To travel covertly out of the jurisdiction of the Courts. An absconding debtor is one who, with intent to defeat or delay his creditors, conceals or withdraws himself from within the relevant jurisdiction, or leaves or remains out of Canada.
Complete; perfect; final; without a condition or encumbrance; unconditional; e.g., absolute order of discharge
abstract of title
A chronological history of property showing the chain of title from its original grant to the present ownership
Any clause in a contract which spells out that when certain actions are taken or events occur, the clause comes into effect; e.g., the clause in a lease providing that, if the lessee goes into bankruptcy, three months rent is due as accelerated rent
The act of accepting something, usually a contract; e.g., an offer is made to a person that he can buy certain goods for a specified sum of money. If the person receiving the offer expresses an unqualified intention to accept it, the offer is considered to be accepted.
Goods that are installed in or affixed to other goods
An arrangement or engagement made as a favour to another, without consideration
act of bankruptcy
An act or event done or suffered by a debtor that is identified within six months as the grounds for a application by creditors, with provable claims of at least $1,000, for a bankruptcy order against the debtor’s estate
A proceeding in a court of law or otherwise by which one demands or enforces one’s rights
To suspend hearing of a case or a meeting of creditors to another time or place, or indefinitely
The date on which parties to a transaction make financial adjustments between themselves, usually for continuing expenses, e.g., property taxes
To manage or direct and otherwise distribute an estate to the persons who are legally entitled thereto
The person responsible for the administration of a Consumer Proposal under the Bankruptcy and Insolvency Act, e.g., a Trustee or other person designated by the Superintendent of Bankruptcy
A voluntary written statement sworn before a Notary Public or Commissioner of Oaths
The property of a bankrupt that was acquired after the date of his bankruptcy but before the date of his discharge
A person authorized to transact lawful acts or business for another, referred to as the principal. The principal is bound by the acts of his agent to the extent of the authority delegated, within which the agent is usually not personally liable.
agent – section 427 (agent – article 427) A person appointed by a bank that holds security under s. 427 of the Bank Act
To reduce to nothing; to make void; e.g., to annul the Order of Discharge or to annul a proposal
Preceding thing, event, or circumstance
An application or proceeding for review by a higher Court
The making of a request for something, e.g., an application to the Court for an Order discharging the bankrupt or Trustee
An application for an Order of the Court or for some judicial action; e.g., bankruptcy application for a bankruptcy order against a debtor
The act of designating or placing in office
Formal permission or sanction, e.g., Court approval
Things attached to real property or, by their nature, belonging with real property; e.g., an easement or a right-of-way
A dispute resolution mechanism whereby an independent neutral third party is appointed to hear and consider the merits of the dispute and who renders a final and binding decision, called an award
At a distance; not under the influence or control of another; not related by blood or marriage. Arm’s length may be defined by statute.
An agreement, such as a proposal, made between an insolvent person or bankrupt and his creditors
The valuing of a thing or property; the first stage of the insolvency process, providing for a financial appraisal interview, a description of statutory and non statutory options available to an individual debtor and, discussing and reviewing with that debtor the merits and the consequences of his choice
The assets represent the economic resources of the business, notably cash, accounts receivable, inventory, investments, and fixed assets, such as equipment, buildings, and land. The various asset items are divided into classes.
The main classes are:
- current assets;
- long-term investments;
- fixed assets; and,
- intangible assets.
The assets included in current assets consist of cash, accounts receivable, and inventory likely to be converted into cash within a short period, which normally does not exceed one year.
Long-term investments are items acquired for a term that is very likely to exceed one year, such as shares, bonds, debentures, and other investments of this kind.
Fixed assets include land, buildings, equipment and other relatively long-term assets, which are necessary to operate a business. Most fixed assets are depreciated as they are used. The resulting decrease in book value is called “depreciation”.
Intangible assets include such assets as patents, trademarks, and goodwill. These assets have no physical existence but have value because of the rights arising from their possession. This value usually corresponds to the cost absorbed by the business.
To give or to transfer a right or interest to another
assignment (in bankruptcy)
A transfer by an insolvent person to a Trustee of all his property for the general benefit of his creditors
assignment of book debts
A transfer to a creditor by a debtor of a general right to collect all debts, present and future, owing to the debtor, which can be specific or general
assignments and preferences acts
Provincial legislation to void gifts, conveyances, assignments, transfers, or other transactions, made by a person when insolvent or unable to pay his debts in full, or when he knows that he is on the eve of insolvency, with intent to defeat, hinder, delay or prejudice his creditors. Matters to be proved, timing and remedies may differ from federal insolvency legislation.
Satisfaction or reparation of a wrong or injury; to make up for errors or deficiencies
A remedy by which a plaintiff is able to seize or place under his control an asset, property or effects of the defendant for satisfaction of judgment
To turn over or entrust to another; e.g., rent. A lessee agrees to recognize a new party as lessor
A public sale in which articles are sold to the highest bidder
A person who, for remuneration, acts or assists any person to act, or represents to any person that he is acting on behalf of another person, in repossessing, seizing, or distraining upon any chattel, or in evicting any person from property
The balance sheet indicates the financial position of a corporation or an individual in business as at a specific date. Essentially, it includes three headings:
- liabilities; and
- shareholders’ equity (net worth or owner’s
equity in the case of an individual in business).
A balance sheet’s assets must always equal the liabilities plus the shareholders’ equity or owner’s equity.
A federal statute governing the establishment, administration and regulation of banks. Includes specific provisions for “Bank Act security.”
A natural person or corporation who has, or is deemed to have, made an assignment, or against whom a bankruptcy order has been made under the Bankruptcy and Insolvency Act; the legal status of such a natural person or corporation
All assets of the bankrupt which vest in the Trustee for the benefit of creditors
A legal process governed by the Bankruptcy and Insolvency Act; the state of being bankrupt or the fact of becoming bankrupt, voluntarily or involuntarily
Bankruptcy and Insolvency Act
The federal statute with respect to bankruptcy and insolvency
An Order made by the Court, upon the successful application of one or more unsecured creditors, ordering that a person be adjudged bankrupt, and appointing a Trustee who has consented to act as Trustee of the estate of the bankrupt
The right of one person to enjoy the use and advantage of another’s property
beneficiary – preferred
A parent, spouse, common-law spouse, child or grandchild of a person whose life is insured, designated as a beneficiary, thereby rendering the rights and interests of the insured in the insurance money exempt from execution or seizure
See Bankruptcy and Insolvency Act.
An offer, which may be withdrawn before acceptance, to buy a thing which is being sold at a stated price
bill of exchange
A written order by one person addressed to another person to pay a specified sum of money at a specific future date, or on demand
bill of lading
A document received by a transportation company acknowledging that it has received certain goods and, for the purpose of transportation, serves as title to that property
bill of sale
A sales agreement in writing, used in the sale of personal property
In good faith; genuine; without fraud or deceit
A written instrument with sureties, guaranteeing faithful performance of acts or duties contemplated
bond (in bond)
The state of being stored under the charge of customs officials until the importer pays duty
Accounts receivable; amounts due arising from the sale of inventory or services in the normal course of business; debts recorded in the books of a corporation; includes income tax refunds and insurance claim proceeds
borrowing (powers of)
The authority under which a Trustee or receiver can borrow money, usually limited
The action that a supplier of materials or labour can take, in respect of constructing, improving or repairing land or buildings, by filing an entitlement against that property for monies he is owed, under the provisions of provincial statutes
bulk sales acts
Provincial legislation to protect creditors, in situations where the assets of a company are sold in bulk. Certain provisions may apply to every sale in bulk except a sale in bulk by an executor, an administrator, a guardian of property, a creditor realizing upon security, a receiver, an assignee or Trustee for the benefit of creditors, a Trustee under the Bankruptcy and Insolvency Act, a liquidator or Official Receiver, or a public official acting under judicial process.
