Insolvency, Restructuring And The Critical Supplier

During these financially uncertain times, many businesses are faced with new debt and possible insolvency or even bankruptcy. 

The Companies' Creditors Arrangements Act (CCAA) is a federal statute which, as an alternative to the Bankruptcy and Insolvency Act, provides an alternative statutory process by which an insolvent corporation may obtain protection from its creditors and reorganize its business affairs.

In order for a debtor company to be eligible for protection pursuant to the CCAA, the claims against the company must be greater than $5 million.

The CCAA gives the debtor company an opportunity to seek protection from creditors under court order so they can propose a plan of arrangement. If the order is granted, there will be a stay of legal proceedings for a defined period of time unless or until the stay is lifted by court order. During this period of the stay of proceedings, the debtor company can, for example, reorganize its business operations or