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 Section 11.7 of the Act is replaced by the following:

Marginal note:Court to appoint monitor
  • 11.7 (1) When an order is made on the initial application in respect of a debtor company, the court shall at the same time appoint a person to monitor the business and financial affairs of the company. The person so appointed must be a trustee, within the meaning of subsection 2(1) of the Bankruptcy and Insolvency Act.

  • Marginal note:Restrictions on who may be monitor

    (2) Except with the permission of the court and on any conditions that the court may impose, no trustee may be appointed as monitor in relation to a company

    • (a) if the trustee is or, at any time during the two preceding years, was

      • (i) a director, an officer or an employee of the company,

      • (ii) related to the company or to any director or officer of the company, or

      • (iii) the auditor, accountant or legal counsel, or a partner or an employee of the auditor, accountant or legal counsel, of the company; or

    • (b) if the trustee is

      • (i) the trustee under a trust indenture issued by the company or any person related to the company, or the holder of a power of attorney under an act constituting a hypothec within the meaning of the Civil Code of Quebec that is granted by the company or any person related to the company, or

      • (ii) related to the trustee, or the holder of a power of attorney, referred to in subparagraph (i).

  • Marginal note:Court may replace monitor

    (3) On application by a creditor of the company, the court may, if it considers it appropriate in the circumstances, replace the monitor by appointing another trustee, within the meaning of subsection 2(1) of the Bankruptcy and Insolvency Act, to monitor the business and financial affairs of the company.

 Section 12 of the Act is replaced by the following:

Marginal note:Fixing of deadline for filing claims

12. The court may make an order fixing a deadline for creditors to file their claims against a company for the purpose of voting at a creditors’ meeting held under section 4 or 5.

 Sections 18 to 22 of the Act are replaced by the following:

PART IIIGENERAL

Claims

Marginal note:Claims that may be dealt with by a compromise or an arrangement
  • 19. (1) Subject to subsection (2), in addition to deemed claims, the only claims that may be dealt with by a compromise or an arrangement in respect of a debtor company are

    • (a) claims that relate to debts and liabilities, present or future, to which the company is subject on the earlier of

      • (i) the day on which the initial application was made in respect of the company, and

      • (ii) if the company had filed a notice of intention under section 50.4 of the Bankruptcy and Insolvency Act or an application under this Act was made by the company with the consent of inspectors referred to in section 116 of the Bankruptcy and Insolvency Act, the day that is the date of the initial bankruptcy event within the meaning of subsection 2(1) of that Act; and

    • (b) claims that relate to debts and liabilities, present or future, to which the company may become subject before the compromise or arrangement is sanctioned by reason of any obligation incurred by the company before the earlier of the days referred to in subparagraphs (a)(i) and (ii).

  • Marginal note:Exception

    (2) A compromise or an arrangement in respect of a debtor company may not deal with any claim that relates to any of the following debts or liabilities unless the compromise or arrangement explicitly provides for the claim’s compromise and the relevant creditor has agreed to the compromise or arrangement:

    • (a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence;

    • (b) any award of damages by a court in civil proceedings in respect of

      • (i) bodily harm intentionally inflicted, or sexual assault, or

      • (ii) wrongful death resulting from an act referred to in subparagraph (i);

    • (c) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or an administrator of the property of others;

    • (d) any debt or liability for obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability of the company that arises from the purchase or sale of a share or unit of the company or from the rescission of any such purchase or sale; or

    • (e) any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (d).

Marginal note:Determination of amount of claims
  • 20. (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.

  • Marginal note:Claims acquired after initial application

    (3) No person is entitled to vote on a claim acquired after the initial application in respect of the company, unless the entire claim is acquired.

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

21. 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.

Classes of Creditors

Marginal note:Company may establish classes
  • 22. (1) Subject to subsection (3), 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 an arrangement relating to a company and, if it does so, it must apply to the court for approval of the division before any meeting is held.

  • Marginal note:Factors

    (2) For the purpose of subsection (1), creditors may be included in the same class if their interests 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:Claims of shareholders

    (3) Creditors having a claim against a debtor company arising from the rescission of a purchase or sale of a share or unit of the company — or a claim for damages arising from the purchase or sale of a share or unit of the company — must be in the same class of creditors in relation to those claims and may not, as members of that class, vote at a meeting to be held under section 4 in respect of a compromise or an arrangement relating to the company.

