Question 1

What conditions must be satisfied by the seller of unpaid goods in order to repossess them from a bankrupt business?

Accepted Answer

The creditor must demand the return with

Question 2

In a bankruptcy, preferred creditors are always paid first before any other creditors.

Accepted Answer

A) True 
 B)False

Question 3

In a bulk sales transaction where the sale proceeds will be less than the amount owing to the creditors, the proper procedure for a buyer is to

Accepted Answer

A)  obtain consent to the terms of the transaction from the minimum proportion of creditors as set out in the Bulk Sales Act. 
B)  pay the sale proceeds to a trustee appointed by the seller. 
C)  distribute the sale proceeds pro rata to the creditors. 
D)  pay the sale proceeds to the seller. 
E)  pay the sale proceeds to a trustee appointed by the buyer(s). 
A)  obtain consent to the terms of the transaction from the minimum proportion of creditors as set out in the Bulk Sales Act. 
B)  pay the sale proceeds to a trustee appointed by the seller. 
C)  distribute the sale proceeds pro rata to the creditors. 
D)  pay the sale proceeds to the seller. 
E)  pay the sale proceeds to a trustee appointed by the buyer(s).

Question 4

Robert Badger operated a hardware business as a sole proprietorship and owed $200,000 to creditors. On June 1st, 1998 he transferred $20,000 of inventory to Smith Supplies Inc. to pay in full the indebtedness he owed that company. At the time he was not paying his debts as they became due. Instead he paid some money towards accounts when pressed or negotiated with them to give him more time to pay. On July 15th, he transferred a truck used in the business for one dollar to his cousin. On July 20th, a creditor obtained a default judgment and the Sheriff seized goods on July 28th in relation to that judgment. The goods were later sold in a judicial sale. On July 29th, he purchased on credit $15,000 worth of new inventory. On August 14th, a creditor petitioned him into bankruptcy. List each incident where there is an act of bankruptcy. Discuss Robert's situation in relation to the provisions of the Bankruptcy and Insolvency Act.

Accepted Answer

Robert Badger has committed the followin

Question 5

Which of the following is correct regarding the statue of limitations?

Accepted Answer

A)  On contractual rights, the legal remedy is barred after 6 years from the time of the right. 
B)  The usual length of time for limitation statute is six years. 
C)  A new promise arises when the debtor makes a part payment. 
D)  The limitation period is considerably longer when the promise was made under seal. 
E)  all of the above 
A)  On contractual rights, the legal remedy is barred after 6 years from the time of the right. 
B)  The usual length of time for limitation statute is six years. 
C)  A new promise arises when the debtor makes a part payment. 
D)  The limitation period is considerably longer when the promise was made under seal. 
E)  all of the above

Question 6

James had made a consumer proposal (Division II) to his creditors. He wanted a reduction and extension of time for the payment of his debts. A formal meeting was not requested by any of the creditors. Now the administrator must

Accepted Answer

A)  run a public notice in the newspaper. 
B)  notify and file the document with all creditors. 
C)  provide counseling to the debtor. 
D)  see that all the provisions meet Division I rules. 
E)  get approval of the proposal from the court. 
A)  run a public notice in the newspaper. 
B)  notify and file the document with all creditors. 
C)  provide counseling to the debtor. 
D)  see that all the provisions meet Division I rules. 
E)  get approval of the proposal from the court.

Question 7

In bankruptcy proceedings, the term "settlements" refers to

Accepted Answer

A)  complying with each provision in the Bankruptcy and Insolvency Act. 
B)  refers to gifts of property made by the debtor before becoming bankrupt. 
C)  the end results in the bankruptcy proceedings. 
D)  the amount each creditor is willing to settle for to satisfy his claim. 
E)  the negotiations between classes of creditors. 
A)  complying with each provision in the Bankruptcy and Insolvency Act. 
B)  refers to gifts of property made by the debtor before becoming bankrupt. 
C)  the end results in the bankruptcy proceedings. 
D)  the amount each creditor is willing to settle for to satisfy his claim. 
E)  the negotiations between classes of creditors.

Question 8

The Superintendent of Bankruptcy has the power to

Accepted Answer

A)  investigate where a bankruptcy offence may have been committed. 
B)  intervene in any bankruptcy court proceeding. 
C)  issue directives to trustees or receivers. 
D)  suspend or cancel a trustee's license. 
E)  all of the above 
A)  investigate where a bankruptcy offence may have been committed. 
B)  intervene in any bankruptcy court proceeding. 
C)  issue directives to trustees or receivers. 
D)  suspend or cancel a trustee's license. 
E)  all of the above

Question 9

What is the difference between a bankrupt person and an insolvent person?

Accepted Answer

A bankrupt person is a person against wh

Question 10

What is the object of Builder's Lien legislation?

Accepted Answer

Mechanic's Lien legislation is intended

Question 11

Brianna, a framing contractor, has a duly registered Builder's lien on the property owned by Bowing Development. This lien gives Brianna the right to

Accepted Answer

A)  place a claim on the owner's business assets. 
B)  commence a legal action within 90 days against the general contractor. 
C)  obtain 15% of the statutory holdback. 
D)  personally take possession of the property in order to realise his claim. 
E)  bring an action and obtain a court order appointing a trustee. 
A)  place a claim on the owner's business assets. 
B)  commence a legal action within 90 days against the general contractor. 
C)  obtain 15% of the statutory holdback. 
D)  personally take possession of the property in order to realise his claim. 
E)  bring an action and obtain a court order appointing a trustee.

