Question 1

A bulk sale,as defined by provincial statutes,is a sale

Accepted Answer

A) of all goods in process and semi-finished inventories. 
B) governed by the federal Bulk Sales Act. 
C) of such a large portion of the assets that the business will cease to operate. 
D) whose purpose is to deprive creditors of their equitable share in the assets of the company. 
E) of essentially all the stock-in-trade,fixtures,and chattels of a business. 
A) of all goods in process and semi-finished inventories. 
B) governed by the federal Bulk Sales Act. 
C) of such a large portion of the assets that the business will cease to operate. 
D) whose purpose is to deprive creditors of their equitable share in the assets of the company. 
E) of essentially all the stock-in-trade,fixtures,and chattels of a business. E

Question 2

An assignment in bankruptcy is a procedure under which a person voluntarily declares bankruptcy.

Accepted Answer

A) True 
 B)False  True

Question 3

The Steamboat Co.is Charlie's sole creditor.He owes them $6500 from his sign painting business.In order to obtain a receiving order,Steamboat must

Accepted Answer

A) comply with all formalities required by the federal Bank Act. 
B) make sure the debtor has committed an act of bankruptcy within the previous six months. 
C) file a petition with the court in the creditor's judicial district. 
D) provide the court with the name of the appointed trustee. 
E) prove the facts alleged by any other petitioning creditor. 
A) comply with all formalities required by the federal Bank Act. 
B) make sure the debtor has committed an act of bankruptcy within the previous six months. 
C) file a petition with the court in the creditor's judicial district. 
D) provide the court with the name of the appointed trustee. 
E) prove the facts alleged by any other petitioning creditor. B

Question 4

Jumping Jellyfish Corporation is a Canadian business that is indebted to a number of persons and entities.On January 2,2003,the accountant of Jumping Jellyfish examines the books and makes the determination that the current debts of the corporation total $2 million,and the assets and cash total only $200 000.The accountant concludes that the corporation will be unable to pay its debts as they become due.The corporation is

Accepted Answer

A) insolvent and bankrupt. 
B) insolvent. 
C) a trustee. 
D) a receiver. 
E) bankrupt. 
A) insolvent and bankrupt. 
B) insolvent. 
C) a trustee. 
D) a receiver. 
E) bankrupt.

Question 5

Regarding bankruptcy,public policy would be primarily concerned with

Accepted Answer

A) making it easy and inexpensive to apply for bankruptcy. 
B) the punishment of honest debtors who after bankruptcy simply re-engage in the same questionable business activities. 
C) placing some limits on who can use bankruptcy proceedings. 
D) forcing reputable creditors to accept an arrangement designed to save a debt-ridden company. 
E) keeping economic initiative alive. 
A) making it easy and inexpensive to apply for bankruptcy. 
B) the punishment of honest debtors who after bankruptcy simply re-engage in the same questionable business activities. 
C) placing some limits on who can use bankruptcy proceedings. 
D) forcing reputable creditors to accept an arrangement designed to save a debt-ridden company. 
E) keeping economic initiative alive.

Question 6

Of the preferred creditors,the highest priority of claim is

Accepted Answer

A) up to $2000 arrears in wages per employee. 
B) up to three months of rent due to the landlord. 
C) expenses and fees of the trustee in bankruptcy. 
D) up to two years of municipal taxes. 
E) the amount required by government to be deducted from employees' salaries. 
A) up to $2000 arrears in wages per employee. 
B) up to three months of rent due to the landlord. 
C) expenses and fees of the trustee in bankruptcy. 
D) up to two years of municipal taxes. 
E) the amount required by government to be deducted from employees' salaries.

Question 7

The Bankruptcy and Insolvency Act distinguishes between three classes of debtors.

Accepted Answer

A) True 
 B)False

Question 8

All creditors are considered to be equal in bankruptcy law.

Accepted Answer

A) True 
 B)False

Question 9

You are a duly licensed and appointed trustee to handle the Markin Brothers bankruptcy.You have taken possession of both personal and business assets of Sam and Joe Markin.You have retrieved all the books and documents relating to their affairs.You also have the authority to do each of the following EXCEPT

Accepted Answer

A) borrow further money for the business by pledging any remaining unsecured assets. 
B) negotiate with creditors to take specific assets in lieu of a money settlement. 
C) dismiss any unqualified inspectors. 
D) take over the management of the business. 
E) employ a lawyer,who will be paid out of bankruptcy funds. 
A) borrow further money for the business by pledging any remaining unsecured assets. 
B) negotiate with creditors to take specific assets in lieu of a money settlement. 
C) dismiss any unqualified inspectors. 
D) take over the management of the business. 
E) employ a lawyer,who will be paid out of bankruptcy funds.

Question 10

What is a bulk sale?

Accepted Answer

A bulk sale is a sal

Question 11

The RRSPs of a bankrupt are exempt from seizure.

Accepted Answer

A) True 
 B)False

Question 12

Mike's business is not doing too well and he is contemplating bankruptcy unless things change soon.As he currently deals with his creditors,the guiding principle should be that

Accepted Answer

A) creditors of the same class should be treated equally. 
B) preferences should not include family or friends. 
C) all transactions within three months preceding bankruptcy are indefensible. 
D) transfers of property such as the sale of inventory will be invalidated. 
E) bankruptcy is an avenue of last resort and should be avoided at all cost. 
A) creditors of the same class should be treated equally. 
B) preferences should not include family or friends. 
C) all transactions within three months preceding bankruptcy are indefensible. 
D) transfers of property such as the sale of inventory will be invalidated. 
E) bankruptcy is an avenue of last resort and should be avoided at all cost.