Business Corporations Acts
Federal and provincial legislation formerly called the Companies Act (in some jurisdictions still called the Companies Act); contains sections relating to liquidation and winding-up of companies incorporated under the particular Act
An overall review or assessment of the operations and management of a business, including the security position of the lenders, for the purpose of reporting to the management, owners, and creditors. The scope and purpose of the review are set out in the engagement letter.
C.B.R. – Canadian Bankruptcy Reports
See Canadian Bankruptcy Reports.
See Canadian Association of Insolvency and Restructuring Professionals.
Canada Business Corporations Act
The federal statute governing the incorporation, management, and liquidation of solvent companies, including the appointment and duties of receivers and receiver managers. Liquidation and dissolution provisions do not apply to a corporation that is insolvent or bankrupt within the meaning of the Bankruptcy and Insolvency Act.
Canada Customs and Revenue Agency
The agency created in 1999 to assume the mandate of Revenue Canada and to promote compliance with Canada’s tax, trade, and border legislation, and regulations through communication, quality service, and responsible enforcement. The agency is accountable to the Minister of National Revenue, Parliament, and the Canadian public for the delivery of tax, customs, and trade programs.
Canada Labour Code
The federal statute governing industrial relations, bargaining rights, health and safety, hours, wages, vacation, holidays, individual and group terminations, severance, garnishment, and related matters for “federal work, undertaking, or business”
Canada Pension Plan Act
The federal statute establishing a comprehensive program of old age pension and supplementary benefits in Canada payable to, and in respect of, contributors. Governs the collection of premiums, calculation, and payment of benefits.
Canada Student Loan Act
Federal statute governing the granting and collection of student loans and guarantees
Canadian Bankruptcy Reports
A report series of decided cases in Canadian Courts on bankruptcy and insolvency matters, and articles by insolvency authorities. The case reports are compiled in series, starting with the original noted as “C.B.R.”, the second, or New Series, noted as “C.B.R. (N.S.)”, the third series, noted as “C.B.R. (3rd )”, and the fourth series noted as “C.B.R. (4th)”. A citation will reference the volume, the series, and the page number.
Cheque that has been processed and paid by the bank on which it was drawn
carry on business
To operate, or continue the operations of, a business
That body of Court decisions that act as precedents in the interpretation of various statutes. In some situations, the rule is not in statute books but can be found as a principle of law established by a judge in a recorded case.
cash flow statement
The cash flow statement allows users of the financial statements to assess both the capacity of the business to generate cash flow and its cash flow requirements.
The cash flow statement presents the receipts and disbursements of the business for the fiscal year. They are consolidated under three different headings: operating activities, investment activities, and financing activities.
A warning; a notice that a particular party has a certain interest, and that certain actions are prohibited without advising the party giving notice. Normally filed against land titles, a caveat may only be valid for a limited time period in some jurisdictions
Let the buyer beware. The buyer must be cautious, as the risk is his and not that of the seller.
See Companies’ Creditors Arrangement Act.
See Canada Customs and Revenue Agency.
A condemnatory judgment; a reprimand from a superior; disapproval or blame; to criticize severely
certificate of indefeasible title
A certificate obtained from the land titles office indicating charges and encumbrances against a particular piece of property
Certificate of Pending Litigation
A notice, issued by a Court and registered in the land registry office, of the commencement of a proceeding in which an interest in land is at issue. See Lis Pendens
A cheque bearing a guarantee of payment by the bank on which the cheque is drawn
A copy of a document bearing an official seal or stamp of the person in possession of the original document, attesting that it is a true copy of the original document
Any person elected to take charge of, and control, a meeting
An encumbrance, lien, or financial obligation that is attached to property; e.g., a person who files a lien against a piece of property may be considered to have a charge against that property; a commission, expense, or cost.
Moveable property; any property other than freehold land
An instrument conveying conditional title to personal property in order to secure payment of a debt, or performance of a contract, normally taken as security by a person lending money or selling an asset. Any personal property that can be sold can be mortgaged. Chattel mortgages must be registered to be enforceable against third parties. See mortgage.
A writing that evidences both a monetary obligation and a security interest in, or a lease of, specific goods
chose in action
The right of property over intangible things which are not in one’s possession, but that are recoverable through legal or Court action, such as debts, insurance claims, shares in a company, pensions, and salaries
CIRP – Chartered Insolvency and Restructuring Professional
Chartered Insolvency and Restructuring Professional; the certification mark used by members of the Canadian Association of Insolvency and Restructuring Professionals in association with insolvency administration services, services of conducting business reviews, corporate restructuring services, services relating to the turnaround of under performing businesses, and related advisory services
The tradition of Civil Law is quite different from Common Law. It is based on Roman law, which was consolidated by the Roman Emperor Justinian. The law in ancient Rome was scattered about in many places: in books, in statutes, in proclamations. Justinian ordered his legal experts to put all the law into a single book to avoid confusion. Ever since, the Civil Law has been associated with a “civil code”, containing almost all private law. The Civil Code of Quebec was first enacted in 1866, before Confederation, and after periodic amendments, was revised. Like all civil codes, such as the Code Napoléon in France, it contains a comprehensive statement of rules, many of which are framed as broad, general principles so as to deal with any dispute that may arise. Unlike common-law Courts, Courts in a Civil-Law system first look to the Code, and then refer to previous decisions for consistency. See Common Law.
Any claim or liability provable by a creditor in proceedings under the Bankruptcy and Insolvency Act
The certificate issued by an official of a federal or provincial tax collection agency, prescribed by statute, advising that all taxes have been paid
Additional or confirming; e.g., collateral security; security pledged for the payment of a loan; in commercial transactions, property subject to a security interest
An agreement made by, or on behalf of, a trade union and an employer in relation to terms and conditions of employment, matters of discipline, and membership
A secret agreement and co-operation for a fraudulent or deceitful purpose to defraud another person of their rights
commissioner for oaths
A person authorized by provincial statute to administer oaths to persons making affidavits to be used in legal proceedings
A written order of a Court directing that someone be confined to prison, normally issued as a result of non-compliance with a previous Court Order
The Common Law, which developed in Great Britain after the Norman Conquest, was based on the decisions of judges in the royal Courts. It is called “judge-made” law because it is a system of rules based on “precedent” as opposed to statute law. Whenever a judge makes a decision that is to be legally enforced, this decision becomes a precedent: a rule that will guide judges in making subsequent decisions in similar cases. The Common Law is unique because it cannot be found in any “code” or “statute”; it exists only in past decisions. This, however, also makes it flexible and adaptable to changing circumstances. See Civil Law.
The Bankruptcy and Insolvency Act defines a Common-Law partner as an individual who is cohabitating with an individual in a conjugal relationship, having so cohabited for a period of at least one year. The definition and minimum period of cohabitation may differ in provincial statutes.
Companies’ Creditors Arrangement Act
The federal statute regulating commercial reorganizations, which facilitates compromises and arrangements between companies and their creditors; only invoked by companies having at least $5,000,000 in debt; alternative statute to the Bankruptcy and Insolvency Act
A federal and provincial statute, now called the Business Corporations Act in most provinces; contains sections relating to liquidation and winding-up of companies incorporated under the act
comparative financial statements
The presentation of comparative financial statements is a means of understanding an entity’s changes in financial position. Just as the balance sheet describes the assets, liabilities, and shareholders’ equity as at a given date, a comparative balance sheet shows the value of these items as at two or more dates. In this case, it is easier to determine the changes that have occurred, understand the reasons for the changes and draw the necessary conclusions. The same principle applies to the comparative earnings statements presented for several identical fiscal years and periods.
Based on the information provided in the financial statements and in the notes to the financial statements, several ratios can be calculated to assess the performance of a business.
