Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada


Companies’ Creditors Arrangement Act

Version of section 11.2 from 2009-09-18 to 2019-10-31:

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.

  • 1997, c. 12, s. 124
  • 2005, c. 47, s. 128
  • 2007, c. 36, s. 65
Date modified: