Agriculture committee  Thank you. Mr. Chairperson and members of Parliament, you will be aware that I appear before the committee, as requested by the chairperson, as a result of my role as the originator and drafter of the proposed fresh fruit and vegetable products protection act. You'll also be awa

Agriculture committee  It's done on a prorated basis. The act would say that essentially the court would take over those assets or appoint somebody to take over the assets and the money would be distributed on a prorated basis, so that they would get a portion relative to the amount of debt owing to ea

Agriculture committee  Yes: insolvency necessarily, not always bankruptcy, because there could be insolvency proceedings, but yes, essentially the buyer has ceased operation.

Agriculture committee  That's a very good question. The way the act is structured is simply this. It says that any product received by that buyer, and it could be, in this context, from several sellers, or any of what we call the proceeds of that product...and this is more likely to be the case, the ac

Agriculture committee  Maybe we can boil it down to a very simple situation. We have our buyer, who has resold to someone else who, for one reason or another, hasn't paid that buyer. That is an account receivable owing to the buyer. Of course, if that account receivable is worth nothing because of th

Agriculture committee  Well, I didn't hear their testimony on that point, but forgive me, I don't understand what they would be talking about. No doubt it would be a problem to put this into the Bankruptcy and Insolvency Act, but as a stand-alone act it's no different from what the Americans have. They

Agriculture committee  I'm sorry?

Agriculture committee  Oh no. I haven't. I'm sorry. I haven't been dealing with that. I've been dealing through Mr. Webber, for whom I'm working, but no, we haven't had those. We did have a conference call meeting, I guess, with bankruptcy lawyers from Industry Canada, as it was then. I don't want to s

Agriculture committee  Yes. That's a very good point. Let's take two scenarios, one scenario in which this act doesn't apply, in which the act isn't passed. What happens when that buyer goes bankrupt? Well, the suppliers, the sellers, will all have a claim in the bankruptcy, but the problem, of cour

Agriculture committee  Oh, oh!

Agriculture committee  Thank you.

Agriculture committee  Of course, I can't speak for the U.S. Department of Agriculture, but I think the answer to that is we would have, if this act were passed, a system very much like theirs. In other words, their system is based on the trust concept, and so would our system be, so that their people

Agriculture committee  Yes, maybe we can carry on with the scenario Mr. Shipley raised, that is, without this act, the suppliers would be just regular unsecured creditors of the bankrupt. They would share on a pro-rated basis with all of the other unsecured creditors of the bankrupt buyer. Under this

Agriculture committee  I think the only group seriously affected would be the secured lenders who take security interests in those accounts receivable. Of course, it's not for me to say, but this would be a policy decision. If Parliament should go ahead, it has decided that on the one hand there's an

Agriculture committee  You'll have to forgive me; that is more of, I suppose, a political issue than a legal one. Why they weren't able to come up with something, I don't know. I did see a lot of study papers that were prepared exploring different approaches to this, but in all cases there was still th