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May 2019 Archives

Chinese debtors face public shaming - at the movies

No one likes the endless trailers and advertisements that precede the main feature at movie theatres these days. But some in the audience might have preferred more ads to the fare on offer at a recent screening of the latest Avenger movie. ABC News reports that Chinese authorities now shame debtors and defaulters who owe money to the state by projecting their names and faces on the screen at movie theatres.

Bill C97

On April 8, 2019, the federal government introduced Bill C 97, An Act to Implement Certain Provisions of the Budget Tabled in Parliament On March 19, 2019 and Other Measures, which includes proposed amendments to the Bankruptcy and Insolvency Act, as well as the Companies' Creditors Arrangement Act.

Trustee's disallowance of claim a reminder to creditors to take proofs of claims seriously

A recent decision of the Supreme Court of BC took issue with a bankruptcy trustee's investigation of a proof of claim, but also serves as a reminder that creditors need to take the proof of claim process seriously, particularly where there is any complexity to their claim, or else they risk unneeded cost and inconvenience.

Prepayment penalties in loan agreements

Loan agreements will often have fixed repayment terms. In some cases, it is in the lender's interest to delay the repayment of the loan, usually in order to take advantage of a high interest rate. In order to guarantee the payment of interest at the high rate for the whole of the projected term, the loan agreement may contain a prepayment provision. Under such provision, even though early payment may be allowed, the lender will be entitled to recover the amount of interest that would have otherwise been payable over the term of the loan.

Passive Participation in a Fraud can Still Result in Criminal Sanctions

One doesn't have to be the master mind of a fraud in order to face criminal charges and sanctions for it later. In the case of R. v Roberts, 2019 BCSC 338, Mr. Roberts was charged with fraud over $5,000 for participating in a fraud on Scotiabank, wherein Scotiabank lost approximately $6M. Mr. Roberts was the office manager of Aggressive Road Builders ("ARB") and he knowingly provided documents to Scotiabank that contained false information so that Scotiabank would approve a $7M operating line of credit for ARB that would pay out ARB's then operating line of credit with the Royal Bank.

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