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

Act current to 2020-11-02 and last amended on 2019-11-01. Previous Versions

PART IIJurisdiction of Courts (continued)

Meaning of regulatory body

  •  (1) In this section, regulatory body means a person or body that has powers, duties or functions relating to the enforcement or administration of an Act of Parliament or of the legislature of a province and includes a person or body that is prescribed to be a regulatory body for the purpose of this Act.

  • Marginal note:Regulatory bodies — order under section 11.02

    (2) Subject to subsection (3), no order made under section 11.02 affects a regulatory body’s investigation in respect of the debtor company or an action, suit or proceeding that is taken in respect of the company by or before the regulatory body, other than the enforcement of a payment ordered by the regulatory body or the court.

  • Marginal note:Exception

    (3) On application by the company and on notice to the regulatory body and to the persons who are likely to be affected by the order, the court may order that subsection (2) not apply in respect of one or more of the actions, suits or proceedings taken by or before the regulatory body if in the court’s opinion

    • (a) a viable compromise or arrangement could not be made in respect of the company if that subsection were to apply; and

    • (b) it is not contrary to the public interest that the regulatory body be affected by the order made under section 11.02.

  • Marginal note:Declaration — enforcement of a payment

    (4) If there is a dispute as to whether a regulatory body is seeking to enforce its rights as a creditor, the court may, on application by the company and on notice to the regulatory body, make an order declaring both that the regulatory body is seeking to enforce its rights as a creditor and that the enforcement of those rights is stayed.

  • 1997, c. 12, s. 124
  • 2001, c. 9, s. 576
  • 2005, c. 47, s. 128
  • 2007, c. 29, s. 106, c. 36, s. 65

 [Repealed, 2005, c. 47, s. 128]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.

  • Marginal note:Additional factor — initial application

    (5) When an application is made under subsection (1) at the same time as an initial application referred to in subsection 11.02(1) or during the period referred to in an order made under that subsection, no order shall be made under subsection (1) unless the court is also satisfied that the terms of the loan are limited to what is reasonably necessary for the continued operations of the debtor company in the ordinary course of business during that period.

  • 1997, c. 12, s. 124
  • 2005, c. 47, s. 128
  • 2007, c. 36, s. 65
  • 2019, c. 29, s. 138

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
 
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