Question 13

Each of the following parties has a right to file a builders' lien EXCEPT the one that

Accepted Answer

A) is an architect and has prepared plans for the building. 
B) sells tools or machinery to the contractor. 
C) delivers goods directly to the contractor's premises and can prove that the goods were used in the construction. 
D) rents equipment for use on the contract site. 
E) delivers goods directly to the building site. 
A) is an architect and has prepared plans for the building. 
B) sells tools or machinery to the contractor. 
C) delivers goods directly to the contractor's premises and can prove that the goods were used in the construction. 
D) rents equipment for use on the contract site. 
E) delivers goods directly to the building site.

Question 14

When a debtor makes an assignment is bankruptcy,the court will discharge the person from obligations to creditors.

Accepted Answer

A) True 
 B)False

Question 15

An unpaid seller who repossesses goods from a bankrupt and then sells them,can still make a claim for any deficiency in respect of those goods.

Accepted Answer

A) True 
 B)False

Question 16

In most Canadian jurisdictions,a plaintiff must start court proceedings within a two-year period.Limitation periods are justified on any of the following grounds EXCEPT that

Accepted Answer

A) a person who fails to pursue a claim leaves the other party in a state of uncertainty that ought not to continue permanently. 
B) as time passes,it becomes more difficult to produce the evidence concerning the facts of the case. 
C) memories fade over time. 
D) any unreasonable delay provides defendants with an opportunity to hide assets or become judgment proof. 
A) a person who fails to pursue a claim leaves the other party in a state of uncertainty that ought not to continue permanently. 
B) as time passes,it becomes more difficult to produce the evidence concerning the facts of the case. 
C) memories fade over time. 
D) any unreasonable delay provides defendants with an opportunity to hide assets or become judgment proof.

Question 17

Use the fact situation in Q2 to answer the related question that follows. In order to recover the amount of George's shareholders loan,the trustee in bankruptcy of General Widgets will

Accepted Answer

A) sue George for damages for breach of duty of care. 
B) sue George for breach of fiduciary duty. 
C) apply to the court to have the transaction nullified. 
D) apply to the court to enquire whether it is a reviewable transaction. 
E) all of the above 
A) sue George for damages for breach of duty of care. 
B) sue George for breach of fiduciary duty. 
C) apply to the court to have the transaction nullified. 
D) apply to the court to enquire whether it is a reviewable transaction. 
E) all of the above

Question 18

In respect to a statute-barred debt,under what circumstances is there a presumption of a new promise to pay the whole indebtedness?

Accepted Answer

The presumption of a new promi

Question 19

A trustee in bankruptcy has the same general duties as does a normal trustee.Explain.

Accepted Answer

Apart from her or his duties and obligat

Question 20

Laura had made a commercial proposal (Division I)to her creditors.They have accepted it by a two-thirds vote.The next step is for the trustee to

Accepted Answer

A) schedule a hearing in the Bankruptcy Court. 
B) apply to the court to have the proposal declared binding upon all the creditors. 
C) get the approval of the receiver in bankruptcy. 
D) determine if the agreement is prejudiced against general creditors. 
E) file the document with the Superintendent of Bankruptcy. 
A) schedule a hearing in the Bankruptcy Court. 
B) apply to the court to have the proposal declared binding upon all the creditors. 
C) get the approval of the receiver in bankruptcy. 
D) determine if the agreement is prejudiced against general creditors. 
E) file the document with the Superintendent of Bankruptcy.

Exam 29: Creditors Rights

A bulk sale,as defined by provincial statutes,is a sale

An assignment in bankruptcy is a procedure under which a person voluntarily declares bankruptcy.

The Steamboat Co.is Charlie's sole creditor.He owes them $6500 from his sign painting business.In order to obtain a receiving order,Steamboat must

Regarding bankruptcy,public policy would be primarily concerned with

Of the preferred creditors,the highest priority of claim is

The Bankruptcy and Insolvency Act distinguishes between three classes of debtors.

All creditors are considered to be equal in bankruptcy law.

What is a bulk sale?

The RRSPs of a bankrupt are exempt from seizure.

Mike's business is not doing too well and he is contemplating bankruptcy unless things change soon.As he currently deals with his creditors,the guiding principle should be that

Each of the following parties has a right to file a builders' lien EXCEPT the one that

When a debtor makes an assignment is bankruptcy,the court will discharge the person from obligations to creditors.

An unpaid seller who repossesses goods from a bankrupt and then sells them,can still make a claim for any deficiency in respect of those goods.

In most Canadian jurisdictions,a plaintiff must start court proceedings within a two-year period.Limitation periods are justified on any of the following grounds EXCEPT that

Use the fact situation in Q2 to answer the related question that follows. In order to recover the amount of George's shareholders loan,the trustee in bankruptcy of General Widgets will

In respect to a statute-barred debt,under what circumstances is there a presumption of a new promise to pay the whole indebtedness?

A trustee in bankruptcy has the same general duties as does a normal trustee.Explain.

Laura had made a commercial proposal (Division I)to her creditors.They have accepted it by a two-thirds vote.The next step is for the trustee to

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

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Negotiable Instruments

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Interests in Land and Their Transfer

Landlord and Tenant

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