(Canadian Insolvency Terms - updated to August, 2000)

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Pari Passu:
Latin - equally and without preference.  This term is often used in bankruptcy proceedings where creditors are said to be paid pari passu, or each creditor is paid pro rata in accordance with the amount of his claim.

An action that has to be taken before a security interest is secured.

The application made under the Bankruptcy and Insolvency Act for the Court to hand down a Receiving Order stating the person is in bankruptcy.

A person who initiates a case in Court.  That person may also be referred to as the Claimant, Petitioner or Applicant.  The person who is being sued is generally called the Defendant or Respondent.

Possession Date:
That time that is mutually agreed that the person buying property will take ownership, control or possession of it.

PPSA - Personal Property Security Act:
The system in British Columbia, whereby a person is required to register any interest that he has in the property of another before the security is valid.  The Registry can therefore be used if an institu-tion is considering taking security on various assets, or if a person is contemplating purchasing an item such as a vehicle and wants to ensure that he purchases it free and clear of any encumbrances.

Preference or Preferred Creditors:
Those creditors, in the Bankruptcy and Insolvency Act specified in Section 136, that rank ahead of ordinary or unsecured creditors.  Some preferred creditors are employees for wages, and a landlord for some specified rental arrears.

The term given to the fact that the information is in a directive issued by the Superintendent of Bankruptcy.

Prima Facie:
Latin - on the face of it or at first sight.

Pro Rata:
Latin - to divide proportionately amongst people having a claim.

Pro Bono:
Latin - provided for free.

Promissory Note:
An unconditional, written, signed promise to pay a certain amount of money on demand or at a certain date defined in the future.

Under the Bankruptcy and Insolvency Act there are two types of proposals that can be made.  A proposal filed under Division I, which is applicable to companies and any individual who wants to avail himself of it.  There are also "consumer proposals", which are a special type of proposal that a consumer can avail himself of but only if his debts, excluding mortgages on real property, do not exceed $75,000.  One of the main features of a consumer proposal is that if the creditors do not accept the proposal, the person is not automatically bankrupt as in a Division I proposal.

Provable Claims:
All those debts of a bankrupt outstanding as of the date of the bankruptcy.

Proven Claims:
Claims that have been filed in the proper manner with evidence to prove what is owed and subsequently accepted by the Trustee in Bankruptcy and used as the basis for the payment of dividends when there are monies to distribute.

Under the Bankruptcy and Insolvency Act a written statement can be made whereby a creditor appoints another person to act on his behalf in a creditors meeting and any other matters pertaining to that bankruptcy.

Purchase Money Security Interest (PMSI - pronounced "pimzee"):
A security that a person takes in property, such as inventory for example, that secures payment with regard to those assets of all or part of its purchase price.

 Latin - amount.

Quit Claim:
A deed releasing interest in real property.  Sometimes, when a Trustee has real property vested in him pursuant to the bankruptcy and there is no equity in that property, he may quit claim it to the mortgage holder, thereby saving the mortgage holder time and expense.  The Trustee should charge the mortgage holder for executing this deed.

Under the Bankruptcy and Insolvency Act there must be one person present, either in person or by proxy, at a meeting of creditors before the meeting is considered to be a properly constituted one and hence can carry on with the business of the meeting.

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