To settle by mutual concession; an agreement between parties to settle matters in dispute between them
A contractual condition required to be met before a contract can be completed
Depending on the satisfactory completion or compliance with a restricting, limiting, or modifying circumstance; e.g., a bankrupt can be granted a conditional discharge, which specifies the conditions to be fulfilled before he can receive an absolute discharge
The sale of goods under which possession is delivered to the buyer, but where the title to the property in the goods does not vest in him until a subsequent event, normally upon payment of the whole or part of the price, or the performance of some other condition
conditional sale agreement
An agreement for sale of goods where transfer of title is delayed until stipulated conditions have been fulfilled, usually payment of the purchase price
conflict of interest
The circumstance of a person who finds that one of his activities, interests, etc. may have a contrary interest on another of his interests or activities
To comply with a specified use, particularly involving real estate zoning by-laws
Actions taken to preserve, keep intact, or unchanged
Under Common Law, one of the three criteria that must be met before a contract is binding; refers to money, or payment of money, or some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other
To deliver goods to custody or charge
Goods delivered to an agent (consignee) for sale, with title being held by the consignor until a sale is made
Combined; can relate to companies, statutes, debts, etc.
Order handed down by a provincial Court to combine the debts of an insolvent person, pursuant to Part X of the Bankruptcy and Insolvency Act – Orderly Payment of Debt Regulations
To compel or restrict a person, group, company, etc.
Goods that are used or acquired for use primarily for personal, family, or household purposes
A simplified form of proposal available to debtors owing less than an amount prescribed under the Bankruptcy and Insolvency Act
That fee which a person, often a lawyer, is entitled to, by agreement, upon the successful completion of an action. For example, a lawyer may take on an action for 25% of the proceeds, which he will only be entitled to if the action is successful.
Dependent upon other circumstances not yet certain. A contingent claim in a bankruptcy proceeding is one which has not yet accrued and which is dependent on some future event that may or may not occur.
The setting off of a mutual debt; opposite side of an account; e.g., to contra an account is to reduce it with reference to an equivalent amount in an opposite account
An oral or written agreement between two or more parties which is enforceable by law
A person contracting with, or employed directly by, an owner or his agent to do work upon, or to place or furnish materials, or to do both, on an improvement; does not include a workman employed by a contractor
The requirements as set out in a contract
The transfer of real or personal property from one person to another by writing or otherwise; includes a gift, encumbrance, or limitation of use
Includes any company or legal person incorporated, or authorized to carry on business, by or under an Act of Parliament of Canada, or of any of the provinces or territories, that has an office or property in Canada. The Bankruptcy and Insolvency Act specifically excludes building societies, incorporated banks to which the Bank Act applies, savings banks, insurance companies, trust companies, loan companies or railway companies.
Provincial legislation prescribing winding-up procedures of a solvent company
To assist and educate bankrupts and relatives of bankrupts, or consumer debtors, on good financial management, including prudent use of consumer credit and budgeting principles; to developing successful strategies for achieving financial goals and overcoming financial setbacks; and at any time, where appropriate, making referrals to deal with non-budgetary causes of insolvency; e.g.: gambling, addiction, marital and family problems, etc.
The Court having jurisdiction in bankruptcy or a Judge thereof, and includes a Registrar when exercising the powers of the Court conferred upon a Registrar under the Bankruptcy and Insolvency Act. The Supreme Court or Court of Queen’s Bench of the applicable provinces hear matters concerning bankruptcy and receivership.
An appointment sanctioned by the Court. Once a receiver, receiver manager or Trustee is appointed, he becomes an Officer of the Court. Court appointments usually result from an application to the Court requesting such appointment.
Instructions from the Court
Courts of Justice Acts
Provincial legislation governing the role of Courts and judges, and the rules for their conduct
An agreement (usually formal) between two or more persons to do or not to do something specific; to bind oneself to a contract
A person to whom money, goods or services is owed; in insolvency matters, a person having a claim, secured, preferred or unsecured, provable as a claim under the Bankruptcy and Insolvency Act
Creditors’ Relief Acts
Provincial legislation dealing with distribution of assets to creditors outside the Bankruptcy and Insolvency Act or the Companies’ Creditors Arrangement Act
The strategy, planning, and tasks associated with managing during financial or other crises. The development and implementation of a plan of corrective action for dealing with serious cash flow problems or other distress that threatens the survival of a business.
That point in time when a contract or agreement triggers certain clauses in that contract. For example, when a debtor defaults, the security holder is entitled to enforce the provisions in the agreement and appoint a receiver, resulting in the crystallization of a floating charge into a fixed charge.
The pecuniary satisfaction awarded in a civil action for the wrong suffered by the plaintiff
date of initial bankruptcy event
The earliest of the date of filing or making of (a) an assignment ; (b) a proposal; (c) a notice of intention to make a proposal; (d) the first application for a bankruptcy order
date of proposal
The date of the filing of the proposal with the Official Receiver, if no notice of intention was filed. Such date shall constitute the time for the determination of the claims of the creditors.
That which exists in fact (de facto) as opposed to that which exists by law (de jure); e.g., the Trustee remains de facto the Trustee of the estate for the performance of such duties as are incidental to the full administration of the estate, notwithstanding his discharge.
According to law. See de facto.
A written security instrument evidencing a debt due from one party to another, payable on demand or otherwise, which can be a fixed or floating charge on assets and which can grant the lender broad powers to recover the amount due upon default, including the appointment of a receiver or receiver manager. Debentures must be registered to establish priority against third parties.
debenture – fixed
A form of security placing a charge on an asset or assets adequately described and identifiable
debenture – floating
A form of security placing a charge on an asset or assets which are not specifically identified and described in the debenture document; the charge, when created, does not attach to the assets until default in payment occurs and the security is crystallized; used for assets such as inventory
Money, goods, or services owing from one person to another; a liability; a legal obligation
A person who owes money, goods or services to another; an insolvent person who is not bankrupt
See statutory declaration.
The final and conclusive Court Order for dissolution of marriage after the condition of a decree nisi is met. See decree nisi.
A provisional decision of the Court that does not have absolute effect until certain conditions are met. See decree absolute.
A document executed under seal and delivered to effect a conveyance, usually of real estate
Shall be adjudged, usually by statute or by Court; e.g., deemed trust funds
A trust that is established by statute for certain claims, and deemed to be in effect even though there may not be any actual assets or monies held in that trust. For example, the provisions of the Income Tax Act create a deemed trust for employee source deductions. The amounts deducted are deemed to be held in trust for the Crown, whether or not the funds have been kept separate and apart from the property of the employer, and notwithstanding any security interest in the property or proceeds thereof. The proceeds are to be paid to the Crown in priority to all security interests.
Misappropriation of money held by an employee, official, Trustee, or other fiduciary; embezzlement
Failure to pay or otherwise perform obligations under a contract; the occurrence of any event whereupon, under the terms of the security agreement, the security becomes enforceable
Judgment given against a party by reason of nonappearance in Court on an assigned day
To postpone to a future time
To ask for with authority; claim as a right; a request for payment required to be made by the debtor prior to enforcing security
A letter that makes a demand for payment or some other action which is in default
Persons elected by the shareholders of a corporation to manage or supervise the management of the affairs and business of the company
The liability of the directors of a company to the shareholders and others for negligence, fraud, or acts committed outside the scope of their authority
To refuse or to set aside. For example, the Trustee in Bankruptcy, under the Bankruptcy and Insolvency Act, can disallow a claim submitted by a creditor.
To cancel or relieve a person of an obligation or responsibility; may be absolute, suspended, or conditional
The act of renouncing; repudiating or denying an interest on, or in connection with, something; often used by the Trustee in Bankruptcy to disclaim any rights or obligations under a lease or to disclaim interest in property of the bankrupt
The power, or right, to seize goods or chattels of the lessee found on the premises and sell them to recover arrears of rent; e.g., a lessor has a right to distrain for unpaid rent, subject to statutory limitations
The process whereby the Trustee disburses the proceeds from the estate, pursuant to the scheme of distribution in the Bankruptcy and Insolvency Act
The proportion of a creditor’s debt payable on the division of a bankrupt’s estate by the Trustee to creditors who have proven claims in a bankrupt estate
The repayment of duties charged on goods after exportation
A hardship which is threatened and impending as a means of coercing a person to perform some act
Moral or legal obligations. The duties of a Trustee are set out in sections 16 to 29 of the Bankruptcy and Insolvency Act. The duties imposed upon a bankrupt are set out in sections 158 to 160. Certain specific duties of a receiver and receiver manager are set out in Part XI of the Bankruptcy and Insolvency Act, and the applicable federal or provincial Business Corporations Acts or Companies Acts.
