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Bankruptcy Terms D-E


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Deemed Trust


A trust that is established by statute to be in effect even though there may not be any actual asset or monies held in that trust. For example, Revenue Canada in a bankruptcy or insolvency situation takes the position that it has a deemed trust covering source deductions that they claim rank even ahead of certain secured creditors.

Default


Failure to pay or otherwise perform obligations under a contract.

Disallowance


To refuse or to set aside. For example, the Trustee in Bankruptcy, under the Bankruptcy and Insolvency Act, can disallow a claim submitted by a creditor.

Disclaim


The act of denying, refusing, renouncing or repudiating an interest that one might have in some item.

Dissolution


The act of ending, terminating or winding up of a company or state of affairs.

Distraint


The right that a landlord has to seize the property of a tenant on the premises being rented and sell that property for payment of rent arrears.

Dividend


Under the Bankruptcy and Insolvency Act it refers to those monies paid by a Trustee in Bankruptcy to the creditors.

Easement


The right held by one person to make use of the land held by another person for a limited interest. For example, a utility may have an easement over a piece of real property which allows that utility to have, for example, electrical power lines running over that property.

Encumbrances


Those charges or the security that attaches to any kind of property. For example, if there is a mortgage on a piece of property, then the property is said to be encumbered by that mortgage.

Equity


This refers to the excess that the value of a piece of property has over any charges or encumbrances against that piece of property.

Escrow


The holding on to of money or a written document, such as shares or a deed, until certain conditions are met by the two contracted parties.

Ex Parte


Latin - for one party only. Ex parte refers to those proceedings where one of the parties has not received notice and therefore is neither present nor represented.

Examination For Discovery


A legal proceeding whereby one party examines the party on the other side, usually under oath for the purpose of confirming facts and perhaps obtaining admissions from that other party.


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