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Managing Risk in Uncertain Times
The Role of the Credit Professional in the Commercial Leasing Industry by Lisa Moore CCP
December 15, 2009: civil servants in Ireland rally in reaction to the Irish government's vote in favour of a reduction in public sector compensation by 5-15%. The Republic of Ireland is claimed to be facing the deepest financial crisis of any advanced nation and it isn't over yet.
May 5, 2010: striking protestors in Greece, the undisputed pillar of ancient democratic civilization, jam the streets setting the finance ministry ablaze, killing three.
ELECTRONIC FUNDS Transfers and Fraud
Electronic Funds Transfers (“EFTs”) are widely accepted as a method for organizations to transfer funds on a timely basis to suppliers, employees and other organizations. However, EFTs can pose an internal control weakness for many organizations. Employees can circumvent the built-in internal controls, if any, and defraud the organization of significant amounts of cash at one time or over a period of time. EFTs typically allow employees to withdraw organizational funds by way of an Online Banking Agreement (“OBA”) in which an employee may ...
Court Declines to Approve Sale of Assets as Part of Proposal Proceedings
In the decision of Justice Cumming In the Matter of the Proposal of Hypnotic Clubs Inc. (“Hypnotic” or the “Debtor”) the court dismissed a motion by the Debtor for a sale of its assets pursuant to s.65.13 of the Bankruptcy and Insolvency Act (“BIA”).
The Interprovincial Enforcement of Judgments
A Creditor and a Debtor enter into a financial agreement in Alberta. After several years, the Debtor moves to Manitoba, leaving behind only sparse assets, (not nearly enough to cover the costs owed) in Alberta. Following a slowdown of repayments, the Creditor decides to take legal action against the Debtor in the Alberta Court of the Queen’s Bench.
Supreme Court Rules Crown DoesnĂ˘â‚¬â„˘t Have Rights To GST And QST
In a unanimous decision on October 30, 2009 relating to the Goods and Services Tax (“GST”) and the Quebec Sales Tax (“QST”), the Supreme Court of Canada rejected the most recent attempt of the Crown to secure its position by recovering the tax portion of accounts receivable outstanding at the time of bankruptcy where the bankrupt had not made the required remittances.
Factoring Agreement: Security or Sale of Assets?
Lenders and other members of the factoring community should be aware of the potential impact of a recent ruling on a priority fight over the accounts receivable of a bankrupt company. One of the issues that the court had to consider was the application of a factoring agreement.
Demand Promissory Notes and the (New) Ontario Limitations Act
Hare v. Hare (218 O.A.C. 164), a December 2006 decision of the Ontario Court of Appeal, has important ramifications for the use of demand promissory notes in tax planning. Legal and tax planners should be aware that standard drafting language used in promissory notes may bring about unintended consequences.
PPSA & Legislative Q's
Financial Ratios and Related Tools
A ratio by itself is an incomplete figure that could be misleading if analyzed in isolation. To perform an analysis, inter-related ratios should be examined and calculated over a period of time to see the trends, and then compared to ratios of industry or peers.
Financial statement simple analysis
In today's environment the obtaining of Financial Statements from a customer is becoming virtually impossible. A good credit professional needs to sell his customer on the benefits of supplying at least a common size balance sheet and income statement in order to justify a credit limit sufficient to meet both yours and the customer's needs.
CREDITâ€™S UNTOUCHABLE CODE
There is one principle of credit management which is inviolable. In fact it’s as close to being sacrosanct as Canada’s right of sovereignty over the Northwest Passage. To break with this code would be to dismantle the basic principles of credit management and the outcome would be similar to the situation which I am certain that we have all experienced in the past, when the little boy visits the grocery store with his mother and is transfixed by the beautifully structured pyramid of apples.
What to do when a customer files for Bankruptcy
Find out exactly what the situation is. Most people when they think of bankruptcy only think of the final stage, where the customer is no longer in business. In reality there are a few different types and various levels of severity.
Risk assessment is a step in a risk management procedure. Risk assessment is the determination of quantitative or qualitative value of risk related to a concrete situation and a recognized threat (also called hazard). Quantitative risk assessment requires calculations of two components of risk (R):, the magnitude of the potential loss (L), and the probability (p) that the loss will occur.
Terms used by CPA's
A CPA will competently assist an organization (whether it is a privately held business, a publicly owned corporation, or a nonprofit organization) with preparing reports on its financial performance. Such reports help owners and managers make operational decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions.
Acceleration Clauses in the Event of Default â€“ Are they enforceable?
All leases have an acceleration clause when there is a default, however there is not a consistent approach as to what the damages will be. Some leases require the defaulted lessee to pay the balance of payments due without discount while others utilize a net present value formula applying a discount rate close to, but generally below, the interest rate implied in the lease. A few still use “the rule of 78’s” (but few under 50 know what that means). The recent case, Hav-A-Kar Leasing Ltd. v. Vekselshtein 2012 ONCA 826 (“Hav-A-Kar”) discussed this matter but may have not quite got it right.
My Customer is Restructuring, in Receivership or Bankrupt â€“ What Now?
https://creditedu.org/knowledgecentre/index.php/site/video/142Presented by Jerry Henechowicz, CA-CAIRP, Trustee in Bankruptcy Jerry HenechowiczThis one hour webinar with one of Canadaâ€™s leading restructuring and insolvency firms to get updates on the best practices and latest trends in maximizing recoveries when a customer is restructuring, in receivership or bankrupt.
Lifting or Piercing The Corporate Veil
https://creditedu.org/knowledgecentre/index.php/site/video/144If you always thought that incorporation generally protects shareholders and directors from personal liability when things go wrong, then this webinar is for you. Our webinar leader is Andrew Hladyshevsky, QC, LLB and a partner with the law firm, Fraser Milner Casgrain
Advanced Telephone Collections
https://creditedu.org/knowledgecentre/index.php/site/video/147Presenter: Derek Cherewick, Vice President, Commercial Credit Adjusters Ltd.
Alternative Dispute Resolution In Credit and Collections
https://creditedu.org/knowledgecentre/index.php/site/video/148Presenter: Stephen Morrison, Partner, Cassels Brock, LLP
https://creditedu.org/knowledgecentre/index.php/site/video/152Formulas for Success in Credit Granting & Collection Presenter: Rodger Noel, ACI, Credifax Atlantic
How to Position Yourself for Promotion
Direct payments and construction insolvency
https://www.lexology.com/library/detail.aspx?g=3e346c6a-70d9-4608-8309-7bd85469f6ddMain contractor Carillionâ€™s entry into liquidation has resulted in many employers seeking to establish relationships with subcontractors, under which they will be paid directly in order to stay on site and finish the relevant project. On the face of it, this seems like an attractive solution, and may leave some employers wondering why they didnâ€™t procure their projects by construction management in the first place. However, establishing direct relations is not without risks, and requires safeguards for employers and subcontractors alike. Those are set out in the last section of this article, but it is important to understand the pitfalls, particularly of direct payment, first.