The earnings statement presents the revenues and expenditures of the corporation or the individual in business for a given period, usually one year. Net income as opposed to a loss will be realized when the revenues exceed the expenditures. The net income is often considered to be a measurement of the economic performance of the business.
A right held by one person to make use of the land of another for a limited purpose; e.g., a right of way
Goods and chattels; property
Flowing out; e.g., an effluxion of funds
Employment Insurance Act
The federal statute governing the determination of employment insurance premiums, collection and remittance of premiums, benefits and payment of benefits; establishes deemed trust over premiums not remitted
employment standards acts
Provincial legislation governing employment issues such as industrial relations, bargaining rights, health and safety, hours, wages, vacation, holidays, individual and group terminations, severance, garnishment, and related matters for work done in, or for, provinces
A claim on property or chattels, usually a registered charge held by a secured creditor
The placing of one’s signature, instructions, etc. on a document
To give force to; to carry out effectively; to cause obedience to an act, statute, or Court Order
To mention separately or specify; as in a list
environmental protection acts
Provincial legislation for the protection and conservation of the natural environment; deals with liability for clean-up costs
The excess of the market value of an asset over any secured indebtedness against that asset. See shareholders’ equity.
A writing, deed, or deposit delivered by one person into the hands of another party to be held in trust by the latter until the occurrence of a contingency or performance of a condition
Possessions, property. See bankrupt estate.
A lawyer retained or hired to represent the Trustee of a bankrupt estate
A person’s own acts, statement of facts, or acceptance of facts which preclude his making claims later to the contrary
By or for one party; done on behalf of, or upon the application of, one party only without notice to the adversary, often when urgent action is required, as when the debtor is thought to be absconding assets
examination (of a bankrupt)
The questions put to the bankrupt by the Official Receiver, Trustee, or other interested person as to his property and affairs
examination for discovery
A legal proceeding whereby one party to a legal action has the opportunity to be informed as to the facts, and to obtain admissions from another party under oath
Excise Tax Act
The federal statute governing the amount, collection, and remittance of excise taxes including the Goods and Services Tax; establishes a deemed trust for amounts to be remitted
An officer of a county or district whose principal duties are to aid criminal and civil Courts. He serves, processes, summons, executes judgments, and holds judicial sales. Includes bailiff and any officer charged with the execution of a writ or other process with respect to any property of a debtor
The process under which a judgment is collected, includes a writ of seizure and sale
A contract which is still to be executed or completed
Any asset owned by the bankrupt which is exempt from execution, garnishment, or seizure, under federal or provincial legislation, and does not vest in the Trustee in Bankruptcy for the benefit of creditors
Provincial legislation identifying chattels exempt from seizure
Those items which cannot be legally seized by any execution creditor to enforce a debt, or by a Trustee in Bankruptcy. See exempt asset.
Assets which can be seized by creditors, or a Trustee, on behalf of creditors. See exempt asset.
To strike out; to obliterate, erase, or mark for deletion
fair market value
The hypothetical value of an asset, given a willing purchaser and a willing vendor, and a reasonable amount of time for the property to be exposed for sale, and no unusual circumstances, such as liquidation
family law acts
Provincial legislation governing the orderly and equitable settlement of the affairs of spouses upon breakdown of the partnership, and providing for other mutual obligations in family relationships, including the equitable sharing by parents of responsibility for their children
Farm Debt Mediation Act
The federal statute enacted in 1998 to provide for mediation between insolvent commercial farmers and their creditors; to amend the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Farm Debt Review Act
A company incorporated under a federal statute
Title of ownership in land, without limitation
Relating to, or involving, a confidence or trust; a person holding the character of a Trustee in respect to the trust and confidence involved in it, and the scrupulous good faith and candour which it requires
The last distribution by the Trustee to the creditors of an estate. See distribution and dividend.
Analysis of the financial statements explains the results achieved, among other matters. Many users of the financial statements, particularly the directors, the investors, and especially the creditors, are interested in finding out more. Through financial analysis, they seek to determine a given entity’s financial position and study certain aspects that take on particular importance, depending on their interest. For example, creditors will be more interested in solvency, while investors will look at the profit history and outlook.
Institutions that accept deposits, lend money, and provide other financial services. They include banks, which are federally regulated, and trust companies, credit unions/caisses populaires, insurance companies, and mortgage corporations, which are provincially regulated.
See business review
A form prescribed under the Personal Property Security Act setting out essential information, such as the name of the debtor and the collateral. The secured party must file the financing statement at the Personal Property Registry to perfect a security interest by registration.
first meeting (of creditors)
Meeting required to be called by the Trustee to consider the affairs of the bankrupt, or the proposal filed by a debtor, to affirm the appointment of the Trustee, to appoint inspectors, and to give such directions to the Trustee as the creditors may see fit
A security interest that charges specific property
Those assets that are attached to, or are part of, a building, or are fixed to land. See leasehold improvements.
A security interest that charges the debtor’s property but does not attach to any specific item, until some event occurs which causes it to crystallize into a specific charge. The charge hovers over the property and the debtor is entitled to deal with the property in the normal course of business, until default occurs and the creditor takes action to enforce the security and convert the floating charge into a fixed charge.
A legal proceeding commenced after a mortgage is in default, permitting the mortgagee to seize and sell the property to satisfy the debt. This remedy forecloses the mortgagor’s right of redemption, the rights of subsequent creditors from enforcing security interests, and the rights of the mortgagee to pursue any deficiency realized upon sale of the property.
Lost or given up in consequence of fault, breach of promise, inability or neglect to meet stipulated conditions of an agreement
A Trustee who has been substituted by another Trustee under the Bankruptcy and Insolvency Act
Deceit, trickery; a deliberate act of deception or misrepresentation with intent to deprive another of property or a right, or in some manner to do him injury; an intentional perversion of the truth
Fraudulent Conveyances Acts
Provincial legislation ensuring that every conveyance of real property or personal property and every bond, suit, judgment and execution made with intent to defeat, hinder, delay, or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties, or forfeitures are void as against such persons. The proof criteria and remedies may differ from similar provisions in federal insolvency statutes.
The preferring by a debtor of one creditor over others. Remedies exist under various federal and provincial statutes.
Of little or no worth or importance; not worthy of serious notice; characterized by lack of seriousness or sense as in a frivolous defence or action
Revealing all and every fact or circumstance surrounding a given matter
Goods which are comprised of many identical parts and can be estimated by weight, number, or measure. For example, a bushel of grain, a barrel of apples, and a barrel of oil are fungibles.
To attach property, monies, earnings, or receivables belonging to a debtor while in the hands of a third party; can be accomplished with a Garnishee Order issued by the Court or by the Canada Customs and Revenue Agency, without a Court Order
Official government (provincial and federal) publication in which public notices and statutory regulations are advertised. Published by the Queen’s Printer
To increase by subsequent bidding, with the effect of nullifying any previous offer
general benefit of creditors
For the overall good of all creditors; an insolvent person makes an assignment of all his property for the general benefit of creditors pursuant to the Bankruptcy and Insolvency Act
The General Rules under the Bankruptcy and Insolvency Act
general security agreement
A contract under which all the personal property of a debtor is pledged as security to a lender
Done honestly; without intent to deceive
An intangible, saleable asset arising from the reputation of a business and its relation with its customers, distinct from the value of its stock and other tangible assets
A promise to perform some duty or contract, or payment of some debt, in case of failure by another person
One who is answerable and financially responsible on behalf of someone else, who is primarily responsible. After paying a debt, the guarantor can become the legally recognized creditor.
