On Thursday night I attended the Credit Education Week Annual Gala. Doug Gilmour, who worked selling mortgages for a couple of years, spoke to the group about money, his family, and the dangers of money.
When a person declares bankruptcy, a moratorium (stay) is put in place to preserve the integrity of the process. There are certain provisions of the Bankruptcy and Insolvency Act (BIA) that allow for the court to lift the moratorium, and allow for cases to proceed. There is a similar provision in the United States bankruptcy code, which stops actions from continuing.
Bill Clay Crafton Jr. filed for bankruptcy in the United States in September .He was a financial adviser to many, including NFL player Matt McCoy and Philadelphia Phillies Pitcher Cole Hamels. They were granted leave to pursue an action against Crafton… see thislink or this link more details.
The law suit was brought for breach of fiduciary duty, constructive fraud, fraud, deceit, fraudulent misrepresentation…there were losses for over $7.6 million dollars.
This just serves as a reminder for 2 questions that I get quite often. In Canada, if there is an action against you, or brought against you, and you have recently declared bankruptcy, the court will grant leave for the case to continue more often than not.
In Canada, if you commit fraud, and you have filed for bankruptcy or filed a proposal, the proposal or the bankruptcy may not shield you. If the court decides that whatever you have done falls under the exclusions under Section 178 of the BIA, then the action will continue.