David Wood, CIRP
Boale, Wood & Company
He sings, he plays the drums, and he’s a highly experienced and knowledgeable Licensed Insolvency Trustee (LIT). David Wood looks at the changes he’s seen in the insolvency industry over the years and shares with us what he thinks LITs need to do to maintain their relevance going forward.
I was working towards an accounting designation back in the early 80s and working at an appliance distributor. Interest rates went to 20% (or more). The bank appointed a receiver and I was out of a job. When looking for work, I responded to an ad at Thorne Riddell (a KPMG predecessor firm) for an insolvency position and luckily got an interview and got the job. My former boss was a previous Thorne Riddell employee and he pulled some strings to get me the interview. And that’s how it all started. That led to 20 years or so of working in the industry before starting Boale, Wood and Company Ltd.
2) What are the biggest changes you’ve seen in the industry since you began?
Legislation changes have been constant since I began. The list of exempt assets in consumer insolvencies continues to grow, which means the sources for getting paid are shrinking. It used to be that debtors wouldn’t be able to protect very many assets, so LIT’s could draw their fees from the realization of the debtor’s various assets. Over time though, more and more items are being deemed exempt assets. For example, RRSPs were never previously exempt and now most RRSPs are exempt. RESPs are now exempt in Alberta and maybe another province, and it is likely only a matter of time until other provinces follow suit. So now the LIT is really limited to getting paid by the debtor and maybe some tax refunds on consumer files.
Case law also shapes many different things (rightly or wrongly). Priority claims have also changed, and continue to change as CRA and other claimants lobby for priority to funds in an insolvency.
3) What do you think are the key issues that the profession need to focus on moving into the future?
There are a lot of players out there trying to muscle in on the LITs’ turf. On the consumer side we see the debt advisors/credit counsellors. On the corporate side we see CROs and other non-LIT types doing engagements previously reserved for LITs. LITs are highly educated and have a broad depth of knowledge about a lot of things, and we need to continue to show that we are the professionals of choice and that we add value to the system in order to maintain our relevance.
Of course, the issue of fees always comes up. LITs need to focus on the way we do things and how we do them without charging too high a fee. The system could be streamlined to address some of these issues, on both the consumer and corporate side. For example, in consumer work, the reporting period for all bankrupts could be one year instead of 9, 21, 24 or 36 months. This compensates for seasonal income. Then everyone receives a discharge. It only depends on how much money they have to pay after the year. On the corporate side, things like the Wage Earner Protection Program and other claims (proof of claims) management could be streamlined.
4) You’ve practiced in both the corporate and consumer insolvency spaces. Is it the same or a different skill set? What are the keys to success in each area, in your opinion?
The skill set in each respective area has a lot of similarities. You need to see the bigger picture and not get bogged down in the minutiae. You also need excellent interviewing skills. In particular, you need to know in all cases if the story hangs together.
For corporate practitioners, you need to be practical. And your decisions must be sound and well thought out. On the consumer side, you need to be good with people and have strong technical skills. I have always said that to be a successful LIT you need to be part accountant, part lawyer, part businessman and you need to have street smarts.
5) What advice would you give young professionals? Do you think there are more opportunities for a young LIT on the consumer or corporate side?
I think there is a lot of opportunity for young LITs on the consumer side. 97% of all insolvencies in Canada in 2017 are consumer files (and approximately the same for 2016). And as the statistics show, LITs are not getting any younger. So, if you are a young LIT, I believe that you can create an opportunity to do very well through succession.
6) What is one thing that most people you work with would not know about you?
That I love to sing and I love music. And I play the drums. These are two things that I would love to do more of.