A trial of an action before a judge
The prescribed percentage of the value of the services or materials supplied under a contract or subcontract required under the provisions of provincial Construction Lien Acts to be withheld from payment, until all liens that may be claimed against the holdback have expired, been satisfied, discharged, or provided for
A hypothec is a real right on a moveable or immoveable property made liable for the performance of an obligation. It confers on the creditor the right to follow the property into whosever hands it may be, to take possession of it or to take it in payment, or to sell it or cause it to be sold and, in that case, to have a preference upon the proceeds of the sale ranking as determined in the civil code.
To mortgage or pledge without delivery of title or possession.
Lands and any constructions and works of a permanent nature located thereon and forming an integral part thereof, are immovables.
A thing or property which cannot be moved, such as land, trees, and buildings
Destitute; the opposite of moneyed (pecunious). See pecuniary.
Income Tax Act
The federal statute governing tax payable by persons resident in Canada. It creates a super priority for certain crown claims, liability for third party beneficiaries of settlements of property by insolvent debtors, and directors’ liability for unremitted taxes.
A right or a title in property that cannot be made void or cancelled by any past event, error, or omission in the title
A commitment given by one person to compensate any loss another may incur; e.g., a secured creditor may give an indemnity to a receiver manager
Any deed, written contract, or sealed agreement. An Assignment for the General Benefit of Creditors is an indenture.
A mandatory or prohibitive Order or Judgment issued by a Court
The inability to pay debts as they become due, in the usual course; or, having liabilities in excess of a reasonable market value of assets held. It is not synonymous with bankruptcy
A person who is not bankrupt and whose liabilities exceed his assets and/or ability to pay. The Bankruptcy and Insolvency Act defines an insolvent person as – “a person who is not bankrupt and who resides, carries on business, or has property in Canada and whose liabilities to creditors provable as claims under this Act amount to $1,000.00 and,
who is, for any reason, unable to meet his obligations as they generally become due,
who has ceased paying his current obligations in the ordinary course of business as they generally become due, or
the aggregate of whose property is not, at a fair valuation, sufficient or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due”.
A creditor or creditor representative appointed to participate in insolvency proceedings. The method of appointment and the duties of inspectors differ depending on whether the appointment is pursuant to the Bankruptcy and Insolvency Act, Companies’ Creditors Arrangement Act, or Winding-up and Restructuring Act.
Under the BIA, an inspector is a person appointed by creditors at the first or subsequent meeting of creditors, to act as a member of a committee of inspectors, to supervise and give direction to the Trustee with respect to the administration of the estate of the bankrupt, or pursuant to the provisions of a proposal.
A formal document with legal consequences; e.g., a debenture, mortgage, chattel mortgage
A long-term or non-current asset that lacks physical substance, but which confers valuable rights or privileges upon the holders; e.g., patents, goodwill
A dividend paid to creditors before the administration of the estate of the bankrupt has been finalized; any dividend that is not a final dividend See dividend and final dividend.
A temporary Court Order intended to be of limited duration, usually until the Court has had an opportunity of hearing the full case and the opportunity of making a Final Order
A licensed Trustee appointed by the Court to protect the debtor’s property and the interests of creditors during the period insolvency proceedings are pending, and the rights of creditors are stayed. An interim receiver may be appointed during the period between the filing of a application for a Bankruptcy order and the time when the Bankruptcy order is issued, when a secured creditor is about to send, or has sent, a notice of intention to enforce a security under the Bankruptcy and Insolvency Act, or the debtor has filed a notice of intention to make a proposal, or has filed a proposal.
international law/law of nations
The body of rules designed to govern the conduct of nations toward one another. It includes the enactments contained in treaties and conventions.
A lawsuit pleaded between two parties to determine a right to property held by a disinterested third party (a stakeholder) who is in doubt about which claimant should have the property
A detailed listing and description of all the property of the debtor; merchandise or supplies on hand, or in transit at a particular point in time. The inventory of a manufacturing company includes raw materials, work-in-process, and finished goods.
An itemized bill prepared by a seller of goods and services and submitted to the buyer, describing goods purchased or services provided, quantities, prices, and credit terms. An invoice is a bill of sale.
“By the fact itself”. The logical or practical necessity by which one thing follows from another.
joint and several liability
The liability of more than one person may be enforced against them all by a joint action or against any one of them by an individual action
Ownership of a property by two or more persons who have identical interests in the whole of the property, with a right of survivorship. See tenancy in common.
A formal decision given by a Court; sentence or Order of a Court of Justice
A creditor that is entitled to enforce execution under a judgment
A person against whom a judgment ordering him to pay a sum of money stands unsatisfied, and who is liable to have his property taken in execution under the judgment
A Ministry of the federal government, whose mission is to: support the Minister of Justice in working to ensure that Canada is a just and lawabiding society with an accessible, efficient, and fair system of justice; provide high-quality legal services and counsel to the government and to client departments and agencies; and, promote respect for rights and freedoms, the law, and the Constitution
labour relations acts
Provincial legislation to facilitate collective bargaining between employers and trade unions and deal with workplace issues such as flexibility, productivity, and employee involvement in the workplace; encourage communication between employers and employees in the workplace; recognize the importance of economic growth as the foundation for mutually beneficial relations amongst employers, employees, and trade unions, etc
A legal doctrine whereby unreasonable delay or negligence in pursuing a right or claim may disentitle a claimant to relief. If you claim that a person’s legal suit against you is not valid for this reason, you would claim “estoppel by laches”.
land registry office
Registry office of the land registration districts in which title documents are maintained. See land titles office.
land titles office
The registry office for land which falls under the land titles system. Unlike the registry system, which simply provides a repository for title documents, the land titles system provides some assurance of the validity of ownership.
landlord and tenant acts
Provincial legislation governing the relationship between lessors and lessees
lease – closed end
A lease that does not impose any obligations, on either lessee or lessor, to buy or sell goods at a predetermined amount at lease termination
lease – open end
A lease that may (1) impose obligations on lessor to sell goods at lease termination to the lessee at a predetermined price or (2) may provide that any loss or gain from a predetermined amount shall be for the lessee’s account
Assets which have been caused or paid for by the lessee that are physically attached to or form part of the property being leased. A number of factors determine whether or not they may be removed at the termination of the lease. See fixtures.
The control of habitation or use of a property for a definite period of time
Leasing is a contract by which a person puts movable property at the disposal of another person for a fixed term and in return for payment.
leave of the Court
Permission of the Court. Leave of the Supreme Court of the province must be obtained before an action can be commenced or continued against a bankrupt, a Trustee or a company in receivership (if the receiver manager is Court-appointed).
To impose or collect by legal authority; an assessment imposed by the Superintendent of Bankruptcy, to assist with the costs of his office in the administration of the Bankruptcy and Insolvency Act, on all distributions made by the Trustee to creditors on their claims, except the costs of the first execution creditor. The rate of levy payable in a bankruptcy or in a proposal is prescribed by the Act.
Liabilities represent the obligations incumbent on the business. Liabilities include the debts the business has contracted with its creditors, including the amounts owed for goods sold to it, taxes payable, salaries payable, and mortgage-backed liabilities. Liabilities can be divided into two classes, current liabilities and long-term liabilities.
Current liabilities include debts maturing within one year, as in the case of current assets. The line of credit, notes payable, accounts payable and income taxes payable are all current liabilities.
Long-term liabilities consist of debts maturing in more than one year, such as mortgages and other long-term loans.
