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

Marginal note:Statutory Crown securities

• 39 (1) In relation to proceedings under this Act in respect of a debtor company, a security provided for in federal or provincial legislation for the sole or principal purpose of securing a claim of Her Majesty in right of Canada or a province or a workers’ compensation body is valid in relation to claims against the company only if, before the day on which proceedings commence, the security is registered under a system of registration of securities that is available not only to Her Majesty in right of Canada or a province or a workers’ compensation body, but also to any other creditor who holds a security, and that is open to the public for information or the making of searches.

• Marginal note:Effect of security

  (2) A security referred to in subsection (1) that is registered in accordance with that subsection

  • (a) is subordinate to securities in respect of which all steps necessary to setting them up against other creditors were taken before that registration; and

  • (b) is valid only in respect of amounts owing to Her Majesty or a workers’ compensation body at the time of that registration, plus any interest subsequently accruing on those amounts.

Marginal note:Act binding on Her Majesty

40 This Act is binding on Her Majesty in right of Canada or a province.

Miscellaneous

Marginal note:Certain sections of Winding-up and Restructuring Act do not apply

41 Sections 65 and 66 of the Winding-up and Restructuring Act do not apply to any compromise or arrangement to which this Act applies.

Marginal note:Act to be applied conjointly with other Acts

42 The provisions of this Act may be applied together with the provisions of any Act of Parliament, or of the legislature of any province, that authorizes or makes provision for the sanction of compromises or arrangements between a company and its shareholders or any class of them.

Marginal note:Claims in foreign currency

43 If a compromise or an arrangement is proposed in respect of a debtor company, a claim for a debt that is payable in a currency other than Canadian currency is to be converted to Canadian currency as of the date of the initial application in respect of the company unless otherwise provided in the proposed compromise or arrangement.

PART IVCross-border Insolvencies

Purpose

Marginal note:Purpose

44 The purpose of this Part is to provide mechanisms for dealing with cases of cross-border insolvencies and to promote

• (a) cooperation between the courts and other competent authorities in Canada with those of foreign jurisdictions in cases of cross-border insolvencies;

• (b) greater legal certainty for trade and investment;

• (c) the fair and efficient administration of cross-border insolvencies that protects the interests of creditors and other interested persons, and those of debtor companies;

• (d) the protection and the maximization of the value of debtor company’s property; and

• (e) the rescue of financially troubled businesses to protect investment and preserve employment.

Interpretation

Marginal note:Definitions

• 45 (1) The following definitions apply in this Part.

  foreign court

  foreign court means a judicial or other authority competent to control or supervise a foreign proceeding. (tribunal étranger)

  foreign main proceeding

  foreign main proceeding means a foreign proceeding in a jurisdiction where the debtor company has the centre of its main interests. (principale)

  foreign non-main proceeding

  foreign non-main proceeding means a foreign proceeding, other than a foreign main proceeding. (secondaire)

  foreign proceeding

  foreign proceeding means a judicial or an administrative proceeding, including an interim proceeding, in a jurisdiction outside Canada dealing with creditors’ collective interests generally under any law relating to bankruptcy or insolvency in which a debtor company’s business and financial affairs are subject to control or supervision by a foreign court for the purpose of reorganization. (instance étrangère)

  foreign representative

  foreign representative means a person or body, including one appointed on an interim basis, who is authorized, in a foreign proceeding respect of a debtor company, to

  • (a) monitor the debtor company’s business and financial affairs for the purpose of reorganization; or

  • (b) act as a representative in respect of the foreign proceeding. (représentant étranger)

• Marginal note:Centre of debtor company’s main interests

  (2) For the purposes of this Part, in the absence of proof to the contrary, a debtor company’s registered office is deemed to be the centre of its main interests.

Recognition of Foreign Proceeding

Marginal note:Application for recognition of a foreign proceeding

• 46 (1) A foreign representative may apply to the court for recognition of the foreign proceeding in respect of which he or she is a foreign representative.

• Marginal note:Documents that must accompany application

  (2) Subject to subsection (3), the application must be accompanied by

  • (a) a certified copy of the instrument, however designated, that commenced the foreign proceeding or a certificate from the foreign court affirming the existence of the foreign proceeding;

  • (b) a certified copy of the instrument, however designated, authorizing the foreign representative to act in that capacity or a certificate from the foreign court affirming the foreign representative’s authority to act in that capacity; and

  • (c) a statement identifying all foreign proceedings in respect of the debtor company that are known to the foreign representative.

• Marginal note:Documents may be considered as proof

  (3) The court may, without further proof, accept the documents referred to in paragraphs (2)(a) and (b) as evidence that the proceeding to which they relate is a foreign proceeding and that the applicant is a foreign representative in respect of the foreign proceeding.

