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ARTICLE · 24 MAY 2021

Bankrupt Company Obtains Protection Under The CCAA

Borden Ladner Gervais LLP
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On March 30, 2021, the Supreme Court of British Columbia (the Court) made an initial order under the Companies Creditors Arrangement Act (the CCAA) in respect of EncoreFX Inc.

CanadaInsolvency/Bankruptcy/Re-Structuring
Roger Jaipargas
Roger Jaipargas
Lisa Hiebert
Lisa Hiebert
Charlotte Chien
Charlotte Chien
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On March 30, 2021, the Supreme Court of British Columbia (the Court) made an initial order under the Companies Creditors Arrangement Act (the CCAA) in respect of EncoreFX Inc. (EncoreFX) one year after the commencement of its bankruptcy proceedings. The decision is unusual in that the applicant for the CCAA initial order was EncoreFX's trustee in bankruptcy (the Trustee), who also sought to be appointed as monitor of EncoreFX (with enhanced powers). On April 22, 2021, the Court released the reasons for its decision.1

The Court's decision highlights that, in certain circumstances, bankrupt companies can obtain relief under the CCAA and be granted the opportunity to file a plan of compromise or arrangement. This decision has particular significance as the first reported decision where a court has interpreted section 11.6(b) of the CCAA.

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