On August 10, 1987 the directors of Principal Group Ltd. (PGL) voluntarily assigned the company into bankruptcy. The Trustee in Bankruptcy in a Preliminary Report issued pursuant to section 141 of the Bankruptcy Act (Canada) stated:

Prior to 1981, the main function of Principal Group Ltd. was to supply services to the subsidiary companies for a fee, which was more than adequate to cover the costs of these services. This function continued to the date of bankruptcy. Approximately $5 million of claims in bankruptcy arise strictly from trade debt.

In 1981, the company increased its efforts to raise capital for its subsidiary and affiliated companies through the sale of promissory notes to individuals and organizations of various types. The purchasers of these notes approximated $87.0 million of the $93.0 million of creditors’ claims at the date of bankruptcy.