Royal LePage Innovators Realty ~ Brian Richard Madigan LL.B.

PROFILE


Mr. Madigan graduated from Osgoode Hall Law School and practised law in Toronto for over 25 years. He has provided legal advice and acted for numerous clients including:



Purchasers,Vendors and Mortgagees

Investors, Pension Fund Managers

Property Managers and Insurers

Real Estate Developers and Builders

Contractors, Engineers and Architects

Mr. Madigan has broad based experience in the real estate industry having processed over 5,000 transactions, many of which involved contentious legal proceedings.

Although he brings the experience of a litigation background to his dealings, his role as an Arbitrator, Mediator and Chairman of Tribunals and Advisory Boards established by under the Canada Pension Plan and the Ontario Insurance Commission enable him to facilitate compromise and effectively negotiate satisfactory resolutions. Mr. Madigan employs innovative strategies to achieve superior results in difficult circumstances.

Mr. Madigan served as an Instructor and Lecturer in the Bar Admission Course and Continuing Education programs offered by the Law Society of Upper Canada and has published legal precedents relating to various types of real estate transactions. In real estate matters, Mr. Madigan offers litigation support services to law firms, realtors and consultants. He continues to write articles on the real estate industry which are published in local newspapers.

Prior to joining Royal LePage Innovators Realty, Mr. Madigan was a partner in a successful venture capital business providing advice and assistance to entrepreneurial Internet based businesses.

The community has served been well-served over the years by Mr. Madigan's contributions as a volunteer and Board member in numerous organizations including St. Michael's Hospital, Credit Valley Hospital Foundation, Erin Mills Baseball Association, the Learning Disabilities Associations in Peel Region and many others.


Areas of Expertise

I practised law for over 25 years, primarily in the health care, pension and insurance sectors. My role consistently brought me into the real estate business, advising clients on the acquisition, disposition, and investment in real estate.

These three sectors encouraged me to learn as much as possible about succession planning, financial planning, tax planning, investment returns, and risk management. I have now applied these skills to real estate, and I am hopeful that my experience can be put to good use for you.

Over the last 20 years, I have participated in several venture capital and real estate companies with a primary interest in investment, management, and development of real estate.

I joined Innovators Realty Inc. in October 2005. I am working in both the commercial and residential fields. I have a wealth of experience to draw upon, including over 5,000 transactions involving real estate. I have provided professional advice to the following:



· Purchasers, Vendors and Mortgagees

· Investors, Pension Fund Managers

· Property Managers

· Real Estate Builders and Developers

· Contractors and Architects

• Insurers


The principles of real estate investment and achieving superior returns are relatively straightforward. The difficulty is applying them in particular transactions.

I believe that it is my role to ensure that my clients will make sound and informed decisions concerning the purchase and sale of property.

Special Interests

Nursing homes and retirement homes

farms for conversion to subdivisions

Commercial plazas

Businesses for sale or disposition

real property with complex legal issues

classes and training provided for real estate students, coaching, tutoring and mentoring programs

Brian Madigan LL.B., Sales Representative,
Royal LePage Innovators Realty
(905)796-8888

www.OntarioRealEstateSource.com

Royal LePage Innovators Realty ~ Brian R. Madigan LL.B.

Brian Madigan is pleased to announce that effective 5 May 2009 he has joined the real estate professionals at Royal LePage Innovators Realty.

Present and past clients are encouraged to contact him through the Royal LePage Innovators office at the numbers noted below:


Brian Madigan LL.B. (Sales Representative)
Royal LePage Innovators Realty (Brokerage)
(905) 796-8888 (tel)
(905) 796-8899 (fax)

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

The Bulk Sales Act (Ontario)

By Brian Madigan LL.B.

You might wonder about the application of the Bulk Sales Act in Ontario.

What is the purpose of the legislation? Who is it designed to protect?
What impact does it have on a transaction? Why is it often ignored?
And, why is “just let the lawyers worry about it; the incorrect answer?

The Bulk Sales Act is rather old legislation. Generally, it is designed to protect unsecured creditors when a business is sold. If a transaction does not comply with the provisions of the Act, then creditors can have the transaction set aside. That’s a very powerful remedy!

Realtors should be concerned, since there is a specific requirement under the Real Estate and Business Brokers Act, 2002, to have them obtain certain information in an effort to comply with the Act. Who are the creditors? How much is owed to each of them and are they secured or unsecured.

While the legislation applies in Ontario, most Provinces and States do not have similar protective legislation. It still exists in Newfoundland, but all other Provinces have repealed the legislation.

The term “stock” is a defined term under the Act. Frequently, in business and commercial terms, stock is simply another word for inventory. However, that is not the case under the Bulk Sales Act. There is an expanded definition.

Stock comprises three categories:

1) commercial products, (goods ordinarily resold in the market)
2) production of the facility, (manufactured goods)
3) fixtures, goods and chattels used in the business.

In a bulk sale, the Act will also apply to everything else that goes with the sale both real and personal. So, the lease of the premises and the lease of the delivery truck would be included.

The question, in terms of application of the Act is whether the sale itself is usual, as being in the ordinary course of business, or a bulk sale which would be “out of the usual course of business”:

Usual sale ~ Act does not apply

Out of the Usual sale ~ this is a bulk sale, Act applies

The frequency in turnover of inventory is one item. If you are in the car business, and you sell a car on the lot to a consumer, that would be expected. If you sell 10 cars on a Saturday at your advertised deep discount festival, then that’s still “usual”.

However, if you have 100 cars in your inventory and you sell 90 to another dealership, then, that’s unusual and the bank which holds security over your inventory needs to be notified. The bank is expecting that you will ordinarily have 80 to 120 cars on your lot. If they arrive to realize on their security and find that you sold 10 to consumers and 90 to the other dealership, then there is a Bulk Sales Act compliance issue. Failure to comply with the Act could result in forfeiture of the 90 cars to the bank by the second dealership.

In order to determine whether a sale is usual or out of the ordinary, you would have to look at the facts in each particular case. Certainly, what’s usual for one business might be unusual for another.

The substantial concern in a bulk sale is the risk of non-compliance. If the transaction does not comply, then the transaction can be set aside.

Recently, the Courts set aside a transaction because it failed to comply with the Act. All the money had been paid to the secured creditors. Had the transaction been completed in compliance with the Act, then, all the money paid on closing would have been paid to the secured creditors. And, that’s just what happened! But, with one little exception, there was no compliance with the Bulk Sales Act.


You might think that is just a technicality, but, the Courts set aside the transaction at the instance of the unsecured creditors and forced the purchaser to “re-buy” the business. Remember, that the first time the purchaser bought the business, they paid off all the secured trade creditors. So, now they’re gone; and you can’t use that money as a setoff. The result was simple: the purchaser bought the business twice, the second time paying off all the unsecured trade creditors.

In our car dealership example, other unsecured creditors would have been similarly protected. That means if there were additional unsecured creditors, (not just the bank as a secured party), then they may have to right to set aside the transaction.

So, make sure that you comply with the Bulk Sales Act if you are buying a business, or advising someone who is buying a business.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com