Question 12

Explain the public policy behind the Bankruptcy and Insolvency Act. What is the rationale for assisting bankrupt debtors?

Accepted Answer

The public policy justifying bankruptcy

Question 13

Under the Bankruptcy and Insolvency Act, what is a commercial proposal?

Accepted Answer

A commercial proposal is an offer made b

Question 14

To obtain a receiving order, creditors must prove the debtor has committed an act of bankruptcy. Which of the following is NOT such an act?

Accepted Answer

A)  default in a proposal that the debtor had previously persuaded the creditors to accept 
B)  attempting to hide behind the corporate veil 
C)  written admission by the debtor that he is unable to pay his debts 
D)  an attempt by the debtor to remove or hide any of his property 
E)  an assignment of assets to a trustee in bankruptcy 
A)  default in a proposal that the debtor had previously persuaded the creditors to accept 
B)  attempting to hide behind the corporate veil 
C)  written admission by the debtor that he is unable to pay his debts 
D)  an attempt by the debtor to remove or hide any of his property 
E)  an assignment of assets to a trustee in bankruptcy

Question 15

The Competition Tribunal may permit a proposed merger that that may substantially and detrimentally lessen competition if it decides that the merger is economically efficient.

Accepted Answer

A) True 
 B)False

Question 16

A Builder's lien is available only to creditors who participate directly as workers, or supply material for use directly in the construction work.

Accepted Answer

A) True 
 B)False

Question 17

Under the Canadian Charter of Rights and Freedoms, corporations can challenge government action that does not conform to the standards set out in the Charter.

Accepted Answer

A) True 
 B)False

Question 18

In the context of bankruptcy proceedings, liquidating dividends are

Accepted Answer

A)  payments made to creditors from time to time as realisation of the debtor's assets permits. 
B)  unexpected returns from assets that were unaccounted for in the books. 
C)  funds distributed to shareholders when a corporation is in bankruptcy. 
D)  proceeds from the sale of assets over and above the security claims. 
E)  the distributed funds which are over and above the stated book value. 
A)  payments made to creditors from time to time as realisation of the debtor's assets permits. 
B)  unexpected returns from assets that were unaccounted for in the books. 
C)  funds distributed to shareholders when a corporation is in bankruptcy. 
D)  proceeds from the sale of assets over and above the security claims. 
E)  the distributed funds which are over and above the stated book value.

Question 19

What is a bulk sale?

Accepted Answer

A sale of all or sub

Question 20

When is an undischarged bankrupt liable to a fine or imprisonment?

Accepted Answer

A bankrupt is liable to both imprisonmen

Exam 31: Creditors Rights

What conditions must be satisfied by the seller of unpaid goods in order to repossess them from a bankrupt business?

In a bankruptcy, preferred creditors are always paid first before any other creditors.

In a bulk sales transaction where the sale proceeds will be less than the amount owing to the creditors, the proper procedure for a buyer is to

Which of the following is correct regarding the statue of limitations?

James had made a consumer proposal (Division II) to his creditors. He wanted a reduction and extension of time for the payment of his debts. A formal meeting was not requested by any of the creditors. Now the administrator must

In bankruptcy proceedings, the term "settlements" refers to

The Superintendent of Bankruptcy has the power to

What is the difference between a bankrupt person and an insolvent person?

What is the object of Builder's Lien legislation?

Brianna, a framing contractor, has a duly registered Builder's lien on the property owned by Bowing Development. This lien gives Brianna the right to

Explain the public policy behind the Bankruptcy and Insolvency Act. What is the rationale for assisting bankrupt debtors?

Under the Bankruptcy and Insolvency Act, what is a commercial proposal?

To obtain a receiving order, creditors must prove the debtor has committed an act of bankruptcy. Which of the following is NOT such an act?

The Competition Tribunal may permit a proposed merger that that may substantially and detrimentally lessen competition if it decides that the merger is economically efficient.

A Builder's lien is available only to creditors who participate directly as workers, or supply material for use directly in the construction work.

Under the Canadian Charter of Rights and Freedoms, corporations can challenge government action that does not conform to the standards set out in the Charter.

In the context of bankruptcy proceedings, liquidating dividends are

What is a bulk sale?

When is an undischarged bankrupt liable to a fine or imprisonment?

Law and Society

The Machinery of Justice

The Law of Torts

Professional Liability

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration, and Intention to Create Legal Relations

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

Grounds Upon Which a Contract May Be Impeached: Mistake

Grounds Upon Which a Contract May Be Impeached: Misrepresentation, Undue Influence, and Duress

The Requirement of Writing

The Interpretation of Contracts

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

The Effect of Breach

Remedies for Breach

Sale of Goods

Leasing and Bailment

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

The Internal Affairs of Corporations

The External Responsibilities of a Corporation

Secured Transactions

Government Regulation of Business

International Business Transactions

Electronic Commerce

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