Monitors

Marginal note:Duties and functions
  • 23. (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 order is made,

        • (A) send a copy of the order to every known creditor who has a claim against the company of more than $1,000, and

        • (B) make a list showing the name and address of those creditors 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 prescribed information,

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

      • (ii) at least seven days before any meeting of creditors under section 4 or 5,

      • (iii) not later than 45 days, or any longer period that the court may specify, after the end of each of the company’s fiscal quarters, and

      • (iv) at any other times that the court may order;

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

    • (f) file with the Superintendent of Bankruptcy a copy of the documents specified by the regulations and pay the prescribed filing fee;

    • (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) unless the court otherwise orders, make publicly available, in the prescribed manner, all documents filed with the court, and all court decisions, relating to proceedings held under this Act in respect the company and provide the company’s creditors with information as to how they may access those documents and decisions; 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), the monitor is not liable for loss or damage to any person resulting from that person’s reliance on the report.

Marginal note:Right of access

24. For the purposes of monitoring the company’s business and financial affairs, the monitor shall have access to the company’s property, including the premises, books, records, data, including data in electronic form, and other financial documents of the company, to the extent that is necessary to adequately assess the company’s business and financial affairs.

Marginal note:Obligation to act honestly and in good faith

25. In exercising any of his or her powers or in performing any of his or her duties and functions, the monitor must act honestly and in good faith and comply with the Code of Ethics referred to in section 13.5 of the Bankruptcy and Insolvency Act.

Powers, Duties and Functions of Superintendent of Bankruptcy

Marginal note:Public records
  • 26. (1) The Superintendent of Bankruptcy must keep, or cause to be kept, in the form that he or she considers appropriate and for the prescribed period, a public record of prescribed information relating to proceedings under this Act. On request, and on payment of the prescribed fee, the Superintendent of Bankruptcy must provide, or cause to be provided, any information contained in that public record.

  • Marginal note:Other records

    (2) The Superintendent of Bankruptcy must keep, or cause to be kept, in the form that he or she considers appropriate and for the prescribed period, any other records relating to the administration of this Act that he or she considers appropriate.

Marginal note:Applications to court and right to intervene

27. The Superintendent of Bankruptcy may apply to the court to review the appointment or conduct of a monitor and may intervene, as though he or she were a party, in any matter or proceeding in court relating to the appointment or conduct of a monitor.

Marginal note:Complaints

28. The Superintendent of Bankruptcy must receive and keep a record of all complaints regarding the conduct of monitors.

Marginal note:Investigations
  • 29. (1) The Superintendent of Bankruptcy may make, or cause to be made, any inquiry or investigation regarding the conduct of monitors that he or she considers appropriate.

  • Marginal note:Rights

    (2) For the purpose of the inquiry or investigation, the Superintendent of Bankruptcy or any person whom he or she appoints for the purpose

    • (a) shall have access to and the right to examine and make copies of all books, records, data, including data in electronic form, documents and papers in the possession or under the control of a monitor under this Act; and

    • (b) may, with the leave of the court granted on an ex parte application, examine the books, records, data, including data in electronic form, documents and papers relating to any compromise or arrangement to which this Act applies that are in the possession or under the control of any other person designated in the order granting the leave, and for that purpose may under a warrant from the court enter and search any premises.

  • Marginal note:Staff

    (3) The Superintendent of Bankruptcy may engage the services of persons having technical or specialized knowledge, and persons to provide administrative services, to assist the Superintendent of Bankruptcy in conducting an inquiry or investigation, and may establish the terms and conditions of their engagement. The remuneration and expenses of those persons, when certified by the Superintendent of Bankruptcy, are payable out of the appropriation for the office of the Superintendent.

Marginal note:Powers in relation to licence
  • 30. (1) If, after making or causing to be made an inquiry or investigation into the conduct of a monitor, it appears to the Superintendent of Bankruptcy that the monitor has not fully complied with this Act and its regulations or that it is in the public interest to do so, the Superintendent of Bankruptcy may

    • (a) cancel or suspend the monitor’s licence as a trustee under the Bankruptcy and Insolvency Act; or

    • (b) place any condition or limitation on the licence that he or she considers appropriate.

  • Marginal note:Notice to trustee

    (2) Before deciding whether to exercise any of the powers referred to in subsection (1), the Superintendent of Bankruptcy shall send the monitor written notice of the powers that the Superintendent may exercise and the reasons why they may be exercised and afford the monitor a reasonable opportunity for a hearing.

  • Marginal note:Subpoena or summons

    (3) The Superintendent of Bankruptcy may, for the purpose of the hearing, issue a subpoena or other request or summons, requiring and commanding any person named in it

    • (a) to appear at the time and place mentioned in it;

    • (b) to testify to all matters within his or her knowledge relative to the subject-matter of the inquiry or investigation into the conduct of the monitor; and

    • (c) to bring and produce any books, records, data, including data in electronic form, documents or papers in the person’s possession or under the control of the person relative to the subject-matter of the inquiry or investigation.

