Golden Rule 1: comply with the 7 general duties in the Companies Act 2006 (“the Act”)
In your capacity as a director you need to individually and personally comply with the seven codified statutory duties as a starting point.
The Québec Superior Court recently rendered a judgment (Francis v. Adobe 2018 QCCS 2547) confirming that a bankrupt's debt may be declared non-releasable by a discharge order pursuant to section 178 of the Bankruptcy and Insolvency Act (the "Act"), even when said discharge order has not yet been rendered or when the bankrupt's discharge has been suspended or granted conditionally pursuant to section 173 of the Act.
The benefits of being a director of a limited company are many. Not necessarily because of the tax benefits but, rather, the personal protection given to directors by the corporate veil surrounding limited companies.
That corporate veil means that directors’ liabilities for the debts of the company are limited to the extent of their shareholding (maybe £1) in the UK this concept (outside insolvency) is sacrosanct and protected by the Courts.
2018 has been one tough year on the High Street...
Retail, as a sector, has long been under pressure from increased competition from online retailers, which has resulted in reduced footfall on the High Street, affecting many companies, including many well-known names.
In 2002 the Supreme Court of Canada, in Bank of Montreal v Dynex Petroleum Ltd, 2002 SCC 7 (Dynex) affirmed that gross overriding royalty interests (GOR) could constitute interest in land provided the parties so intended and that intention was sufficiently evidenced in an agreement.
The plaintiffs in the underlying action, Art and Wendy Douglas, owned property in Kingston where there was an oil leak in January of 2008. The defendants, who had supplied the oil, sent an environmental clean-up company to remediate the property after being alerted of the leak. The plaintiffs' insurer, State Farm Fire and Casualty Company (the "Insurer"), ultimately indemnified the plaintiffs in full and paid for repairs, remediation, additional living expenses of Mr. Douglas, personal property and related damages totaling more than $800,000.
Canada v Callidus Capital Corporation
In Royal Bank of Canada v. A-1 Asphalt Maintenance Ltd. the Court was asked to determine the priority of claims in a bankruptcy between Royal Bank of Canada (the "Bank"), a secured creditor of the bankrupt, A-1 Asphalt Maintenance Ltd. ("A-1") and The Guarantee Company of North America (the "GCNA") a bond company that paid out 20 lien claims and was subrogated to those rights under the Construction Lien Act ("CLA").
Urbancorp Inc., a large real estate development company involved in various projects in the Greater Toronto Area, became subject to proceedings under the Companies' Creditors Arrangement Act (the "CCAA") in April of 2016. Alan Saskin, Urbancorp's President and primary shareholder, filed a Notice of Intention to Make a Proposal (the "NOI") in his personal capacity under the Bankruptcy and Insolvency Act (the "BIA") shortly thereafter.
At just before 7.00am on Monday 15 January 2018 following an urgent telephone hearing, a High Court Judge agreed to place six of the Carillion Group companies into compulsory liquidation and appoint the Official Receiver as Liquidator. At the same time, six partners of PwC were appointed as Special Managers to assist the Liquidators.