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

Act current to 2020-12-28 and last amended on 2019-11-01. Previous Versions

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
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