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January 2016

Creditor wants debtor company to plan for potential liquidation

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. 

Reorganizing a business under the CCAA

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).

Steel company seeks creditor protection under the CCAA

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.

Business struggling? Consult a lawyer to learn about options

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.

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