• Marginal note:Other evidence

  (4) In the absence of the documents referred to in paragraphs (2)(a) and (b), the court may accept any other evidence of the existence of the foreign proceeding and of the foreign represent­ative’s authority that it considers appropriate.

• Marginal note:Translation

  (5) The court may require a translation of any document accompanying the application.

Marginal note:Order recognizing foreign proceeding

• 47 (1) If the court is satisfied that the application for the recognition of a foreign proceeding relates to a foreign proceeding and that the applicant is a foreign representative in respect of that foreign proceeding, the court shall make an order recognizing the foreign proceeding.

• Marginal note:Nature of foreign proceeding to be specified

  (2) The court shall specify in the order whether the foreign proceeding is a foreign main proceeding or a foreign non-main proceeding.

Marginal note:Order relating to recognition of a foreign main proceeding

• 48 (1) Subject to subsections (2) to (4), on the making of an order recognizing a foreign proceeding that is specified to be a foreign main proceeding, the court shall make an order, subject to any terms and conditions it considers appropriate,

  • (a) staying, until otherwise ordered by the court, for any period that the court considers necessary, all proceedings taken or that might be taken against the debtor company under the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act;

  • (b) restraining, until otherwise ordered by the court, further proceedings in any action, suit or proceeding against the debtor company;

  • (c) prohibiting, until otherwise ordered by the court, the commencement of any action, suit or proceeding against the debtor company; and

  • (d) prohibiting the debtor company from selling or otherwise disposing of, outside the ordinary course of its business, any of the debtor company’s property in Canada that relates to the business and prohibiting the debtor company from selling or otherwise disposing of any of its other property in Canada.

• Marginal note:Scope of order

  (2) The order made under subsection (1) must be consistent with any order that may be made under this Act.

• Marginal note:When subsection (1) does not apply

  (3) Subsection (1) does not apply if any proceedings under this Act have been commenced in respect of the debtor company at the time the order recognizing the foreign proceeding is made.

• Marginal note:Application of this and other Acts

  (4) Nothing in subsection (1) precludes the debtor company from commencing or continuing proceedings under this Act, the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act in respect of the debtor company.

Marginal note:Other orders

• 49 (1) If an order recognizing a foreign proceeding is made, the court may, on application by the foreign representative who applied for the order, if the court is satisfied that it is necessary for the protection of the debtor company’s property or the interests of a creditor or creditors, make any order that it considers appropriate, including an order

  • (a) if the foreign proceeding is a foreign non-main proceeding, referred to in subsection 48(1);

  • (b) respecting the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor company’s property, business and financial affairs, debts, liabilities and obligations; and

  • (c) authorizing the foreign representative to monitor the debtor company’s business and financial affairs in Canada for the purpose of reorganization.

• Marginal note:Restriction

  (2) If any proceedings under this Act have been commenced in respect of the debtor company at the time an order recognizing the foreign proceeding is made, an order made under subsection (1) must be consistent with any order that may be made in any proceedings under this Act.

• Marginal note:Application of this and other Acts

  (3) The making of an order under paragraph (1)(a) does not preclude the commencement or the continuation of proceedings under this Act, the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act in respect of the debtor company.

Marginal note:Terms and conditions of orders

50 An order under this Part may be made on any terms and conditions that the court considers appropriate in the circumstances.

Marginal note:Commencement or continuation of proceedings

51 If an order is made recognizing a foreign proceeding, the foreign representative may commence and continue proceedings under this Act in respect of a debtor company as if the foreign representative were a creditor of the debtor company, or the debtor company, as the case may be.

Obligations

Marginal note:Cooperation — court

• 52 (1) If an order recognizing a foreign proceeding is made, the court shall cooperate, to the maximum extent possible, with the foreign representative and the foreign court involved in the foreign proceeding.

• Marginal note:Cooperation — other authorities in Canada

  (2) If any proceedings under this Act have been commenced in respect of a debtor company and an order recognizing a foreign proceeding is made in respect of the debtor company, every person who exercises powers or performs duties and functions under the proceedings under this Act shall cooperate, to the maximum extent possible, with the foreign representative and the foreign court involved in the foreign proceeding.

• Marginal note:Forms of cooperation

  (3) For the purpose of this section, cooperation may be provided by any appropriate means, including

  • (a) the appointment of a person to act at the direction of the court;

  • (b) the communication of information by any means considered appropriate by the court;

  • (c) the coordination of the administration and supervision of the debtor company’s assets and affairs;

  • (d) the approval or implementation by courts of agreements concerning the coordination of proceedings; and

  • (e) the coordination of concurrent proceedings regarding the same debtor company.