In a Proposal, the assets of the business stay with the owner. Accordingly, the business is
operated by its owners in the normal course until creditors vote on the Proposal. If the Proposal
is accepted, then control remains with the owners of the company. In a bankruptcy or
receivership scenario, control of the assets and business premises transfers to the Trustee who
takes an inventory of the assets, insures them, has them valued and determines the most effective
way of selling them. The Trustee/Receiver will also decide, usually after consultation with the
debtor and creditors whether or not the business operations should continue during the
bankruptcy or receivership. Many factors are considered including the potential for selling the
business as a going concern, the possibility of realizing a higher return by completing work-in-process, and other matters relating to preservation of the value of assets including the accounts
receivable.