Licensed Insolvency Trustee
A person who is licensed or appointed under the Bankruptcy and Insolvency Act to administer a bankrupt estate or a proposal
A right to enforce a claim upon, or retain possession of, a debtor’s asset until the claim is satisfied, usually arising by operation of law rather than express contract between the parties
Compensation for non-performance or loss
A person appointed by a resolution of shareholders or by the Court to conduct the winding-up of a company
Litigation or a pending lawsuit involving real property. A Lis Pendens is registered against real property to give notice of the pending litigation affecting an interest in the property. Until the Lis Pendens is removed, either voluntarily or through a Court determination of the litigation, no one can receive clear title. See certificate of pending litigation
The act or process of settling a dispute before the Court; a lawsuit
locality of debtor
The principal place where the debtor has carried on business or resided, during the year immediately preceding his bankruptcy, or where the greater portion of the property of the debtor is situated
The federal registry for registering title documents against ships
marshalling of assets
An equitable doctrine whereby a secured creditor who has recourse against two funds to satisfy his claim, and another secured creditor has recourse against only one of the funds, the creditor with two funds will be compelled to resort to the second fund to the extent of assets available. If the creditor with two funds disposes of the common security, the creditor with only one fund will have recourse against the second fund to the extent that the creditor with two funds has drawn on the common fund.
The house in which the debtor and his spouse jointly made their home, and which is owned by one or the other, or both
See builder’s lien and repairer’s lien
Mechanics Lien Acts
Provincial legislation establishing the rights to lien claims and the administration and enforcement of such claims
A form of alternative dispute resolution (ADR), mediation involves the appointment of a mediator who acts as a facilitator assisting the parties in negotiating a settlement. The mediator does not adjudicate the issues in dispute or force a compromise. Compare with arbitration. See mediator (consumer bankruptcy).
mediator (consumer bankruptcy)
Mediation within bankruptcy proceedings was introduced in 1998. There are two opportunities to provide for mediation. The first is to attempt to achieve an agreement between a bankrupt and an opposing party on the amount of surplus income to be contributed by a bankrupt to his estate during the bankruptcy. The second is to reach an agreement on the terms of a bankrupt’s discharge before involving the Court in an adversarial proceeding.
A document for purposes of registration
misappropriation of funds
The action of a person to whom funds are entrusted when those funds are used wrongfully, dishonestly, or without proper authorization
To describe or present incorrectly, improperly, or falsely
A person appointed to review and report on, without controlling or approving, the day-to-day transactions of a business. Particulars of the engagement are set out in an exchange of letters, an agreement, or Court Order.
The instrument whereby land or a chattel is in any manner conveyed, assigned, pledged, or charged as security for the payment of money or monies which will be reconveyed, reassigned, or released on satisfaction of the debt. Mortgage does not include an agreement for sale, a right to purchase land, or an interest in land. The person who mortgages his property is called the mortgagor. The person to whom the mortgage is given is the mortgagee. See chattel mortgage.
Provincial legislation dealing with the rights of mortgagors and mortgagees
Things which can be moved either by themselves or by an extrinsic force are moveables. By default, a property is moveable
Equally applicable, with the necessary changes
Goods required by the usual mode of living, not restricted to things that are solely requisite for bare subsistence. It is a relative term and must be applied to the circumstances and conditions of the parties.
The failure to exercise the standard of care that a reasonable person should, by law, have exercised in the circumstances; the doing of something which a reasonable and prudent person would not do
A public officer or other person authorized to authenticate contracts, acknowledge deeds, take affidavits, take depositions, etc., in another province, territory or country
A formal notification served on any party pursuant to a process of law of some fact, intention or demand
notice of intention to enforce security
The statutory notice required by the Bankruptcy and Insolvency Act to be sent by a secured creditor toan insolvent debtor ten days before the security agreement can be enforced and any of the debtors’ assets seized
notice of intention to file a proposal
The legal document filed with the Official Receiver that provides an insolvent debtor protection from his creditors, and begins the process under the Bankruptcy and Insolvency Act whereby the debtor makes a proposal to his creditors or becomes bankrupt
null and void
Without force or effect
The executing officer’s return on a writ of execution when he is unable to locate assets on which to levy distress
nunc pro tunc
“Now instead of then.” It refers to the doing of something late, with the same legal effect from an earlier date.
Bankruptcy offences and sanctions are set out in Part VIII, sections 198 to 208, of the Bankruptcy and Insolvency Act. The offences are criminal or quasicriminal and any person guilty of an offence is liable to a fine or imprisonment.
A person who offers goods, services, etc., for sale or hire
officers (of a company)
Officials of a corporation appointed by the Board of Directors to manage the day-to-day affairs of the company; e.g., President, Vice-President, Secretary, Treasurer, etc.
A person appointed by the Governor in Council and deemed to be an officer of the Court, who reports to the Superintendent of Bankruptcy on the estates originating in his division, and performs statutory duties as specified by the Bankruptcy and Insolvency Act. See senior bankruptcy analyst.
Formal statement by an expert on what he holds to be fact; professional advice
A command of a Court or Judge
A judgment or decree that is free from restriction or limitation. See absolute.
A judgment or decree that will become final on a particular date unless set aside or invalidated by certain specified contingencies. In mortgage foreclosure actions, it is the order of the Court that accelerates the amount due under the mortgage document.
order of sale
The legal status pursuant to a Court Order whereby a person can obtain the authority to arrange a sale, subject to Court approval, with the sale proceeds being available to satisfy valid encumbrances
orderly payment of debts
A procedure governed by a provincial Court to allow a person to pay his debts in accordance with Part X of the Bankruptcy and Insolvency Act. The regulations are not in force in all provinces or territories
A general creditor with no security or priority ranking under the Bankruptcy and Insolvency Act
A resolution carried by the majority of votes, counting one vote for each dollar of every claim of the creditor that is not disallowed. See special resolution.
Upset or change around; e.g., if certain security is proven to be invalid
Equitably, without unfair preference; when several persons are paid at the same level or out of a common fund; all ordinary unsecured claims provable in bankruptcy are to be paid rateably
Not total or general; a release over a specified portion of an obligation; e.g., partial release of mortgage or debt
The dividing of real estate held in joint tenancy or in common
Consisting of, pertaining to or involving money. See impecunious.
pension benefits acts
Provincial legislation dealing with the establishment, administration, and winding-up of pension plans
The requirement necessary before a security interest attaches; achieved either by taking physical possession of the collateral or by proper registration of the security document, as prescribed by the provincial Personal Property Security Acts
Something of value held by a third party against the risk of non-performance of an obligation by the owner, contractor, sub-contractor, or material man
Includes a human being (natural person), a partnership, an unincorporated association, a corporation or legal person (artificial person), a cooperative society or organization, and the heirs, executors, administrators, or other legal representatives of a person
Property that is not real property; things moveable, also known as chattels
Personal Property Security Acts
Legislation in force in most Common Law provinces providing a central registry for filing notices of security interests in personal property. The system requires a person to register his interest in the property of another before the security is enforceable against third parties. Searches can be conducted in the registry by a lender when considering taking security on various assets, or by a person contemplating the purchase of an item, to ensure that the assets are free and clear of any prior encumbrances.
A person who initiates a case in Court; may also be referred to as the Claimant, Petitioner or Applicant; the person who is being sued is generally called the Defendant or Respondent
A charge for an unpaid debt, enforced by having physical custody of the asset to which the lien applies
To affix a notice to a post, wall or the like; to supply or put up; e.g., post a notice or a bond
To place after in order of importance; to put off to a later time
power of attorney
A document or authority given to another to act as one’s agent or attorney, setting out exactly and explicitly what the agent or attorney has power to do. The party authorized to act is called the attorney of the party giving the authority.
power of sale
The right to sell land when a mortgage is in default
See Personal Property Security Act.
An original writ commanding the defendant to do the thing required; also an order addressed to the Clerk of the Court requesting him to issue a particular writ
That body of Court decisions that act as guidelines in the interpretation of various statutes. In some cases, the rule is not in statute books but can be found as a principle of law established by a judge in some recorded case.
