Ratner's Service Centre encountered financial set backs over a period of time,and eventually found itself insolvent.Among its creditors were the first and second mortgagees of the land and building which Ratner's owned,trade creditors,employees who had not been paid wages,and the municipality,for arrears of property taxes.Ratner's decides not to make a proposal to its creditors.Any funds remaining after the claims of the employees,the trustee,and the municipality,would be distributed to the trade creditors.

Question

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Ratner's decision not to make a proposal to its creditors means that it will likely be forced into bankruptcy. In this case, the distribution of any remaining funds will be determined by the Bankruptcy and Insolvency Act, and trade creditors may not necessarily be the first in line to receive payment, depending on the priority of the different types of claims.

Ratner's Service Centre Encountered Financial Set Backs Over a Period