Two major pieces of legislation govern insolvency and bankruptcy in Canada – the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA). Both allow insolvent corporations to file proposals in an effort to make alternate arrangements for settling outstanding debts. The two statues have many similarities but also a number of differences that can make either one more advantageous than the other in a corporate restructuring.
In receivership, an appointed third party acts on behalf of a secured creditor and is tasked with taking possession of the debtor's assets, selling them and using the proceeds to pay the secured debt.
Each province has its own laws governing issues related to property and commercial matters, but when insolvency or bankruptcy enter the scene, federal law becomes paramount. Our post this week provides a snapshot of these various key pieces of Canadian legislation.
In 2008, the federal government established the Wage Earner Protection Program (WEPP). The provision was designed to protect the rights of workers whose employers have gone into bankruptcy or receivership. The program allows eligible workers to make a claim for outstanding amounts of pay, which are charged against the debtor company's assets or bankruptcy estate