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ARTICLE · 22 NOVEMBER 2010

Credit Bidding: The Basics

Blake, Cassels & Graydon LLP
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Credit bidding allows a secured creditor to use its debt as currency in a competitive sales process. The traditional court-supervised sales process in proceedings under the Companies’ Creditors Arrangement Act (CCAA) contemplated the solicitation of offers for a debtor’s business, with all offers to be submitted by a court-prescribed deadline.

CanadaInsolvency/Bankruptcy/Re-Structuring
Linc Rogers
Linc Rogers
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Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Restructuring & Insolvency, November 2010

Credit bidding allows a secured creditor to use its debt as currency in a competitive sales process. The traditional court-supervised sales process in proceedings under the Companies' Creditors Arrangement Act (CCAA) contemplated the solicitation of offers for a debtor's business, with all offers to be submitted by a court-prescribed deadline. The debtor and/or its court appointed monitor would then select the highest and best offer among those bidders that submitted offers by the deadline and otherwise complied with the terms of the sales process. The traditional sales process provided no opportunity for potential purchasers to submit overbids at a later date.

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