In a previous post we looked at Essar Steel Algoma and its plans to seek protection under the Companies' Creditors Arrangement Act, a business when facing financial difficulty. Now another Canadian steel company, U.S. Steel Canada (formerly Stelco), is in creditor protections while it looks for a new owner. A previous effort to sell the business was unsuccessful and it recently sought court approval for a new sales process. A contentious issue is the role to be played by the company's former parent U.S. Steel, which claims to be owed $2.2 billion.
Financial difficulties need not result in a company going out of business. Depending on the circumstances surrounding a company's financial situation, it is possible that a reorganization or restructuring may be used to address the issue. For larger companies, this is provided for under the Companies' Creditors Arrangement Act (CCAA).
Businesses of all sizes in Canada face financial difficulties and may need help in addressing them. The sudden insolvency proceedings engaged by Target Canada illustrates this.
There are numerous options available for businesses facing financial difficulties. However, a business may ultimately have no choice but to assign itself into bankruptcy as its only option under the Bankruptcy and Insolvency Act.
Any business could face financial difficulties at some point. While the reasons for this can vary widely, there are ways in which a business might approach the matters in order to remain solvent. This is illustrated in the situation faced recently by a Canadian steel company.
Throughout the province of British Columbia, businesses of all types provide goods and services as well as employment. While many businesses succeed, there are a variety of reasons why financial difficulties could arise. When that happens, the first inclination of the business may be to assign itself into bankruptcy.