  • Marginal note:Effect throughout Canada

    (4) A person may be summoned from any part of Canada by virtue of a subpoena, request or summons issued under subsection (3).

  • Marginal note:Fees and allowances

    (5) Any person summoned under subsection (3) is entitled to receive the like fees and allowances for so doing as if summoned to attend before the Federal Court.

  • Marginal note:Procedure at hearing

    (6) At the hearing, the Superintendent of Bankruptcy

    • (a) has the power to administer oaths;

    • (b) is not bound by any legal or technical rules of evidence in conducting the hearing;

    • (c) shall deal with the matters set out in the notice of the hearing as informally and expeditiously as the circumstances and a consideration of fairness permit; and

    • (d) shall cause a summary of any oral evidence to be made in writing.

  • Marginal note:Record

    (7) The notice referred to in subsection (2) and, if applicable, the summary of oral evidence referred to in paragraph (6)(d), together with any documentary evidence that the Superintend­ent of Bankruptcy receives in evidence, form the record of the hearing, and that record and the hearing are public unless the Superintendent of Bankruptcy is satisfied that personal or other matters that may be disclosed are of such a nature that the desirability of avoiding public disclosure of those matters, in the interest of a third party or in the public interest, outweighs the desirability of the access by the public to information about those matters.

  • Marginal note:Decision

    (8) The decision of the Superintendent of Bankruptcy after the hearing, together with the reasons for the decision, must be given in writing to the monitor not later than three months after the conclusion of the hearing, and is public.

  • Marginal note:Review by Federal Court

    (9) A decision of the Superintendent of Bankruptcy given under subsection (8) is deemed to be a decision of a federal board, commission or other tribunal that may be reviewed and set aside under the Federal Courts Act.

Marginal note:Delegation
  • 31. (1) The Superintendent of Bankruptcy may, in writing, authorize any person to exercise or perform, subject to any terms and conditions that he or she may specify in the authorization, any of the powers, duties or functions of the Superintendent of Bankruptcy under sections 29 and 30.

  • Marginal note:Notification to monitor

    (2) If the Superintendent of Bankruptcy delegates in accordance with subsection (1), the Superintendent or the delegate must give notice of the delegation in the prescribed manner to any monitor who may be affected by the delegation.

Agreements

Marginal note:Disclaimer or resiliation of agreements
  • 32. (1) Subject to subsection (3), a debtor company may disclaim or resiliate any agreement to which it is a party on the day of the filing of the initial application in respect of the company by giving 30 days notice to the other parties to the agreement in the prescribed manner.

  • Marginal note:Exceptions

    (2) Subsection (1) does not apply in respect of

    • (a) an eligible financial contract within the meaning of subsection 11.05(3);

    • (b) a collective agreement;

    • (c) a financing agreement if the debtor is the borrower; and

    • (d) a lease of real property or an immovable if the debtor is the lessor.

  • Marginal note:Party may challenge

    (3) Within 15 days after being given notice of the disclaimer or resiliation, a party to the agreement may apply to the court for a declaration that subsection (1) does not apply in respect of the agreement, and the court, on notice to any parties that it may direct, shall, subject to subsection (4), make that declaration.

  • Marginal note:Circumstances for not making declaration

    (4) No declaration under subsection (3) shall be made if the court is satisfied that a viable compromise or arrangement could not be made in respect of the company without the disclaim­er or resiliation of the agreement and all other agreements that the company has disclaimed or resiliated under subsection (1).

  • Marginal note:Intellectual property

    (5) If the company has, in any agreement, granted the use of any intellectual property to a party to the agreement, the disclaimer or resiliation of the agreement does not affect the party’s right to use the intellectual property so long as that party continues to perform its obligations in relation to the use of the intellectual property.

  • Marginal note:Deemed claim of other party

    (6) If an agreement is disclaimed or resiliated by a company, every other party to the agreement is deemed to have a claim for damages as an unsecured creditor.

Marginal note:Collective agreements
  • 33. (1) If proceedings under this Act have been commenced in respect of a debtor company, any collective agreement that the company has entered into as the employer remains in force, and may not be altered except as provided in this section or under the laws of the jurisdiction governing collective bargaining between the company and the bargaining agent.

  • Marginal note:Application for authorization to serve notice to bargain

    (2) A debtor company that is a party to a collective agreement and that is unable to reach a voluntary agreement with the bargaining agent to revise any of the provisions of the collective agreement may, on giving five days notice to the bargaining agent, apply to the court for an order authorizing the company to serve a notice to bargain under the laws of the jurisdiction governing collective bargaining between the company and the bargaining agent.

