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

Act current to 2020-05-17 and last amended on 2019-11-01. Previous Versions

PART IIIGeneral (continued)

Claims (continued)

Marginal note:Determination of amount of claims

  •  (1) For the purposes of this Act, the amount represented by a claim of any secured or unsecured creditor is to be determined as follows:

    • (a) the amount of an unsecured claim is the amount

      • (i) in the case of a company in the course of being wound up under the Winding-up and Restructuring Act, proof of which has been made in accordance with that Act,

      • (ii) in the case of a company that has made an authorized assignment or against which a bankruptcy order has been made under the Bankruptcy and Insolvency Act, proof of which has been made in accordance with that Act, or

      • (iii) in the case of any other company, proof of which might be made under the Bankruptcy and Insolvency Act, but if the amount so provable is not admitted by the company, the amount is to be determined by the court on summary application by the company or by the creditor; and

    • (b) the amount of a secured claim is the amount, proof of which might be made under the Bankruptcy and Insolvency Act if the claim were unsecured, but the amount if not admitted by the company is, in the case of a company subject to pending proceedings under the Winding-up and Restructuring Act or the Bankruptcy and Insolvency Act, to be established by proof in the same manner as an unsecured claim under the Winding-up and Restructuring Act or the Bankruptcy and Insolvency Act, as the case may be, and, in the case of any other company, the amount is to be determined by the court on summary application by the company or the creditor.

  • Marginal note:Admission of claims

    (2) Despite subsection (1), the company may admit the amount of a claim for voting purposes under reserve of the right to contest liability on the claim for other purposes, and nothing in this Act, the Winding-up and Restructuring Act or the Bankruptcy and Insolvency Act prevents a secured creditor from voting at a meeting of secured creditors or any class of them in respect of the total amount of a claim as admitted.

  • R.S., 1985, c. C-36, s. 20
  • 2005, c. 47, s. 131
  • 2007, c. 36, s. 70

Marginal note:Law of set-off or compensation to apply

 The law of set-off or compensation applies to all claims made against a debtor company and to all actions instituted by it for the recovery of debts due to the company in the same manner and to the same extent as if the company were plaintiff or defendant, as the case may be.

  • 1997, c. 12, s. 126
  • 2005, c. 47, s. 131

Classes of Creditors

Marginal note:Company may establish classes

  •  (1) A debtor company may divide its creditors into classes for the purpose of a meeting to be held under section 4 or 5 in respect of a compromise or arrangement relating to the company and, if it does so, it is to apply to the court for approval of the division before the meeting is held.

  • Marginal note:Factors

    (2) For the purpose of subsection (1), creditors may be included in the same class if their interests or rights are sufficiently similar to give them a commonality of interest, taking into account

    • (a) the nature of the debts, liabilities or obligations giving rise to their claims;

    • (b) the nature and rank of any security in respect of their claims;

    • (c) the remedies available to the creditors in the absence of the compromise or arrangement being sanctioned, and the extent to which the creditors would recover their claims by exercising those remedies; and

    • (d) any further criteria, consistent with those set out in paragraphs (a) to (c), that are prescribed.

  • Marginal note:Related creditors

    (3) A creditor who is related to the company may vote against, but not for, a compromise or arrangement relating to the company.

  • 1997, c. 12, s. 126
  • 2005, c. 47, s. 131
  • 2007, c. 36, s. 71

Marginal note:Class — creditors having equity claims

 Despite subsection 22(1), creditors having equity claims are to be in the same class of creditors in relation to those claims unless the court orders otherwise and may not, as members of that class, vote at any meeting unless the court orders otherwise.

  • 2005, c. 47, s. 131
  • 2007, c. 36, s. 71

Monitors

Marginal note:Duties and functions

  •  (1) The monitor shall

    • (a) except as otherwise ordered by the court, when an order is made on the initial application in respect of a debtor company,

      • (i) publish, without delay after the order is made, once a week for two consecutive weeks, or as otherwise directed by the court, in one or more newspapers in Canada specified by the court, a notice containing the prescribed information, and

      • (ii) within five days after the day on which the order is made,

        • (A) make the order publicly available in the prescribed manner,

        • (B) send, in the prescribed manner, a notice to every known creditor who has a claim against the company of more than $1,000 advising them that the order is publicly available, and

        • (C) prepare a list, showing the names and addresses of those creditors and the estimated amounts of those claims, and make it publicly available in the prescribed manner;

    • (b) review the company’s cash-flow statement as to its reasonableness and file a report with the court on the monitor’s findings;

    • (c) make, or cause to be made, any appraisal or investigation the monitor considers necessary to determine with reasonable accuracy the state of the company’s business and financial affairs and the cause of its financial difficulties or insolvency and file a report with the court on the monitor’s findings;

    • (d) file a report with the court on the state of the company’s business and financial affairs — containing the prescribed information, if any —

      • (i) without delay after ascertaining a material adverse change in the company’s projected cash-flow or financial circumstances,

      • (ii) not later than 45 days, or any longer period that the court may specify, after the day on which each of the company’s fiscal quarters ends, and

      • (iii) at any other time that the court may order;

    • (d.1) file a report with the court on the state of the company’s business and financial affairs — containing the monitor’s opinion as to the reasonableness of a decision, if any, to include in a compromise or arrangement a provision that sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act do not apply in respect of the compromise or arrangement and containing the prescribed information, if any — at least seven days before the day on which the meeting of creditors referred to in section 4 or 5 is to be held;

    • (e) advise the company’s creditors of the filing of the report referred to in any of paragraphs (b) to (d.1);

    • (f) file with the Superintendent of Bankruptcy, in the prescribed manner and at the prescribed time, a copy of the documents specified in the regulations;

    • (f.1) for the purpose of defraying the expenses of the Superintendent of Bankruptcy incurred in performing his or her functions under this Act, pay the prescribed levy at the prescribed time to the Superintendent for deposit with the Receiver General;

    • (g) attend court proceedings held under this Act that relate to the company, and meetings of the company’s creditors, if the monitor considers that his or her attendance is necessary for the fulfilment of his or her duties or functions;

    • (h) if the monitor is of the opinion that it would be more beneficial to the company’s creditors if proceedings in respect of the company were taken under the Bankruptcy and Insolvency Act, so advise the court without delay after coming to that opinion;

    • (i) advise the court on the reasonableness and fairness of any compromise or arrangement that is proposed between the company and its creditors;

    • (j) make the prescribed documents publicly available in the prescribed manner and at the prescribed time and provide the company’s creditors with information as to how they may access those documents; and

    • (k) carry out any other functions in relation to the company that the court may direct.

  • Marginal note:Monitor not liable

    (2) If the monitor acts in good faith and takes reasonable care in preparing the report referred to in any of paragraphs (1)(b) to (d.1), the monitor is not liable for loss or damage to any person resulting from that person’s reliance on the report.

  • 2005, c. 47, s. 131
  • 2007, c. 36, s. 72
 
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