Business closure/bankruptcy

[Father of five]

A business in our community closed its doors this week and posted on it web page a number of legitimate reasons for the closure but also stated that they would be unable to refund people for services owing.
I’ve always been under the impression that a business which owed money or services must declare bankruptcy and that under Alberta law that services paid for and not provided was a criminal offence (theft of services)
I know many people in town are owed what was promised

What are the business owners legal responsibilities to his customers
Does he have to file bankruptcy or can he just close his doors and walk away

[Cement Bench]

one needs to prove fraud in order to get paid
businesses do this almost 100% of the time,
if money is owed to the bank then they make sure the bank gets paid off so that any personal guaranties are not acted upon,
screw the suppliers,
a supplier can get his goods back if less than 30 days delivered and clearly identifiable
Cement Bench

[schmedlap]

Both bankruptcy and criminal law are federal, not provincial. If the relevant individual or corporation (was it an unincorporated or incorporated business?) has not assigned in bankruptcy formally through a trustee, or been put into formal receivership by a secured creditor, then the people who have prepaid for services not delivered, and other unsecured creditors, can sue the individual(s) or the corporation, whichever is the case, for their losses or debts, in either Provincial Court (under $50,000) or Court of Queen's Bench. Whether it is worthwhile depends on whether the defendant has any exigible assets - they might not ever be able to pay and/or may go bankrupt later.
There may be some quasi-criminal liability under the Consumer Protection Act of Alberta if rules applying to certain businesses and practices were breached.
There would not be any criminal aspect (forms of theft or fraud) unless the acts in question were committed with the requisite intent - unlikely and hard to prove.
The people who are the victims of this need to consult a lawyer who has competency in these areas.