Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36)

Act current to 2016-08-01 and last amended on 2015-02-26. Previous Versions

 [Repealed, 2005, c. 47, s. 128]

Marginal note:Interim financing
  •  (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, a court may make an order declaring that all or part of the company’s property is subject to a security or charge — in an amount that the court considers appropriate — in favour of a person specified in the order who agrees to lend to the company an amount approved by the court as being required by the company, having regard to its cash-flow statement. The security or charge may not secure an obligation that exists before the order is made.

  • Marginal note:Priority — secured creditors

    (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company.

  • Marginal note:Priority — other orders

    (3) The court may order that the security or charge rank in priority over any security or charge arising from a previous order made under subsection (1) only with the consent of the person in whose favour the previous order was made.

  • Marginal note:Factors to be considered

    (4) In deciding whether to make an order, the court is to consider, among other things,

    • (a) the period during which the company is expected to be subject to proceedings under this Act;

    • (b) how the company’s business and financial affairs are to be managed during the proceedings;

    • (c) whether the company’s management has the confidence of its major creditors;

    • (d) whether the loan would enhance the prospects of a viable compromise or arrangement being made in respect of the company;

    • (e) the nature and value of the company’s property;

    • (f) whether any creditor would be materially prejudiced as a result of the security or charge; and

    • (g) the monitor’s report referred to in paragraph 23(1)(b), if any.

  • 1997, c. 12, s. 124;
  • 2005, c. 47, s. 128;
  • 2007, c. 36, s. 65.
Marginal note:Assignment of agreements
  •  (1) On application by a debtor company and on notice to every party to an agreement and the monitor, the court may make an order assigning the rights and obligations of the company under the agreement to any person who is specified by the court and agrees to the assignment.

  • Marginal note:Exceptions

    (2) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under

    • (a) an agreement entered into on or after the day on which proceedings commence under this Act;

    • (b) an eligible financial contract; or

    • (c) a collective agreement.

  • Marginal note:Factors to be considered

    (3) In deciding whether to make the order, the court is to consider, among other things,

    • (a) whether the monitor approved the proposed assignment;

    • (b) whether the person to whom the rights and obligations are to be assigned would be able to perform the obligations; and

    • (c) whether it would be appropriate to assign the rights and obligations to that person.

  • Marginal note:Restriction

    (4) The court may not make the order unless it is satisfied that all monetary defaults in relation to the agreement — other than those arising by reason only of the company’s insolvency, the commencement of proceedings under this Act or the company’s failure to perform a non-monetary obligation — will be remedied on or before the day fixed by the court.

  • Marginal note:Copy of order

    (5) The applicant is to send a copy of the order to every party to the agreement.

  • 1997, c. 12, s. 124;
  • 2005, c. 47, s. 128;
  • 2007, c. 29, s. 107, c. 36, ss. 65, 112.

 [Repealed, 2005, c. 47, s. 128]

Marginal note:Critical supplier
  •  (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring a person to be a critical supplier to the company if the court is satisfied that the person is a supplier of goods or services to the company and that the goods or services that are supplied are critical to the company’s continued operation.

  • Marginal note:Obligation to supply

    (2) If the court declares a person to be a critical supplier, the court may make an order requiring the person to supply any goods or services specified by the court to the company on any terms and conditions that are consistent with the supply relationship or that the court considers appropriate.

  • Marginal note:Security or charge in favour of critical supplier

    (3) If the court makes an order under subsection (2), the court shall, in the order, declare that all or part of the property of the company is subject to a security or charge in favour of the person declared to be a critical supplier, in an amount equal to the value of the goods or services supplied under the terms of the order.

  • Marginal note:Priority

    (4) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company.

  • 1997, c. 12, s. 124;
  • 2000, c. 30, s. 156;
  • 2001, c. 34, s. 33(E);
  • 2005, c. 47, s. 128;
  • 2007, c. 36, s. 65.
Marginal note:Removal of directors
  •  (1) The court may, on the application of any person interested in the matter, make an order removing from office any director of a debtor company in respect of which an order has been made under this Act if the court is satisfied that the director is unreasonably impairing or is likely to unreasonably impair the possibility of a viable compromise or arrangement being made in respect of the company or is acting or is likely to act inappropriately as a director in the circumstances.

  • Marginal note:Filling vacancy

    (2) The court may, by order, fill any vacancy created under subsection (1).

  • 1997, c. 12, s. 124;
  • 2005, c. 47, s. 128.
Marginal note:Security or charge relating to director’s indemnification
  •  (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of the company is subject to a security or charge — in an amount that the court considers appropriate — in favour of any director or officer of the company to indemnify the director or officer against obligations and liabilities that they may incur as a director or officer of the company after the commencement of proceedings under this Act.

  • Marginal note:Priority

    (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company.

  • Marginal note:Restriction — indemnification insurance

    (3) The court may not make the order if in its opinion the company could obtain adequate indemnification insurance for the director or officer at a reasonable cost.

  • Marginal note:Negligence, misconduct or fault

    (4) The court shall make an order declaring that the security or charge does not apply in respect of a specific obligation or liability incurred by a director or officer if in its opinion the obligation or liability was incurred as a result of the director’s or officer’s gross negligence or wilful misconduct or, in Quebec, the director’s or officer’s gross or intentional fault.

  • 2005, c. 47, s. 128;
  • 2007, c. 36, s. 66.
Marginal note:Court may order security or charge to cover certain costs
  •  (1) On notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of a debtor company is subject to a security or charge — in an amount that the court considers appropriate — in respect of the fees and expenses of

    • (a) the monitor, including the fees and expenses of any financial, legal or other experts engaged by the monitor in the performance of the monitor’s duties;

    • (b) any financial, legal or other experts engaged by the company for the purpose of proceedings under this Act; and

    • (c) any financial, legal or other experts engaged by any other interested person if the court is satisfied that the security or charge is necessary for their effective participation in proceedings under this Act.

  • Marginal note:Priority

    (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company.

  • 2005, c. 47, s. 128;
  • 2007, c. 36, s. 66.
 
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