Approval Thresholds For BIA And CCAA Proposals To Creditors

Under the Bankruptcy and Insolvency Act (BIA) and the Companies' Creditors Arrangement Act (CCAA), companies in financial straits may seek a stay of proceedings in order to given the company time to devise a proposal to creditors under the BIA (Proposal) or a plan or arrangement and compromise to creditors under the CCAA (Plan) rather than declare bankruptcy. The Proposal or Plan will address compromises on amounts owing and the timing of repayment. If the Proposal or Plan is approved by the creditors and the court, the arrangement allows a company to manage debt while continuing to operate its business.

Meeting of creditors

After a debtor company files a Proposal, creditors meet to approve or reject it by way of a vote. Under the BIA, this meeting must take place within 21 days of the proposal's filing, but may be adjourned with the approval of the creditors to allow an amended Proposal to be put forward.