Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Trading with Canadians in Times of Bankruptcies and Insolvencies

I have recently been asked a number of questions about how to deal with the reality - the world's economy is down, and bankruptcies, insolvencies and restructurings are up.  Shippers, importers, exporters, brokers, manufacturers, etc. are all are being impacted by the economy.  

International trade must continue during these poor conditions --- otherwise, the world economy will not improve.  If you are involved in international trade, you need to know about bankruptcy, insolvency and restructuring laws in a number of countries, including Canada -- how it works, how to invoke it when you need to, and how to protect your assets as a creditor. 

If you have not considered the laws for the down economy before, you will find some of the rules counter-intuitive.  Bankruptcy & insolvency / restructuring laws are as arcane as import and export laws would be for the average human.  

Some of the rules relating to income taxation, sales taxes, customs duties, etc. depend on the person seeking relief having the proper paperwork - would you like to know what is the proper paperwork so that you have it when you need it?  I am working on a file right now when a U.S. company has acquired goods from a Canadian company who is now in the middle of restructuring (actually winding down).  The U.S. company is not registered for goods and services tax purposes -- because they are located in the United States and did not need to be registered for GST purposes.  The U.S. company received goods from the Canadian company.  Given the lack of paperwork relating to the exports, the U.S. company is going to have to pay 5% GST and will not be able to recover that money.  This same U.S company may be charged an additional 8% Ontario retail sales tax or harmonized sales tax (8%).

Each situation is different and we would be pleased to help.  Please call Cyndee Todgham Cherniak at 416-307-4168.  Our role will be to help you deal with the rules if your Canadian supplier or buyer is experiencing financial difficulties, how you can protect your receivables, how you can work within the rules to ensure payment if a buyer gets into financial difficulties, how to get your pre-paid goods if a supplier gets into financial difficulties, etc.

Leave a Reply

remember my information