FormerXBC Inc XEBEQ

SCOTUS decision-fraudulant actions hiding behind bankruptcy

[rltchk]

Not suggesting any wrongdoing but good to know that courts in the US take a dim view of using bankruptcy proceedings to avoid liability.

Not so sure about Canadian courts since according to financial legal experts "One of the benefits of incorporating your business in Canada is that you can protect yourself and your personal assets from any liabilities. If you're incorporated then, generally speaking, neither you nor your employees are personally liable for any actions taken while working on behalf of your business" and "Canadian courts have held that such fiduciary duties are owed by directors to the corporation itself, rather than to the shareholders of the corporation". Not sure if shareholders are protected at all under Canadian Securities legislation.

Seems like the US has more protections for shareholders

• The Supreme Court unanimously ruled that a woman could not use protection under the U.S. bankruptcy code to avoid paying a debt that resulted from fraud by her partner.
• The court said that the California woman, Kate Bartenwerfer, owed the debt even if she did not know or could not have known about her partner's fraud.The 9-0 ruling, written by Justice Amy Coney
• Barrett, underscored a Supreme Court decision in 1885 which found that two partners in a New York wool company were liable for the debt due to the fraudulent claims of a third partner even though they were not themselves "guilty of wrong."

Seems that only filings in US would have some success for shareholders if the BOD is incompetent and reckless in their running of a business.