Security for Debt, and Bankruptcy and Insolvency

1
Security for Debt, and Bankruptcy and Insolvency

• Canadian Business Law I
• Lecture 11
• November 29, 2007

2
Forms of Security for Debt

• Chattel mortgage
• Conditional-sale agreement
• Bill of sale
• Assignment of book debts
• Personal property security legislation
• Secured loans by banks
• Bank credit cards
• Bonds, debentures and floating charges
• Bulk Sales Act
• Mechanics or construction liens

3
Security for Debt 1

• Chattel mortgage
• Features
• Registration
• Conditional-sale agreement
• Features
• Registration
• Assignment
• Buyers relief

4
Security for Debt 2

• Bill of sale
• Features
• Registration
• Assignment of book debts
• Features
• Registration
• Personal property security legislation
• After-acquired property
• Purchase Money Security Interest

5
Security for Debt 3

• Secured loans under the Bank Act - different
  kind of registration
• Bank credit cards Bank of Montreal v. Demakos
  (1997)
• Bonds and debentures
• Floating charge
• Bulk Sales Act

6
Security for Debt 4

• Mechanics and construction liens
• Background
• Cover sub-contractors
• Lien holdbacks
• Priority among security interests

7
Bankruptcy and Insolvency

• Bankruptcy assets less than liabilities
• Insolvency inability to pay debts, essentially
  a cash flow issue
• Object of bankruptcy law In the matter of
  bankruptcy of Edward Lai (2005)
• Bankruptcy legislation
• Bankruptcy and Insolvency Act
• Winding Up and Restructuring Act
• Companies Creditors Arrangement Act Air Canada

8
Bankruptcy 1

• Acts of bankruptcy S. 42(1)
• Bankruptcy proceedings
• Proposal voting unsecured creditors
• Voluntary assignment by the debtor
• Petition by creditors
• Bankruptcy procedure Fig. 33-2

9
Bankruptcy 2

• Discharge Re Pufahl (Bankrupt) (2005)
• Consumer bankruptcy
• Liabilities (other than home mortgage) less than
  75,000
• Summary procedure
• Administrator
• Bankruptcy offences