Craig McMahon

Craig McMahon: Attorney with Field Law

Biography

Craig McMahon is an experienced business and insolvency lawyer helping clients navigate complex financial transactions and related issues by providing astute counsel and advice, education, and litigation services. Craig has appeared at the Provincial Court of Alberta, Civil and Criminal Divisions; the Court of Queen's Bench of Alberta; the Alberta Court of Appeal; the Federal Court of Canada and the Tax Court of Canada.

Clients appreciate his extensive understanding of business operations (regardless of sector), and his inherent ability to translate legalese within the lifecycle of a loan, in order to help clients fully understand risks and opportunities.

The fact that he has experienced the inner workings of Canada Revenue Agency first-hand, due to his previous employment at the agency where he provided counsel for debt recovery, priority disputes, and tax evasion files makes him a go-to resource for any client looking to proactively prepare for and efficiently respond to issues including directors' liability assessments, non-arms' length transfer assessments, audits, objections and appeals. Craig's practice includes the following areas of focus:

•Bankruptcy and proposals
•Foreclosures and seizing assets
•Fraud litigation
•Priority disputes
•Receiverships
•Restructuring
•Secured lending
•Security enforcement
•Tax disputes with Canada Revenue Agency

I represent a broad spectrum of clients, from big banks who are owed money, to professional service providers (accountants) who are advising clients, to the average citizen who is in financial trouble and having issues with creditors, or a dispute with CRA.

Craig works with debtors, secured and unsecured creditors, receivers, trustees, landlords, shareholders and directors.

Regardless of the type of client, a fundamental part of Craig's offering is his commitment to continuous learning and education. He stays current with government legislation, economic trends and indicators, and offers seminars to clients and post-secondary institutions.

Outside of Work

Craig enjoys spending quality time with his family. He is an active member of his community and does volunteer work with the Lethbridge Ringette Association, as his daughters play ringette.

Volunteer / Pro Bono

Medicine Hat Kinsmen Club Member 2014-Present
Medicine Hat & District Chamber of Commerce Member 2014-Present

Experience

•In 2015, Craig represented a trust of a long-deceased (thirty years) taxpayer in a dispute over an alleged lost tax form pertaining to a specific asset (farmland) with Canada Revenue Agency (CRA) some thirty years prior.

There were several challenges in this case, including the fact that the Estate representative had no proof that the form was actually sent to and received by CRA, the time to file an appeal of CRA's assessment had expired, and there were no written decisions about how to resolve issues where there is a lost tax form.

Strategically, Craig applied for, and received, an extension to file a formal objection which focused on the fact that while taxpayers cannot expect CRA to confirm receipt of every document it receives, it is reasonable that when a taxpayer or its representative (i.e. an accountant or lawyer) is engaged in correspondence with CRA over a very specific issue the taxpayer or representative should be able to expect some form of communication from CRA advising if something that was supposed to be filed or submitted was not received. Knowledge of non-receipt is solely CRA's. For CRA to ignore the non-receipt of a form for ten years and then raise it once the taxpayer had net income to apply the capital loss was unjust and inequitable. In this case, the deemed realization and the net capital loss it created could not be ignored, whether or not the necessary form was received by CRA or not.

In the end, CRA agreed with Craig's argument and vacated the assessment against the taxpayer.

•In 2010, Craig acted for a private lender who had financed the development of a golf course in northwest Alberta. The development was stalled due to lack of funding, and the loan had gone into default.

Unbeknownst to the lender at the time it advanced funds and was granted a mortgage, the debtor had significant unpaid payroll source deductions and GST. Relying on a little-known provision of the Income Tax Act, CRA claimed a deemed trust priority on the lands, ahead of the mortgage. An appraisal showed the value of the debtor's land and personal property as slightly less than what was owed on CRA's deemed trust. The CRA's deemed trust claim against the debtor's land and personal property gave it a priority over the lender; any money spent by the lender in recovering against the debtor's assets would be lost because the first recoveries would go to CRA; and at that time, there was no market for development lands.

In order to maximize recovery to the lender, Craig developed a strategy (out-of-the-box) and negotiated with CRA to proceed with the seizure and sale of the personal property of the debtor, on the basis that CRA would agree to allow seizure and sale costs (including reasonable legal costs) to be paid from the net sale proceeds so the client would not be out-of-pocket for what would be CRA's recovery.. Then, once CRA was paid in full, the lender could commence a foreclosure action on the lands without being concerned about CRA's deemed trust, thereby maximizing its recovery. Normally, CRA lets the lender do all the work at its own expense, and once the assets are sold, it sends a letter demanding payment for its deemed trust priority.

By implementing Craig's strategy, the debtor's personal property satisfied CRA's deemed trust debt in full and the lands were sold by the lender through the foreclosure process, maximizing recovery to the lender.

•In 2015, Craig was retained as a receiver's counsel, where the debtor was a veterinary clinic in Southern Alberta which had assets including the land and building, and specialized equipment. There was a lot of commercial property on the market, so the prospects of a quick sale of the property seemed slim at best.

Almost immediately, a party (potentially the only foreseeable purchaser for this particularly unique property) came forward with interest in renting the property. During the first month of their tenancy, Craig spent significant time with the party's lawyer explaining the receivership process and asset sales in a receivership to allay any concerns they may have had about purchasing assets in a receivership and the process itself.

By the end of the first month, the tenant liked the building and the tenant's lawyer was comfortable with the process and decided to purchase the property and some equipment.

Within only a few months and in a very uncertain economy, the receiver was able to sell the unique assets of the debtor and the receivership was concluded. The bank that put the business into receivership was able to minimize its carrying costs while maximizing its recovery in short order.

Areas of Practice (6)

  • Debt Recovery and Restructuring
  • Bankruptcy and Insolvency, Security Enforcement
  • Litigation
  • Tax
  • Banking and Finance
  • Condominium Development and Administration

Education & Credentials

Contact Information:
403 260 8595  Phone
403 264 7084  Fax
www.fieldlaw.com
University Attended:
University of Alberta, Bachelor of Commerce, with Distinction, 1997
Law School Attended:
University of Alberta, Bachelor of Laws, 2001
Year of First admission:
2002
Admission:
2002, Alberta
Memberships:

Professional Associations

Association Title Dates
Canadian Bar Association Member

Reported Cases:
Reported Cases: The reported cases below belong to Craig and are representative of Craig's experience. Hoard (Re), 2014 2014 ABQB 426 Alberta Court of Queen's Bench 2014; Schaus v. Mountain Ridge Developments Inc. 2009 ABQB 94 Alberta Court of Queen's Bench 2009; Re SemCanada Crude Company (Companies' Creditors Arrangement Act) 2009 ABQB 90 Alberta Court of Queen's Bench 2009; Royal Bank of Canada v. Bisset 2005 ABQB 700 Alberta Court of Queen's Bench 2005; Hawthorne v. Hawthorne 2003 ABQB 636 Alberta Court of Queen's Bench 2003
ISLN:
917054950

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