"Pistol" Pete Piselli is the flamboyant owner of the Toronto Seals Football Club of the upstart XCFL league. Pistol, the owner of a chain of successful restaurants, sees the football team as a vanity project. He enjoys the notoriety that comes with owning a professional sports franchise. He has registered the team as a corporation and has trademarked the team's name and logo. Pistol licences the team merchandise to a local company, Champware, which sells t-shirts, footballs, and other fanware with the Toronto Seals name and logo imprinted on it. In return, the team gets a licensing fee that is paid monthly by Champware.

Pistol has a 10-year lease with the City of Toronto for Lamport Stadium. Locking in for the longer term gave Pistol preferential rent terms. Pistol has also negotiated the rights to all concessions, (such as beer, soft drinks, popcorn, and hot dogs), sold at the games.

In 2018, Pistol decided to build a state-of-the-art team practice facility north of the city. It is his hope that with this new facility, he will be able to attract the best athletes to sign a contract with his team. Pistol signs a construction deal with McKenzie Construction to be the general contractor of this project.

After a horrific injury to the Seals' star quarterback during the 2019 pre-season, the team puts up a dismal 2-14 record for the season. Not wanting to watch such a terrible performance, attendance at the Seals games becomes sparse. With ticket and concession revenue slowing to a trickle, Pistol starts having trouble financially.

After the 2019 season is over, McKenzie Construction approaches Pistol seeking payment on the nearly completed practice facility.The facility looks fantastic, and it is everything that Pistol hoped it would be.Pistol has been hearing rumours that many of McKenzie's sub trades are grumbling about not being paid for their work and materials on time.

When Pistol pays McKenzie Contracting, what should Pistol do to ensure that the subcontractors are also paid? Would there be any consequences to the Toronto Seals corporation if the subcontractors did not get paid?

In 2020, the XCFL season is canceled due to the Covid pandemic. The only revenue that the Toronto Seals receives comes from the licensing agreement with Champware.The team is in serious financial trouble.Pistol's accountant suggests a Division Two Proposal to help the team survive the canceled season.

What is a Division Two Proposal? Is this strategy a good option for Pistol?

Champware calls Pistol demanding that the Toronto Seals take legal action against a Montreal-based competitor that has begun selling football jerseys with the same blue and silver coloration as the Toronto Seals.Rather than displaying Toronto Seals on the front of the jersey, these fake jerseys have translated their team name into French, as in 'Phoque Toronto.' For some reason, the knock-off jerseys have been selling extremely well in places like Quebec, the Atlantic provinces, Western Canada, and upstate New York.

Is it possible for the Toronto Seals to sue the Montreal based distributor of the 'Phoque Toronto' jerseys? What would be the cause of action? What are the possible remedies to the Toronto Seals if they are successful in court?

After the canceled season, (and the controversy with the jerseys), fan interest in the 2021 season is at an all time high. In the months leading up to the season, the team has sold out its season tickets allotment and single game tickets are also selling at a brisk pace.Pistol is able to pay 80% of the back rent he owed to the City of Toronto for Lamport Stadium.He is also up to date with most of his other suppliers.Pistol's plan is to use the revenue from the concession food and beverage sales to pay back allinvoices that are outstanding. If the stadium is full of fans, this strategy will work.

Days before the first game of the season, Toronto Mayor Dale holds a press conference revealing that the City of Toronto has decided to lock the Toronto Seals out of Lamport Stadium due to the back rent that is still owed.

Pistol's lawyer recommends that Pistol go to court to get an injunction against the City of Toronto.What would be the likely outcome of this courtroom drama?

Hearing that the team may be insolvent, the beer, soft drink, and food suppliers stop shipping the teams order "in transitu" meaning there will be no concessions for the home opener.

What does "stoppage in transitu" mean? When is it legal for a supplier to use this strategy?

The team's laundry service company is also worried about the City of Toronto's lockout.The laundry company decides to hold onto the team's uniforms and won't release the uniforms until they have been paid.

What is this called?Is it legal to hold items belonging to the Toronto Seals until payment is received? What might the laundry service company do next if payment is not sent?

Considering these events, the bank holding the mortgage on the practice facility decides to seek receivership of the Toronto Seals Football Club and Pistol releases the following press release:

"The Toronto Seals Football Club has made the difficult decision to withdraw from the 2021 XCFL season to focus on restructuring our finances to the benefit of our fans and our players.We look forward to welcoming everyone back when we return in 2022."

What does receivership mean? In your opinion, is the bank justified in seeking receivership in this circumstance?If the court approves receivership, what will happen next to the Toronto Seals Football Club and Pistol Pete Piselli?