Twin Butte Energy Ltd TBTEF

RE:act 66.7(1)

[kasparovisme]

Wow. hey I until lately really restrained myself from commenting on the TBE posts. For an unknown reason( I reflect upon that later) I have decided to comment. 
 Finding lines and sections of Income Tax act show diligence, yet can lead you down a rabbit hole unless one would read all additional supporting referenced sections as well as any previous determinations,   Usually income act makes common sense, and I do not see it diverging in this instance. 
What you are proposing goes against Common Sense,  since most will fall asleep if I was to start reiterating tax code. Let's use an analogy, 

for or this instance it will get the idea across.

lets say TBE goes and buys a broken down house that they intend to rent. They then spend 500 million fixing it up,  in some cases they may be able to deduct  100% or 30% of expense against income generated from said house.Time goes by and rental market drys up and TBE finds themselves unable to meet payments. Low and behold they enter BIA . House is sold for 250million to HOC.  HOC finds a great renter, they rent house from HOC, and they are making money.Now HOC did not have to fix up property to rent,
DOES IT MAKE SENSE  that they should be able to shield 500million of new income from tax when they only bought property for 250mil? I think not.

 Now let's say HOC bought house for 250 million , from courts. Money was paid into courts. Secured lenders are owed 205 mil and getting additional interest daily,   Since it may take time to figure out who get what exactly, You do know without a doubt that you owe 205 + interest to lenders, if you wanted to save money for other creditors you would pay off secured ASAP and save on the interest.
now what if creditors know they can walk away with 45 mil and  no further recourse to recover balance,all they could hope for would be 45 mil, yet HOC begins to think that hey if I own the shares of TBE I can shield 500 mil of my income from tax. Will they sell me their shares. I think I would now need to make a proposal say hey lenders you can have 45 now or sign this paper saying debt are settled in full and I will give you another 10 mill.  That means you would get 55 instead of 45. At the same time I can make offer to shareholders of TBE that you can walk away with 0 as you owe more than u have or I can give you 15 mil  worth of my shares in my company,  the only caveat would be you both need to agree.  So let's take a vote.

Thus effectively you would have a merger, HOC can shield upto 500 mil of income generated from previous TBE assets. (The house) 
This make common sense as per tax rules.
What do you think?