The payment of money, granting of security, or other arrangement by an insolvent debtor that benefits one or more of his creditors to the detriment of his other creditors
The claims entitled to rank in priority to ordinary unsecured creditors according to the ranking set out in section 136(1) of the Bankruptcy and Insolvency Act
A loss, injury, or unfavourable condition resulting from some judgment, action, or opinion
preliminary report to the creditors
The report required to be presented by the Trustee at the first meeting of creditors on his findings with respect to the debtor’s records, assets, conservatory and protective measures taken, provable claims against the estate, legal proceedings, reviewable transactions, preference payments, conflicts of interest, fee guarantees or deposits, anticipated realization, projected distribution, and any other relevant matters
“On the face of it”or “at first sight.” Evidence that is assumed to be true on first examination, unless disproved by other evidence
The order in which the claims provable under the Bankruptcy and Insolvency Act will rank for payment from the proceeds of realization of the assets which come into the possession of the Trustee, free from any encumbrance
A federal statute extending the present laws of Canada that protect the privacy of individuals and provide individuals with a right of access to personal information about themselves
Something done or given without charge; pro bono work would be giving services free of charge for the benefit of those unable to afford it
Proportionately; according to a rate or proportion
A signed document containing a promise to pay a stated sum to a specified person or to a bearer at a specified time, or on demand
property (real or personal)
Includes money, goods, things in action, land, and every description of property, real or personal, moveable or immoveable, legal or equitable, and whether situated in Canada or elsewhere, and includes obligations, easements, and every description of estate, interest and profit, present or future, vested or contingent, in, arising out of, or incident to property. See personal property.
A claim for return of the property of a third party in the possession of the bankrupt at the date of bankruptcy
An offer to creditors to settle one’s debts under other than the existing terms. May be an informal contractual arrangement, or a formal proposal under a federal statute, the Bankruptcy and Insolvency Act, Companies’ Creditors Arrangement Act, Windingup and Restructuring Act
Any claim or liability provable in proceedings under the Bankruptcy and Insolvency Act by a creditor
A claim that has been filed in the proper manner with evidence to prove what is owed and accepted by the Trustee in Bankruptcy and used as the basis for the payment of dividends when there are monies available for distribution
proxy (general and limited)
A document executed by a creditor authorizing another person to attend meetings of creditors and vote on his behalf. A proxy is also the person exercising the vote. If a proxy is given for a limited purpose, the holder of the proxy cannot exceed or alter the powers given by the proxy.
A publicly owned supplier of fuel, water, electricity, telecommunications, garbage collection, pollution control, or other services
purchase money security interest
A superior type of security interest under most provincial Personal Property Security Acts whereby a lender who provides the funds to finance the purchase of an asset obtains the first secured charge on the asset. Does not include a transaction of sale by, and leaseback to, the seller. Colloquially referred to as a “pimsy” (PMSI).
A deed which conveys only the interest which the grantor has in real property; no warranty of title is given; often given by one whose title may be defective
The number of members in a group required to be present (in person or by proxy) before business can be transacted. At a meeting of creditors, a quorum is constituted by one creditor who has filed a provable claim with the Trustee prior to the meeting, and is entitled to vote.
The Register of Personal and Movable Real Rights is the equivalent of the Personal Property Security Acts (PPSA) in the provinces other than Quebec. The registration allows the rights registered thereon to be enforceable against third parties.
Having a rightful place on the list of claims for a bankrupt estate
Amount achieved from the sale of assets
A person appointed privately under an instrument or by Order of the Court for a specific purpose, usually to seize and sell the property of the debtor. Unlike a receiver manager, a receiver cannot carry on the business of a debtor after his appointment. A receiver is also defined in Part XI of the Bankruptcy and Insolvency Act as a person who has been appointed to take, or has taken, possession or control pursuant to a security agreement, or Court Order, of all or substantially all of the inventory, accounts receivable, or other property of an insolvent person or bankrupt used in relation to his business. Receivers have various duties and responsibilities under the Act. See receiver manager.
A person appointed by a secured creditor pursuant to a security agreement, instrument, or debenture that is in default. The receiver manager takes control of the assets covered by the security and may have certain rights to manage the business of the debtor in order to realize the security. A receiver manager can also be appointed by an Order of the Court with specific duties and powers as contained in the Order. See receiver.
receiver of rents
Court appointed; normally appointed by a person holding a charge on the property; acts in accordance with the direction of the Court and does not pay any surplus from the estate to the holder of the charge, unless directed by the Court
Certificates given by a receiver, or receiver manager, as security for borrowings; normally a first charge on any assets under the control of the receiver, ranking ahead of any prior secured charges
The act of recovering something pledged or mortgaged; especially after proceedings have been commenced by the mortgagee
Officer of the Supreme Court of a province appointed by the Chief Justice of the Court for the transaction and disposal of matters as specified by the Bankruptcy and Insolvency Act. Powers include settling and signing Orders, hearing unopposed discharge applications, taxing of fees, the summoning and examining of a bankrupt, substituting for the Official Receiver in case of absence or illness, and the referral of matters to a Judge
registrar of companies
A person duly authorized by the provincial government to maintain the records of all incorporated bodies
A term defined under the Bankruptcy and Insolvency Act, which may differ from that of other statutes. Under the Act, persons are considered to be related to each other, if they are connected by blood relationship, marriage, common-law partnership, or adoption and shall be deemed not to deal with each other at arm’s length while so related
To surrender; release from obligation
The compensation allowed a Trustee for supervision, safekeeping, responsibility, and the care, pain, time and trouble connected with the administration of the estate
A mechanic or other person who, by bestowing money, skills or material on any chattel, is entitled to a lien on the chattel, which empowers that person to sell the chattel if he is not paid within a prescribed period of time. In some jurisdictions, a repairer’s lien is a security interest arising for unpaid repairs to a vehicle. See mechanic’s lien.
An action to recover possession of goods or chattels wrongfully seized or detained, upon giving security to prosecute the action against the person that distrained
An implication or statement of fact to which legal liability may attach, if material
A matter which has already been conclusively decided by a Court
See ordinary resolution and special resolution.
Registered Education Savings Plan
The party who responds to a claim filed in Court against him by a plaintiff or the person who is being sued; another term for the respondent is the defendant. See plaintiff.
retail/sales tax acts
Provincial legislation governing the amount, collection, and remittance of retail sales taxes. May establish deemed trusts or provide for security over funds collected.
A fee paid or monies lodged with a professional person for the right to his services, if required
A thing of value to which one has a right or expects to succeed to when relinquished by another, normally by the death of that party
A transaction other than at arm’s length that by statute may be reviewed to determine value for consideration
To take back or withdraw; cancel or reverse; rescind or repeal
Registered Home Ownership Savings Plan
Registered charge against real property to secure a right of passage; e.g., for hydro or telephone lines
Registered Retirement Savings Plan
sale in bulk
A sale, transfer, conveyance, barter, or exchange of part of the stock, or substantially the entire stock, of the vendor out of the usual course of business; a sale, transfer, conveyance, barter, or exchange of an interest in the business of the vendor. Most provinces have legislation to limit bulk sale transactions.
To discharge fully a debt, obligation, etc. by payment in full, or by an agreement if settled for less than the full amount due
To indemnify someone from monetary loss
A mark or symbol attached to a legal document used as attestation or evidence of authenticity
To look at or examine records, documents, etc. for information; e.g., to search the title of real property or security interests in personal property
A person holding a mortgage, hypothec, pledge, charge, lien, or privilege on or against the property of the debtor, or any part thereof, as security for a debt due or accruing due to him from the debtor
A verbal or written agreement between a secured party and a debtor giving the secured party a security interest in personal property. A written agreement is not necessary if the secured party is in possession of the collateral.
Something given or deposited as a pledge for the fulfilment of an undertaking or for the payment of a loan, to be forfeited in the case of a failure
Taking possession of an item, property, or person legally or by force
senior bankruptcy analyst
A representative of the Superintendent of Bankruptcy designated to supervise the administration of estates, and to perform other duties, as specified by the Office of the Superintendent of Bankruptcy. May or may not be an Official Receiver. See Official Receiver.
