Bankruptcy Bono has been trying to make a career as a musician and public spokesperson, but things
Question:
Bankruptcy Bono has been trying to make a career as a musician and public spokesperson, but things have not been going well lately. Although Bono has a very nice home, he also keeps an apartment in Winnipeg, MB, that he stays at most weekends during the summer. He has failed to pay the $850/month rent on his apartment for the past six months, and he still has another four months to go on the lease. At a recent show in Montreal, Bono's bass player, Adam, fell off the stage. Adam was Bono's employee, and Bono still owes $20,000 of Adam's worker's compensation award, to go along with $5000 in back-wages. Deeply depressed by all of his financial troubles, Bono decides to order a new pair of Luis Vuitton Attitude Pilote Piiante sunglasses for $2450 (http://ca.louisvuitton.com/eng-ca/products/attitudepilote-piiante-005120). He also decides to go for a drive in his Maserati Quattroporte. As a rock star, Bono feels that he is entitled to go faster than the speed limit, and gets into an accident. The mechanic repairs the vehicle and gives Bono a bill for $2800. Because Bono cannot pay it, the mechanic decides to keep the car until he does. With all of his debt piling up, Bono's bandmate, Larry, advises him that bankruptcy might be the way to go. Bono likes the idea, but he decides to protect his favourite guitar, which is valued at $10,000, from the proceedings by giving it to another bandmate, The Edge, before filing his papers.
One month before his new sunglasses arrive, Bono files for bankruptcy. Six months later, a trustee has been assigned. In addition to anything listed above, the trustee finds the following debts:
Bono has a three mortgages on his luxury home (which is valued at $750,000) listed on his title in the following order: CIBC for $525,000, BMO for $250,000, and Crocus Credit Union for $125,000.
Bono's Maserati was purchased for $115,000, but has a depreciated value of $80,000.
The car has a registered conditional sales agreement on it in the amount of $87,200.
General Security Agreement in the amount of $8000, which was used to help finance the promotion of his new album. $12,550 in municipal taxes owing for his house.
$10,000 in income taxes owing from last year.
The trustee is to be paid $30,350 for her services.
$20,000 owing on his MasterCard account.
In addition to anything listed above, the trustee finds the following assets:
Collection of designer sunglasses worth $30,000 (not including the new Luis Vuitton glasses).
RRSP in the amount of $88,000. An original painting by Banksy, valued at $90.000.
How much money is left for unsecure debt? and what is the amount for each unsecured creditor?
Expert Answer:
To determine how much money is left for unsecured debt and the amount for each unsecured creditor we ... View the full answer
