An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005 (S.C. 2007, c. 36)
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Assented to 2007-12-14
78. Section 36 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Restriction on disposition of business assets
36. (1) A debtor company in respect of which an order has been made under this Act 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:Notice to creditors
(2) A company that applies to the court for an authorization is to 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
(3) 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 monitor approved the process leading to the proposed sale or disposition;
(c) whether the monitor 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
(4) If the proposed sale or disposition is to a person who is related to the company, the court may, after considering the factors referred to in subsection (3), 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 company; 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
(5) For the purpose of subsection (4), a person who is related to the company includes
(a) a director or officer of the company;
(b) a person who has or has had, directly or indirectly, control in fact of the company; 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
(6) 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 company 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
(7) The court may grant the authorization only if the court is satisfied that the company can and will make the payments that would have been required under paragraphs 6(4)(a) and (5)(a) if the court had sanctioned the compromise or arrangement.
Preferences and Transfers at Undervalue
Marginal note:Application of sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act
36.1 (1) Sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act apply, with any modifications that the circumstances require, in respect of a compromise or arrangement unless the compromise or arrangement provides otherwise.
Marginal note:Interpretation
(2) For the purposes of subsection (1), a reference in sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act
(a) to “date of the bankruptcy” is to be read as a reference to “day on which proceedings commence under this Act”;
(b) to “trustee” is to be read as a reference to “monitor”; and
(c) to “bankrupt”, “insolvent person” or “debtor” is to be read as a reference to “debtor company”.
79. Subsection 39(1) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
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.
80. Section 52 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is amended by adding the following after subsection (2):
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.
81. Subsection 61(2) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Public policy exception
(2) Nothing in this Part prevents the court from refusing to do something that would be contrary to public policy.
82. The portion of section 62 of the Act before paragraph (a), as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Regulations
62. The Governor in Council may make regulations for carrying out the purposes and provisions of this Act, including regulations
2005, c. 47, s. 1WAGE EARNER PROTECTION PROGRAM ACT
83. Section 2 of the Wage Earner Protection Program Act is amended by adding the following after subsection (4):
Marginal note:Related persons
(5) Despite subsection 4(5) of the Bankruptcy and Insolvency Act,
(a) for the purposes of paragraph 6(d), an individual is considered to deal at arm’s length with a related person if the Minister is satisfied that, having regard to the circumstances — including the terms and conditions of the individual’s employment with the former employer, their remuneration and the duration, nature and importance of the work performed for the former employer — it is reasonable to conclude that the individual would have entered into a substantially similar contract of employment with the former employer if they had been dealing with each other at arm’s length; and
(b) for the purposes of subsection 21(4), individuals who are related to each other are, in the absence of evidence to the contrary, deemed not to deal with each other at arm’s length while so related.
84. Paragraph 5(a) of the Act is replaced by the following:
(a) the individual’s employment terminated in the circumstances prescribed by regulation;
85. Section 6 of the Act is replaced by the following:
Marginal note:Exceptions
6. An individual is not eligible to receive a payment in respect of any wages earned during a period in which the individual
(a) was an officer or director of the former employer;
(b) had a controlling interest within the meaning of the regulations in the business of the former employer;
(c) occupied a managerial position within the meaning of the regulations with the former employer; or
(d) was not dealing at arm’s length with
(i) an officer or director of the former employer,
(ii) a person who had a controlling interest within the meaning of the regulations in the business of the former employer, or
(iii) an individual who occupied a managerial position within the meaning of the regulations with the former employer.
86. (1) Subsection 7(1) of the Act is replaced by the following:
Marginal note:Amount of payment
7. (1) The amount that may be paid under this Act to an individual is the amount owing to the individual for wages earned during the six months immediately before the date of the bankruptcy or the first day on which there was a receiver in relation to the former employer, as the case may be, less any amount prescribed by regulation. In the case of a former employer who is both bankrupt and subject to a receivership, the amount owing is the greater of the amount determined in respect of the bankruptcy and the amount determined in respect of the receivership.
(2) The portion of subsection 7(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Maximum
(2) The maximum amount that may be paid to an individual is the greater of the following amounts, less any amount prescribed by regulation:
(3) The portion of subsection 7(2) of the English version of the Act after paragraph (b) is repealed.
(4) Subsection 7(3) of the French version of the Act is replaced by the following :
Marginal note:Affectation des prestations
(3) Sauf disposition réglementaire contraire, les prestations versées au titre de la présente loi ne sont affectées à l’indemnité de vacances qu’après affectation à tous les autres éléments du salaire.
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