Twin Butte Energy Ltd TBTEF

RE:Remember this is not "Normal"

[cigarbutt1]

Manthebull,
So 2 questions.I will give them a try.
With this investment, there have been a lot of unusuals. For some details, it was, at least for me, learn as you go.

1-Cash on hand as last reported by Receiver.
My understanding (thanks to Oldfart) here is that with the effective date (Dec 1, 2015), the accounting books have closed (before "closure" of the transaction which should occur any day now). Going forward after the effective date there are two entities, the buyer and the Receiver/debtor TBE. Interestingly the Receiver intermittently reports cash on hand and financial info that is cash flow in nature (ie not accruals) but some cash flows belong to the Receiver/debtor TBE entity and others belong to the buyer (if the transaction eventually closes). What this means is that the last cash on hand does not automatically belong to the Receiver/unsecureds. Perhaps you want to do some estimations but my take is that the cash on hand reported in early January probably corresponds +/-  to the end balance cash on hand belonging to the Receiver/debtor TBE at the end of the process. Why? Because my take is that the early January results contained some cash flows that belonged to the buyer entity (those need to be removed) but did not include cash flow to come that belonged to R/TBE. Remember also that the Receiver has top priority to pay itself when the time comes. This, in the end, was a necessary cost, but it is likely to be high. Unfortunately, it is part of the cost of distress alluded to before.

2-What will happen if this investment is in our registered accounts?
If you are still with me here, perhaps interesting to look at scenarios. When I reflect on TBE, I would submit that it was critical to look at all scenarios before committing capital. Perhaps the same apply here. After, there are 3 relevant links. The problem is that the taxman has not exactly described what happens in our scenario ie it is not expected that a debenture trading on a CDN exchange can become delisted because of distress and then result in significant capital gains. If you read the info, an argument coulld be made that our investment became non-eligible triggering significant tax payments even potentially a 100% tax rate...

https://www.scotiabank.com/itrade-learning/TFSA_Account_output/story_content/external_files/TFSA.pdf
esp. p19-20

hhttps://ca.rbcwealthmanagement.com/documents/51871/51891/HowTheTFSACanHelp.pdf/c161304c-dde4-4f26-a0de-e48139cf308f
p.4

https://business.financialpost.com/personal-finance/tfsa/are-you-sure-you-can-invest-that-in-your-tfsa?__lsa=517e-f5a5

Our investment (debenture) delisted. Awkward.
I've had a few related exchanges with the CRA about similar investment results in the past. They tend to notice sigma events. If they come after us, I suggest that you be ready. I've found that they are open and flexible when you can rationnaly explain the substance of an investment thesis with documentation. Of course, if you invested in TBE.DB with a day-trader speculative mentality, perhaps a TFSA is not the place to be.
Sorry for the length of the explanation. Good luck