As I see it, and this is not unexpected, because typically the smartest people take a leadership role in most endeavors, the Canadian bankruptcy law has been exploited by a relatively few lawyers, bankers and a judge by the name of Hon. James Farley. What I am most concerned about is that the little person who (directly or via pension plans) has taken almost all the risk in financing the operations of these corporations is now being taken advantage of, and the Canadian Securities Administrators (i.e., Canada's SEC) is asleep at the switch.

Rather than investigate shareholder charges of improper capital market dealings, which is under their oversight responsibility, the CSA has allowed Judge Farley to use bankruptcy law to rule in favor of Johnny-come-lately's who have not taken the risks to put their interests ahead of others.

As to a judge's motive to push the envelope of the law, it's not for me to say. I don't suggest anything sinister there, however.

But, it is part of the process that this one judge, plus a few others, is prohibiting shareholder rights, without ruling under securities law.

Of course a sole judge cannot effect such change without the help of others. In a number of recent cases, including Eaton's, Algoma Steel, Air Canada, and Stelco, a man by the name of Hap Stephen has managed the corporate restructuring under bankruptcy law. The judge was James Farley. The two are frequent co-panelists at bankruptcy industry workshops and seminars.

Hap Stephen was recently president or managing partner of the consulting arm of one of Canada's big four accountancy firms, which is the one used by Judge Farley as monitor to the court in these bankruptcy cases.

Under the direction of Hap Stephen, the re-structuring officer for Algoma Steel, the court (i.e., Hon. James Farley), in 2002 I believe, approved the cancellation of the old Algoma shares. New common shares were then distributed to bondholders and to the executive management of Algoma (perhaps including Hap Stephen, although I do not know for sure). The workers were given guarantees of bonuses upon return to corporate profitability in return for various union concessions and wage cuts etc.

Subsequently, last Christmas each Algoma Steel worker that was affected received a cash bonus of $17,000 as profit sharing, given that the corporation had a successful year.

The Algoma Steel shares (TSX: AGA) started out at $3, and in just 36 months rose to $40.18 (now at ~$28).

Under bankruptcy law, the old shareholders received zero compensation for the contributions they made to build the company. Financial institutions that were observant and well connected, and hence aware of the re-organization process, purchased Algoma Steel bonds for a few pennies on the dollar and converted them to new shares, thereby gaining a windfall.

I believe that the old shareholders got screwed in the re-organization process because the assets were not valued on a going concern basis " although Algoma Steel was obviously still a going concern. But under the Companies' Creditors Arrangement Act (CCAA) in Canada, a judge can rule on whatever facts he or she decides upon. So, Judge Farley ruled as fact that Algoma Steel had no value whatsoever.

In effect, the bondholders (many of which never even bought the original bonds at par, but were purely speculators) highjacked the company - pure and simple. This is exactly the same process being played out today at Stelco, as it was at Eaton's and Air Canada, by the same people.

This chummy Hap Stephen/James Farley relationship has a common element: bondholders steal the assets via getting new shares and/or control of the assets that skyrocket in value, and the original shareholders get zip. And, I am shocked that the CSA has stood by and permitted such a travesty.

It is a reason that I say that securities authorities in Canada (and elsewhere) are the friends of vested interests, including their high profile lawyers, and they are not delivering on their mandate, which is to serve and protect the people. Although the securities administrators are civil servants, there is no effective control over them, because our elected representatives to government are " to be blunt -- ignorant of the capital markets.

I find it shameless of the CSA to have these CCAA fraud allegations investigated solely by an organization of Marxist-Leninists. I do not want to live in that kind of society, so I try to do what I can to help a capitalist society understand what is going on here.

For starters, you can read the communist literature, because I can't find anything else that gets to the heart of the matter " and isn't that ironic?

In conclusion, H, your mom has been ripped off. Johnny-come-lately corporate managers and financial institutions that used a flawed legal system to perpetrate the crime stole her assets. Three years later, her shares would have been worth $25,000, but Judge Farley ruled them worthless.

I am not the right person to ask if she has recourse, but I doubt it.

For an answer you might ask the media to investigate what your provincial securities commission did to "serve and protect" her. And btw, ask what they intend to do in future to protect you and your children from corporate insolvency fraud.

I'd like to hear their answer.