Lites Inc. has other legal problems. The local municipal taxes are 24 months overdue and the federal government is owed $30,000 in CPP and EI contributions that have not been paid for the past year. Ion Electric is one of their biggest suppliers and it is owed $70,000. The TD Bank has a $600,000 loan that was backed with a general security agreement and they have not been paid for 3 months. There are 30 workers who make $800 per week who have not been paid by Lites for the past 5 weeks. Lites shareholders had not received a dividend in 2 years, so the Directors just paid them dividends totalling $50,000. Some of the creditors have threatened to force Lites into bankruptcy. Lites wants to stay in business but is not sure if this is possible. Discuss fully what options Lites has and what would happen to Lites Inc. if it is forced into bankruptcy. Outline the steps and the rights of the creditors in this process.

Explain the legal issues and the rights and remedies