When a lender makes an interest bearing loan to a borrower for a fixed term, the contract may provide that the borrower cannot repay the principal sum before maturity. This is often referred to as a “no call” provision. The intent of this provision is to protect the lender’s expected return on its investment during the term of the contract. Otherwise, the lender could be faced with the loss of interest payments that the borrower would have otherwise paid to the lender.
How can I protect my company from cash flow problems due to outstanding payments?
It is well worth keeping a close eye on your customers to spot any early signs of financial distress and act quickly.
On November 16, 2016, the Ontario Ministry of Government and Consumer Services (“MGCS”) posted the Fall 2016 report (the “Report”)[1] of the Business Law Advisory Council (the ”Council”), which was formed by the MGCS in March 2016 to put forward recommendations for modernizing Ontario’s corporate and commercial statutes.
In May 2015, I wrote an article about the conflicting lower court decisions in Raithatha –v- Williamson and Horton –v- Henry, concerning undrawn pension entitlements and income payment orders. The Court of Appeal has now finally handed down its long expected Judgment.
The tension between a trustee seeking to facilitate a proposal for the benefit of all creditors and a single creditor being forced to release its rights for the “greater good” was front and center in a recent case before the Supreme Court of British Columbia.
When someone is made bankrupt, their interest in the family home vests automatically in their Trustee in Bankruptcy, upon his or her appointment. The Trustee has 3 years from the date of the bankruptcy order to realise this interest. The Trustee will first of all ask if a third party is willing and able to purchase the Trustee’s share, usually 50% of the available equity. If that is not possible, then the Trustee will request that the property is put on the market for sale. As a last resort, the Trustee can apply to the Court for an order for possession and sale of the property.
Under the insolvency legislation, any dispositions of property or payments made by a company after it has been presented with a winding up petition are void, unless validated by the Court.
We are currently still in a lot of unknown territory; so how will our exit from the EU affect Debts here in the UK, in Europe and in other countries?
Once the UK finalises the exit from the EU, any debts someone may have in the EU will fall into the category of similar non-EU debts in other countries, such as the United States. Whilst you can include those debts in a UK bankruptcy you are only afforded the protection from them in the UK.
What can happen to you if your pre-payment is lost is demonstrated by the recent administration of budget tour operator Lowcostholidays. The company’s administration left customers already abroad at risk of being asked by hotel owners to settle their bills before leaving and meant that other customers lost deposits paid for holidays which will now, sadly, not take place.
Prior to 1930 if an insured person/company (insured) incurred a liability to a third party (TP) but then became bankrupt/passed into liquidation any monies paid out under the insurance policy was paid to the Trustee/Liquidator for the benefit of ALL creditors.
The Third Parties (Rights Against Insurers) Act 1930 (1930 Act) transferred the insured’s rights against the insurer under certain circumstances to the TP who could pursue the insurer against the policy proceeds once the insured’s liability was established. So the policy proceeds may benefit the TP and not all creditors.