Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Act current to 2014-09-15 and last amended on 2013-04-01. Previous Versions

Marginal note:Application for authorization to serve a notice to bargain
  •  (1) An insolvent person in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) who is a party to a collective agreement and who is unable to reach a voluntary agreement with the bargaining agent to revise any of its provisions may, on giving five days notice to the bargaining agent, apply to the court for an order authorizing the insolvent person to serve a notice to bargain under the laws of the jurisdiction governing collective bargaining between the insolvent person and the bargaining agent.

  • Marginal note:Conditions for issuance of order

    (2) The court may issue the order only if it is satisfied that

    • (a) the insolvent person would not be able to make a viable proposal, taking into account the terms of the collective agreement;

    • (b) the insolvent person has made good faith efforts to renegotiate the provisions of the collective agreement; and

    • (c) the failure to issue the order is likely to result in irreparable damage to the insolvent person.

  • Marginal note:No delay on vote on proposal

    (3) The vote of the creditors in respect of a proposal may not be delayed solely because the period provided in the laws of the jurisdiction governing collective bargaining between the insolvent person and the bargaining agent has not expired.

  • Marginal note:Claims arising from revision of collective agreement

    (4) If the parties to the collective agreement agree to revise the collective agreement after proceedings have been commenced under this Act in respect of the insolvent person, the bargaining agent that is a party to the agreement has a claim, as an unsecured creditor, for an amount equal to the value of concessions granted by the bargaining agent with respect to the remaining term of the collective agreement.

  • Marginal note:Order to disclose information

    (5) On the application of the bargaining agent and on notice to the person to whom the application relates, the court may, subject to any terms and conditions it specifies, make an order requiring the person to make available to the bargaining agent any information specified by the court in the person’s possession or control that relates to the insolvent person’s business or financial affairs and that is relevant to the collective bargaining between the insolvent person and the bargaining agent. The court may make the order only after the insolvent person has been authorized to serve a notice to bargain under subsection (1).

  • Marginal note:Unrevised collective agreements remain in force

    (6) For greater certainty, any collective agreement that the insolvent person and the bargaining agent have not agreed to revise remains in force.

  • Marginal note:Parties

    (7) For the purpose of this section, the parties to a collective agreement are the insolvent person and the bargaining agent who are bound by the collective agreement.

  • 2005, c. 47, s. 44.
Marginal note:Restriction on disposition of assets
  •  (1) An insolvent person in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) may not sell or otherwise dispose of assets outside the ordinary course of business unless authorized to do so by a court. Despite any requirement for shareholder approval, including one under federal or provincial law, the court may authorize the sale or disposition even if shareholder approval was not obtained.

  • Marginal note:Individuals

    (2) In the case of an individual who is carrying on a business, the court may authorize the sale or disposition only if the assets were acquired for or used in relation to the business.

  • Marginal note:Notice to secured creditors

    (3) An insolvent person who applies to the court for an authorization shall give notice of the application to the secured creditors who are likely to be affected by the proposed sale or disposition.

  • Marginal note:Factors to be considered

    (4) In deciding whether to grant the authorization, the court is to consider, among other things,

    • (a) whether the process leading to the proposed sale or disposition was reasonable in the circumstances;

    • (b) whether the trustee approved the process leading to the proposed sale or disposition;

    • (c) whether the trustee filed with the court a report stating that in their opinion the sale or disposition would be more beneficial to the creditors than a sale or disposition under a bankruptcy;

    • (d) the extent to which the creditors were consulted;

    • (e) the effects of the proposed sale or disposition on the creditors and other interested parties; and

    • (f) whether the consideration to be received for the assets is reasonable and fair, taking into account their market value.

  • Marginal note:Additional factors — related persons

    (5) If the proposed sale or disposition is to a person who is related to the insolvent person, the court may, after considering the factors referred to in subsection (4), grant the authorization only if it is satisfied that

    • (a) good faith efforts were made to sell or otherwise dispose of the assets to persons who are not related to the insolvent person; and

    • (b) the consideration to be received is superior to the consideration that would be received under any other offer made in accordance with the process leading to the proposed sale or disposition.

  • Marginal note:Related persons

    (6) For the purpose of subsection (5), a person who is related to the insolvent person includes

    • (a) a director or officer of the insolvent person;

    • (b) a person who has or has had, directly or indirectly, control in fact of the insolvent person; and

    • (c) a person who is related to a person described in paragraph (a) or (b).

  • Marginal note:Assets may be disposed of free and clear

    (7) The court may authorize a sale or disposition free and clear of any security, charge or other restriction and, if it does, it shall also order that other assets of the insolvent person or the proceeds of the sale or disposition be subject to a security, charge or other restriction in favour of the creditor whose security, charge or other restriction is to be affected by the order.

  • Marginal note:Restriction — employers

    (8) The court may grant the authorization only if the court is satisfied that the insolvent person can and will make the payments that would have been required under paragraphs 60(1.3)(a) and (1.5)(a) if the court had approved the proposal.

  • 2005, c. 47, s. 44;
  • 2007, c. 36, s. 27.