.

Avant de rendre sa décision, la Cour fait état de la « controverse jurisprudentielle » quant à la nécessité de signifier au préalable les préavis d’exercice du droit hypothécaire du Code civil du Québec avant d’être autorisé à procéder à une vente d’actifs en vertu de l’article 243 LFI. Trois (3) décisions en ce sens ont été rendues par la Cour du district de Saint-François à ce sujet, alors qu’une (1) décision rendue dans le district de Montréal est à l’effet contraire.

When a company is facing short term financial difficulties the directors or shareholders may decide to make a loan to the company to pay wages. 

We are asked from time to time to assist with the dissolution of an existing registered charity.  However, often we suggest to our clients that it might be better for them to either amalgamate the existing charity into another charity or keep it in existence but inactive.

There are various reasons why charities wish to dissolve.  Sometimes the problem that they were established to address has been solved.  Sometimes there is no leadership left to govern or manage the charity.  Other times the work once done by the charity has been taken over by another charity.

One of the primary reasons why people declare bankruptcy is that upon being discharged, the bankrupt person is released from their obligation to repay most of the debts that had existed at the time they went bankrupt. I say most because there are certain exceptions to this rule, debts that the Bankruptcy and Insolvency Actitemizes as debts not released by an order of discharge.

Debts claimed in statutory demands must be due and payable to the creditor named in the statutory demand.

When disputing statutory demands it is common for debtor companies to argue an offsetting claim, so as to reduce or extinguish the amount claimed in the statutory demand.

For there to be a valid offsetting claim there must be ‘mutuality’, meaning that the legal capacities in which both the offsetting claim and the statutory demand debt are each claimed and owed must align.

Intellectual property rights are meant to protect that which cannot be easily protected: ideas, images, music and brands. The creators of these intangible concepts are given an economic monopoly over them, in the hopes of fostering greater creativity and economic growth. Bankruptcy law, on the other hand, seeks to equitably distribute the property of the bankrupt among its creditors, subject to the rights of secured creditors.  There is an inherent conflict between the rights of two groups.

A recent Victorian case has worrying implications for financiers and creditors.

A decision of the Victorian Court of Appeal in Vasudevan v Becon Constructions (Australia) Pty Ltd [2014] VSCA 14 has the potential to significantly broaden the power of a liquidator to attack a company transaction under section 588FDA of the Corporations Act 2001 (Act) where there are ‘indirect benefits’ to a director or close associate of a director of the company.

Obtain advice before you lodge a proof of debt or vote in a liquidation

Secured creditors should remember that submitting a proof of debt and voting in a liquidation may result in the loss of their security if they get it wrong.

The Supreme Court of New South Wales has delivered a timely reminder to secured creditors of a company in liquidation, where the secured creditor lost its security because it submitted a proof of debt for the full amount of its debt and voted on a poll at a creditor’s meeting for its full debt.

Liquidators are commonly appointed to a company where, prior to liquidation the company was a trustee of a trust. Often when the liquidators are appointed, the company has ceased to be the trustee and a replacement trustee has not been appointed.

In these circumstances, the company in liquidation is a bare trustee in relation to the trust assets and the liquidator will assume this role until a replacement trustee is appointed. Often a replacement trustee is not appointed.

Does the liquidator as bare trustee have a power to sell trust assets?