Bankruptcy and Insolvency Act

Marginal note:Statutory Crown securities

• 87 (1) 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 of a workers' compensation body is valid in relation to a bankruptcy or proposal only if the security is registered, before the earliest of

  • (a) the date a petition is filed against the debtor,

  • (b) the date the debtor makes an assignment,

  • (c) the date the debtor files a notice of intention under section 50.4, and

  • (d) the date on which a proposal is filed,

  pursuant to a prescribed system of registration.

• Marginal note:Idem

  (2) In relation to a bankruptcy or proposal, 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 make them effective 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.