Ontario Barrister and Solicitor Practice Exam

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Who may be eligible to receive payment under the Wage Earner Protection Program Act when a corporation declares bankruptcy?

Shareholders
Board members
Bondholders
Former employees

The correct answer is: Former employees

One of the main purposes of the Wage Earner Protection Program Act is to protect employees' wages and vacation pay in the event of their employer's bankruptcy. This means that former employees who are owed wages or vacation pay by the corporation are eligible to receive payment under this act. Shareholders, board members, and bondholders, on the other hand, typically do not receive payment under this act as they are not considered employees of the corporation. Their financial interests are separate from those of the employees and would be addressed through a different process in the event of the corporation's bankruptcy.