Several months ago, we provided a summary of the bankruptcy process. This week, our post looks at the basic process involved when an insolvent person (which by definition includes an individual and a corporation, among other "persons") chooses to make a Division I proposal as an alternative to bankruptcy.
The Alberta Court of Appeal last week heard an appeal of a precedent setting decision allowing for bankrupt oil and gas companies to walk away from unproductive wells and leave the cleanup costs to the province. The appeal decision is expected to clarify the law regarding priority between federal bankruptcy law priority and provincial environmental regulations.
In our last post, we discussed various acts that may be deemed as offences under the Bankruptcy and Insolvency Act (BIA). But in addition to these offences, other provisions in the BIA authorize the attack and setting aside of improper transactions entered into by the debtor prior to bankruptcy, without the necessity of proving criminal charges.
The Canadian bankruptcy regime was designed with two key purposes in mind - provide options to 'honest but unfortunate' debtors struggling with an unmanageable financial load and create an orderly means for creditors to recover amounts owed them. With the potential for abuse ever present, the Office of the Superintendent of Bankruptcy (OSB) has ways and means to detect and deal with offenders.