Describe the steps taken by Sid and Nancy immediately prior to the bankruptcy that may be offences under the Bankruptcy and Insolvency Act. What is the legal term used to describe each of these steps (events)? Sidney Greenwood and Nangy Fitzgerald had worked for National Business Systems, an intemational computer repair service, for ten years. It therefore came as a surprise when they both received lay-off notices on a Friday aftemoon late in December 2010. Both were given severance packages that matched their seniority so they decided that this might be the catalyst to launch their own business repairing computers and related equipment for businesses in their community. Both were single, so no one else would be affected if the business failed. Sidney had graduated from a community college with a diploma in computer technology while Nancy had left high school after grade twelve, having taken several business courses prior to graduating. They decided to establish a partnership and to call their firm Compact Business Systems, closely mimicking a large successful firm in another city called Compaq Business Systems, Since they had no plans to expand their business beyond their own community, they did not believe that the similarity in names would pose a problem. In fact. Sidney and Nancy so admired the colours used in the Compaq Business Systems' logo that they used similar gradient tones of red on all their signage and advertisements. Sidney and Nancy also named their premium same day service: "Presidio Service" (a name similar to, but not exactly the same as, one already trademarked by Compaq Business Systems) and this became their most popular standard of service outselling their three day "Invest Service" by a margin af two to one. Sidney and Nancy gave no thought to the non-competition clause they had signed with Nationa! when they were hired. All employees of National were required to sign a non-competition covenant stipulating that they would not work for a competitor or start up a competitive business within three yeanrs after leaving National Business Systems. There was no geographic restriction contained in the non-competition clause, as National Business Systems had customers all over the world. In considering their start up costs, the pair determined that they would need a small shop to conduct their business from, some testing and repair-equipment, a modest inventory of electronic components and a delivery van to pick-up and retum equipment they would repair. They would also need to do some advertising in the local newspaper to get their name in front of the public. Pooling their resources they found they had a shortfall in start-up ecapital of some $50.000 Because neither Sidney nor Nancy owned a home or had any appreciable assets, the bank would not lend them the money without a guarantor. Nancy's uncle Fred was fairly well established and agreed to sign a continuing guarantee for the necessary funds, insisting that "this was as much as he was prepared to 'be on the hook for", so they better make do." This limitation however, was not written into the agreement with the bank, nor was the bank made aware of it. Compact Business Systems opened for business on March 1, 2011. In the first couple of months after start-up the business was going extremely well. On April 15, 2011, one of Compact's customers - Lucky Accounting - delivered one of its (Lucky's) desktop HQ computers to Compact. Compact was asked to upgrade the computer and install a new operating system known as Vulnerable. When Lucky's employee returned to Compact on April 21" to pick up the HQ computer, Compact informed the Lucky employee that he was out of luck because the HQ computer had been stolen in a break-in the night before. Neither Compact nor Lucky had any insurance coverage on the HQ computer. Compact had installed surveillance cameras in the store and there was a sign on the door identifying an alarm company. In order to save money, however, Compact had stopped paying for the alarm monitoring and the Surveillahce cameras were just dummies. Compact's desk clerk calmly explained to the Lucky emniame thot tha lee wne nnt Comnant'e fool The amnlovee heniamaan Lucky had any insurance coverage on the HQ computer. Compact had installed surveillance cameras in the store and there was a sign on the door identifying an alarm company. In order to save money, however, Compact had stopped paying for the alarm monitoring and the surveillance cameras were just dummies. Compact's desk clerk calmly explained to the Lucky employee that the loss was not Compact's fault. The Lucky employee became very angry but she was not able to obtain any satisfaction from Compact. When Compact upgraded computers, this often involved not only changing the hardware but also adding additional software. Shawna, a mature looking17 year old high school student, brought her computer into Compact's. Shawna's computer had not being working well lately and she had absolutely no idea why that was the case. Compact's desk clerk advised Shawn that the only way to improve the computer would be for her to purchase Compact's Deluxe Upgrade Package for $750.00. Shawna, under the urging of the desk clerk, agreed and signed the work order. Shawna picked up her computer a few days later. Once she had her computer at home it worked perfectly. When her parents returned home and found out how much she had spent to repair the computer her mother called a friend in the computer repair field who advised her that the repairs should have cost no more than $200. About a week after Shawna had visited the store, Nancy, who happened to be working at the counter, spotted a customer behaving strangely. Upon closer observation she saw him slip some small computer components into his pocket and move towards the exit. Nancy got another clerk who was in the back working on some computers and, after the customer had left the store, Nancy and the clerk approached him and demanded that he empty his pockets. The customer refused and Nancy demanded that he come back into the store while she called the police. Intimidated by the other clerk (whose nickname was "Moose") and believing that he had no choice but to comply he accompanied them into the store. He was placed in the break room and the door was closed. He waited until the police arrived and was subsequently arrested and charged wilth theft. Later that day a long term customer, known to his friends as "Shady," brought his computer to Compact. Shady had heard that Compact would install software (named FreeFromITunes), created by a company called Sketchysoft, which would allow Shady to download music and movies from itunes.com without payment. Compact installed this software and Shady paid the $400.00 fee. When Shady got his computer home he realized that FreeFromITunes did not work at all and, in fact, resulted in Shady being charged double for each download. Sidney and Nancy called on several of National Business Systems customers and persuaded several to switch their business with offers of reduced service charges and faster turn-around. Sidney and Nancy were particularly proud that they were able to persuade the regional office of 2. International Tire Inc. to bring all their computer repair work to Compact. International Tire Inc., who was National Business Systems largest customer, was in the 3" year of a 5 year service contract with National Business. Nancy was also quick to point out to those she called on that she had long suspected National Business Systems of overcharging its bigger customers and using off-shore components of inferior quality in their repairs. Needless to say, many of National's customers were eager to switch their business in favour of the lower prices offered by Compact