There are rarely any winners in the insolvency or bankruptcy of a business, but some lose more than others. Normally, secured lenders fair better than unsecured creditors because they can be paid from the sale of the assets of the business, but there can be important exceptions.
When a debtor is insolvent, recovery by a creditor will generally depend on the creditor's ranking. Secured creditors will have priority over preferred creditors who in turn have priority over unsecured creditors. If a claim can be characterized as an equity claim, it could be further subordinated. Notwithstanding these general rules, the Supreme Court of Canada could soon give courts wider discretion to adjust priorities even further in certain situations.