Advantages
Here are the main advantages of doing business with a bankruptcy trustee rather than an Official Receiver:
- Quicker appointing of estate mortgage concerning inventories and equipments (without advance notice - 10 days according LFI; - 20 days according to CCQ), except if the appointing of inventories are done in conjunction with article 427 of the bank law.
- Elimination of the obligations of secured creditors under the term of articles 243, 244, 245 and 246 of the LFI
- Reversal of certain priorities of the CCQ (PST, GST, lessor, corporate taxes, except federal and provincial DAS) that will be considered as ordinary creditors rather than privileged secured creditors.
- Suspension of other creditor's procedures against burdened assets.
- Simplified sales procedure comparatively to the civil code procedure (Securities repurchase VS mortgage resort).
- Use of the trustee's power of investigation.
- No occupation rent by the trustee before the first meeting with creditors.
- Limited risks as stated in article 14 of the LMR.
- The trustee can take possession of the assets free of ties and can change the locks of the office occupied by the debtor (it is not necessary to move the assets).
- 5% of the take of the superintendent.
- Bankruptcy inspectors must approve the total sales for all the creditors.
- Taxation of the trustee's fees and expenditures related to the sales of burdened assets.
- The trustee has a duty of transparency more important than the official receiver towards the different concerned parties.
