June 14th, 2007 by Questions
I am a 1/3 owner of an incorporated company. Will my company be affected if I go bankrupt?
June 15, 2007 at 9:35 am, Barton Goth GCO Bankruptcy Trustees said:
Indirectly yes. Firstly while in bankruptcy federal and provincial law indicate that you are no longer eligible to be a director of a limited company while you are in bankruptcy, so if you are a director then you must resign.
Secondly, the ownership of shares is an asset, and an asset that is lost during bankruptcy. So your shares would have to be valued and sold at fair market value. You could look into re-purchasing these shares from your trustee if interested, or perhaps your partners could look at buying your shares out.
Also a word of caution, any dispursement or transfer of these shares prior to filing a bankruptcy can get you into a great deal of difficulty, so you are best to contact a trustee and make the necessary arrangements to deal with these shares.
The other alternative is to look at filing a consumer / division 1 propsal instead, then you don’t run into either of these issues.
At this point you need to contact a local trustee develop a strategy to deal with the shares with the least level of obtrusiveness.
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