The Companies’ Creditors Arrangement Act (“CCAA”) has been described as Canada’s equivalent to the U.S. Chapter 11 proceedings, which involves the debtor maintaining control of its assets and a stay of proceedings on all creditors’ actions, while a workable plan of reorganization is formulated for the creditor and ultimately court approval.
There are similarities to formal restructuring proceedings under the Bankruptcy and Insolvency Act (“BIA”) and under the CCAA. A CCAA Plan of Arrangement is very flexible and often includes a compromise of debt and/or an extension in time to pay same. It can also involve releases from certain contractual obligations. The CCAA plan must similarly be accepted by the creditors and subsequently approved by the Court. Failure to do so may result in the lifting of the stay and the revival of creditor collection remedies.
There are a number of differences between formal restructuring proceedings under the CCAA and the BIA which includes, but is not limited to, the following:
To find out whether restructuring pursuant to the CCAA is right for you, please contact one of the professionals at Crowe MacKay & Company. We are here to help.