The act of making legal delivery of a process or writ upon a person
To have declared invalid; annul; e.g., to set aside a judgment
A contract, covenant, transfer, gift, or designation of beneficiary in an insurance contract, to the extent that it is gratuitous or made for merely nominal consideration
In the case of a body corporate, the appropriate term is shareholders’ equity. In the case of an individual in business, we will call this item owner’s equity or net worth. In the case of a sole proprietorship, that is, a business operated by one person, the income realized increases the net worth, while any drawings reduce it. If the business belongs to two or more persons and they operate as a general partnership, each partner’s share will be established separately to show the changes in each partner’s share. In the case of a body corporate, shareholders’ equity consists of two main classes: • issued capital stock, namely the capital invested by the shareholders; and, • retained earnings, composed of accumulated income and losses, minus the dividends paid to the shareholders.
The dollar amount by which assets are insufficient to pay debts
“Without a day”; indefinitely. The adjournment of a session of a Court or meeting, to denote that no day has been fixed for its resumption and often, by implication, that no plans exist to do so; e.g., adjourning a discharge hearing sine die
Having assets in excess of liabilities and being able to meet one’s commitments in the normal course
A resolution decided by a majority in number, and three-fourths in value, of the creditors with proven claims present, personally or by proxy, at a meeting of creditors and voting on the resolution. For the purpose of voting by creditors on a proposal, the resolution is decided by a majority in number, and two thirds in value, of the unsecured creditors of each class present, personally or by proxy, at the meeting and voting on the resolution. See ordinary resolution.
A lien against a particular asset; which asset is clearly distinguishable by description or serial number
statement of affairs
A statement of financial position similar to a balance sheet; a statement of assets and liabilities drawn up to indicate the amounts which may be expected to be realized if the debtor’s property is sold and the manner in which the proceeds of such sale will be distributed, having regard for the interests of secured, preferred, and unsecured creditors
statement of receipts and disbursements
A statement detailing the receipt and disbursement of funds and interest received by the Trustee, the remuneration claimed by the Trustee, and full particulars of all property of the bankrupt that has not been sold or realized
The present state of affairs
A written law of a legislative body; e.g., federal or provincial statutes or Acts
A declaration made before a commissioner for oaths
A charge levied on an asset as a result of a federal or provincial statute
stay of proceedings
A stopping or postponement of a judicial proceeding
style of cause or matter
The caption of a pleading or other papers connected with a case in Court; the heading or introductory clause that shows the names of the parties, name of the Court, number of the case, etc.; e.g., In the matter of the bankruptcy of John Doe
A person not contracting with, or employed directly by, an owner or his agent to do work upon, or to place or furnish material, or to do both on or for the making of an improvement, but one who contracts with, or is employed by, the contractor or under him by another sub-contractor or their agents for the purposes aforesaid, but does not include a workman
A paragraph in a contract that imposes some obligation on one of the parties to the contract, the obligation having to be fulfilled before the terms of the contract are met. If the subject clause is not complied with or removed, the contract is void.
A lower rank, or to be subject to the orders or directions of another
A process by which the Court commands a witness to appear or produce certain documents or records in a trial
To substitute a claim against one person for a claim against another person; to transfer a security originally imposed on one piece of property to another piece of property.
An estate in which, at the time of filing, unencumbered, realizable assets are valued at $10,000 or less. Certain provisions of the Bankruptcy and Insolvency Act are waived in order to reduce administration time and costs.
superintendent of bankruptcy
The person appointed by the Governor in Council to supervise the administration of all estates and matters to which the Bankruptcy and Insolvency Act applies; duties include the review of Trustees’ and debtors’ actions in all aspects of bankruptcy, reviewing the performances of official receivers and senior bankruptcy analysts, and the issuing or renewal of Trustee licences
A guarantor; a formal engagement entered into, a pledge, bond, guarantee or security given for the fulfilment of an undertaking
Generally a remainder or excess, as in surplus proceeds from the sale of an asset after the secured creditor’s claim is paid
Schedule of fees as specified in the Bankruptcy and Insolvency Act
“Loss carried Forward”, pursuant to Part III of the Income Tax Act. Business losses may be acquired by a company if it purchases the shares of the loss company and adheres to certain conditions of the Income Tax Act.
In accordance with section 150 of the Income Tax Act, Trustees and receivers are required to file returns on dates as determined under the Income Tax Act.
The sale of real property by a public authority in order to pay delinquent taxes assessed upon its owner
taxation (of accounts)
Application to the Court to have certain costs of the Trustee, receiver or legal counsel examined and approved by the Court
tenancy in common
Equitable ownership of property by two or more persons in equal or unequal undivided shares, with no right of survivorship. See joint tenancy.
An offer in writing to buy or sell
Any party to an incident, case, quarrel, etc., who is incidentally involved
third party retainer
A special type of retainer, whereby funds are provided by a third party, to secure the fees and disbursements of the Trustee, but are returned to the third party if the Trustee realizes enough out of the estate to cover the fees and costs and, in the case of a proposal, returned to the third party if the proposal is refused by the creditors or not approved by the Court
Legal right to the possession of property; the instrument constituting evidence of such right. See joint title and title in common.
Persons, including businesses, to whom a debt is owed for the supply of goods and services in the normal course of business
A fiduciary relationship in which one person holds the title to property for the benefit of another
Monies, securities, property, etc. held by one person for the benefit of another. Trust funds cannot be used for purposes other than that for which they were intended. Trust property held by the bankrupt is not part of the estate of the bankrupt.
“Beyond their powers”; unauthorized; any action which is beyond the legal powers of a particular body to take
To commit oneself by promise; a pledge or engagement
Assets which have not been converted into cash; a claim against a bankrupt estate that has not been quantified by a dollar amount
An estimated value of worth; the act of estimating the value of something
An order by a Court to give possession, control or title of property, rights, power, etc. to a person; e.g., a vesting order can provide that clear title to a property be given to a named person on the completion of a sale agreement, where the funds to be realized on the sale are not great enough to retire registered encumbrances on that property.
The characterization of an act a done by one person to annoy, embarrass, or otherwise disturb another person, and which has no foundation in fact or otherwise
The winding-up of a solvent company’s affairs may be done under the Canada Business Corporations Act, under which the company is incorporated, or under federal or provincial winding-up statutes. A liquidator is appointed at a general meeting. The shareholders decide on a voluntary liquidation by voting a special resolution. A company may be wound up involuntarily by Court Order.
A document in which a creditor with a provable claim registers his vote for or against the acceptance of a proposal
An intentional relinquishment of some right, interest or the like; an express or written statement of such relinquishment
A charge on goods deposited for storage, whether deposited by the owner of the goods or by his authority. The warehouseman may hold the goods until paid or may sell the goods and recover his account. See mechanic’s lien.
A written guarantee of performance or state from a vendor to a purchaser, that the thing sold is the vendor’s to sell and is good and fit for such use as the purchaser intends to make of it
Wherever it may be
Winding-up and Restructuring Act
The federal statute governing the winding-up of certain solvent companies, but primarily used to deal with insolvent financial institutions and insurance companies
Without dismissing, damaging or otherwise affecting a legal interest or demand; without detriment to existing right or claim. This term is used when a person, in the desire to avoid litigation or dispute without admitting that the other party has a claim, offers to do something he need not do, such as to compromise a claim of his own or to pay when he feels he is not liable.
Working capital is the excess of current assets over current liabilities. A creditor may attach great importance to this measure, because it gives a good idea of the capacity of a business to pay its debts and obtain supplies on credit. Even if total assets are much greater than total liabilities, a business may face a cash shortage, have a working capital deficit and find itself in serious financial difficulties.
A legal document of written notice or command issued by a Court or other official. Can include Writ of Seizure and Sale, Writ of Summons, Writ of Subpoena, Writ of Attachment, Writ of Habeas Corpus, etc.
writ of summons
A legal document of written notice prepared by the plaintiff which is registered at the appropriate Court Registry, giving notice to the defendants that a legal action has been commenced against them and containing details of the plaintiff’s claims