LAW 603 Lecture Notes - Lecture 9: Unsecured Creditor, Secured Creditor, Fraudulent Conveyance

• School: Ryerson University
• Department: Law and Business
• Course: LAW 603
• Professor: Andre Serero

Document Summary

Bankruptcy regime provides for the orderly and predictable distribution of debtors assets to creditors. Insolvent: debts exceed assets or unable to meet liabilities as they become due. Bankrupt: assignment into bankruptcy vs. being petitioned into bankruptcy by a creditor. Liquidation: sale of debtors assets into money that is distributed to creditors. Discharge: release of a debtor from bankruptcy status- freedom from pre bankruptcy debt- a fresh start. Proposal: court approved arrangement between a debtor and its creditors to restructure the debtors debts outside of formal bankruptcy. Bia prevails in event of direct conflict. Insolvency: factual status: unable to meet obligations as they fall due, debtor ceased paying current obligations in the ordinary course of business, value of assets less total obligations. Many businesses operate at or near insolvency, from time to time. Difference between consumer and corporate regimes: approval requirements for proposals. Corporate: majority of each class with 66% value in each class. Consumer: simple majority approval: discharge following bankruptcy.