RECENT STUDY SAYS TRUSTEES AND lawyers, not creditors, stand to benefit the most from Canadian corporate bankruptcies. Conducted by author Jocelyn Martel, an academic with the Centre interuniversitaire de recherche en analyse des organisations in Montreal, the study found that administration costs accounted for more than 44% of the book value of assets in a random sample of 417 commercial bankruptcies filed between 1977 and 1987. Meanwhile, the payoff rates for preferred creditors and unsecured creditors, on average, were 23.18% and 2.53% respectively.
Although the Bankruptcy and Insolvency Act limits a trustee's fees to 7.5% of the realized value of the debtor's property, the …
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