Académique Documents
Professionnel Documents
Culture Documents
Province of Ontario
Section A – Background
The Trustee has been advised by the management of the Company that
financial difficulties commenced in 2009 as a result of some delayed
payments from contractors, a $4,000,000 contract for the Constellation Hotel
that was not paid due to the bankruptcy of the owner, an unprofitable
venture into the United States market due to the downturn in the United
States economy, and a lack of confidence in the industry that has created
difficulties in collecting outstanding accounts receivables. Additionally, as a
result of significant debts owing to Canada Revenue Agency (“CRA”) for
unremitted payroll deductions and GST/HST, CRA issued enhanced
garnishment notices on the Company’s customers and bank account holders
which resulted in an interruption in the Company’s cash flow. The
indebtedness to CRA for unremitted payroll source deductions and GST/HST is
approximately $2,171,753. The Company was unable to continue operating
and accordingly filed an assignment in bankruptcy.
Based on the sworn Statement of Affairs dated April 1, 2011, the Company’s
assets are as follows:
Asset description
Work in progress
$ 3,168,526
Accounts receivable
817,290
192,212
5,462
61,972
$ 4,245,463
Work in progress
Accounts receivable
Priority Claims
Secured Creditors
A search pursuant to the Personal Property and Security Act (Ontario) was
conducted on April 4, 2011, which revealed that the following registrations
may have a security interest in the Company’s assets:
Name
Registration type
Motor Vehicles
John Deere
Luigi Santaguida
The Trustee is in the process of reviewing the claims of the secured creditors.
Valid claims will rank in priority to the claims of unsecured creditors.
Furthermore, all assets that are not subject to a true lease may be subject to
the priority claims of CRA. The Trustee has contacted the secured creditors
and requested that they file their proofs of claim as soon as possible. At the
present time the Trustee does not anticipate any funds to be available for
distribution to unsecured creditors.
Filed to Date
Deemed Trust
$ 1,837,476
$ -
Secured
13
10,171,969
Preferred
Unsecured
7,532,314
3,695,840
$ 9,369,803
$ 13,867,809
Contingent
$ 16,583,939
The Trustee did not take possession of the Company’s Premises and has
removed the records of the Company from the Premises.
Payments
No legal proceedings have been commenced by the Trustee prior to the First
Meeting of Creditors; however there is a significant amount of litigation that
had commenced prior to the bankruptcy, including claims for debts due to
the Company. The Trustee will request an administrative agreement with CRA
with respect to the handling of these claims.
As set out above, the Trustee is in the process of reviewing the security
documents of secured claimants in order to verify the enforceability of the
security as against the Trustee. The claim of the secured creditors will rank
in priority to the claims of unsecured creditors.
“Preference payments” are payments that may have resulted in one or more
creditors being paid in preference to other creditors at a time when the
Company was insolvent. “Transfers at under value” is a disposition of
property or provision of services for which no consideration was received by
the debtor, or for which the consideration given was conspicuously less than
the fair market value. A Court can issue a judgement or possibly reverse a
preference or transfer at under value if it can be proven that a preference
was given to a creditor(s) or if a transaction did not take place for “fair
value”.
The Trustee’s fees will be based on time and hourly basis and will be paid
from the realizations of the Estate.
Luigi Santaguida has guaranteed the Trustee’s fees for its time and
disbursements incurred in administering the Estate and has provided a
limited third party deposit. These funds have been deposited to the Trustee’s
third party trust account and will be drawn upon in the event that the
realization of assets is insufficient to pay the Trustee’s fees and
disbursements.
Per:
______________________________
President