INSOLVENCY DICTIONARY
(Canadian Insolvency Terms - updated to August, 2000)

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Fair Market Value:
That hypothetical value of a piece of property, given a willing purchaser and a willing vendor, and a reasonable amount of time for the property to be exposed to sale.

Fee Simple:
Title to ownership without restriction or limitation.  For example ownership of land in fee simple means the land is owned out right as compared to a person who leased land.

Fiduciary:
Sometimes considered to be synonymous with the word Trustee.  A fiduciary holds certain rights which he or she must exercise for the benefit of the beneficiary.

First Meeting of Creditors:
The meeting called by the Trustee in Bankruptcy to consider the affairs of the bankrupt or a debtor under a proposal.  NOTE: Under the Bankruptcy and Insolvency Act, as amended on September 30, 1997, there is not a meeting of creditors required for simple personal bankruptcy cases, unless the Superintendent of Bankruptcy or creditors holding 25% of the proven claims request one.

Fixtures:
Those assets that are attached to or are part of a building, or are fixed to land.

Floating Charge:
A type of security interest that charges the debtor's property but does not specify particular assets or pieces of equipment until the security interest or instrument is crystallized.

Foreclosure:
That action that a lender will take to repossess and sell a piece of property for defaults in mortgage payments.

Fraudulent Preference:
Under the Bankruptcy and Insolvency Act, this is the preferring by a debtor of one or more creditors over others by the payment to those creditors of some extraordinary amounts of money.
Under the Bankruptcy and Insolvency Act, the Trustee can, under certain circumstances, set aside fraudulent preferences up to three months prior to the date of bankruptcy in the case of arm's length parties and one year in the case of non-arm's length parties.

Fungibles:
Goods which are comprised of many identical parts.  For example, a bushel of grain, a barrel of apples or oil, which can be easily replaced by other identical goods.  One of the tests of whether items are fungible or not is whether they can be sold by weight or number.

Garnishee:
The seizure of property, monies, earnings, receivables belonging to a debtor that are in the hands of a third party.

Goodwill:
That value attributed to a business that is not tangible, but arises from the reputation, expertise, service or some other intangible that attaches to the business and makes it have more worth than just the value of its assets.

Guarantor:
A person who pledges collateral for the contract of another or who guarantees to pay a certain debt of a debtor if the debtor defaults..

Hypothecate:
To mortgage or pledge without delivery of title or possession. To place or leave an item of property in the custody of another.

Indefeasible:
A right or a title in property that cannot be made void or cancelled by any past event, error or omission in the title.

Indemnity:
The act of one party protecting or guaranteeing protection, or freedom from liability, of a third party for actions of that party.

Insolvent:
A person not able to pay debts generally as they become due.

Insolvent Person:
A person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims amount to $1,000.

Interim Order:
A temporary Court Order intended to be of limited duration, usually until the Court has had an opportunity of hearing the full case and the opportunity of making a Final Order.

Interim Receiver:
A person appointed by the Court to be a watchdog regarding the assets of a debtor during that time between the application to the Court for a Receiving Order and the time where the Receiving Order is handed down.  An Interim Receiver may also be appointed where a secured creditor is about to send out, or has sent out, a Notice of Demand under the Bankruptcy and Insolvency Act of its intention to enforce its security, or the debtor has filed a Notice of Intention to Make a Proposal or has filed a proposal.

Interim Dividend:
A dividend paid to creditors before the estate is finalized.

Interplead:
The placing of funds in the Courts by a person when there are two or more competing claims for those monies.

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