  • Marginal note:Conditions for issuance of order

    (3) The court may issue the order only if it is satisfied that

    • (a) a viable compromise or arrangement could not be made in respect of the company, taking into account the terms of the collective agreement;

    • (b) the company has made good faith efforts to renegotiate the provisions of the collective agreement; and

    • (c) a failure to issue the order is likely to result in irreparable damage to the company.

  • Marginal note:No delay on vote

    (4) The vote of the creditors in respect of a compromise or an arrangement may not be delayed solely because the period provided in the laws of the jurisdiction governing collective bargaining between the company and the bargaining agent has not expired.

  • Marginal note:Claims arising from termination or amendment

    (5) If the parties to the collective agreement agree to revise the collective agreement after proceedings have been commenced under this Act in respect of the company, the bargaining agent that is a party to the agreement is deemed to have a claim, as an unsecured creditor, for an amount equal to the value of concessions granted by the bargaining agent with respect to the remaining term of the collective agreement.

  • Marginal note:Order to disclose information

    (6) On the application of the bargaining agent and on notice to the person to whom the application relates, the court may, subject to any terms and conditions it specifies, make an order requiring the person to make available to the bargaining agent any information specified by the court in the person’s possession or control that relates to the company’s business or financial affairs and that is relevant to the collective bargaining between the company and the bargaining agent. The court may make the order only after the company has been authorized to serve a notice to bargain under subsection (2).

  • Marginal note:Parties

    (7) For the purpose of this section, the parties to a collective agreement are the debtor company and the bargaining agent that are bound by the collective agreement.

  • Marginal note:Unrevised collective agreements remain in force

    (8) For greater certainty, any collective agreement that the company and the bargaining agent have not agreed to revise remains in force, and the court shall not alter its terms.

Marginal note:Certain rights limited
  • 34. (1) No person may terminate or amend any agreement, including a security agreement, with a debtor company, or claim an accelerated payment, or a forfeiture of the term, under any agreement, including a security agreement, with a debtor company by reason only that an order has been made under this Act in respect of the company.

  • Marginal note:Lease

    (2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend the lease by reason only that an order has been made under this Act in respect of the company or that the company has not paid rent in respect of any period before the filing of the initial application in respect of the company.

  • Marginal note:Public utilities

    (3) No public utility may discontinue service to a debtor company by reason only that an order has been made under this Act in respect of the company or that the company has not paid for services rendered, or for goods provided, before the filing of the initial application in respect of the company.

  • Marginal note:Certain acts not prevented

    (4) Nothing in this section is to be construed as

    • (a) prohibiting a person from requiring payments to be made in cash for goods, services, use of leased property or other valuable consideration provided after the date of the filing of initial application in respect of the company; or

    • (b) requiring the further advance of money or credit.

  • Marginal note:Provisions of section override agreement

    (5) Any provision in an agreement that has the effect of providing for, or permitting, anything that, in substance, is contrary to this section is of no force or effect.

  • Marginal note:Powers of court

    (6) The court may, on application by a party to an agreement, declare that this section does not apply, or applies only to the extent declared by the court, if the applicant satisfies the court that the operation of this section would likely cause the applicant significant financial hardship.

Obligations and Prohibitions

Marginal note:Obligation to provide assistance
  • 35. (1) A debtor company shall provide to the monitor the assistance that is necessary to enable the monitor to adequately carry out the monitor’s functions.

  • Marginal note:Obligation to duties set out in section 158 of the Bankruptcy and Insolvency Act

    (2) A debtor company shall perform the duties set out in section 158 of the Bankruptcy and Insolvency Act that are appropriate and applicable in the circumstances

Marginal note:Restriction on disposal of certain business assets
  • 36. (1) A debtor company in respect of which an order has been made under this Act may not sell or dispose of any of its assets outside the ordinary course of its business unless authorized to do so by a court.

  • Marginal note:Notice to creditors

    (2) A company that applies to the court for the authorization must give notice of the application to all secured creditors who are likely to be affected by the proposed sale or disposal of the assets to which the application relates.

  • Marginal note:Factors to be considered

    (3) In deciding whether to grant the authorization, the court must consider, among other things,

    • (a) whether the process leading to the proposed sale or disposal of the assets to which the application relates was reasonable in the circumstances;

    • (b) whether the monitor approved the process leading to the proposed sale or disposal of the assets;

    • (c) whether the monitor has filed with the court a report stating that in his or her opinion the sale or disposal of the assets would be more beneficial to the creditors than if the sale or disposal took place under the Bankruptcy and Insolvency Act;

    • (d) the extent to which the creditors were consulted in respect of the proposed sale or disposal of the assets;

    • (e) the effects of the proposed sale or disposal on the creditors and other interested parties; and

    • (f) whether the consideration to be received for the assets is reasonable and fair, taking into account the market value of the assets.

  • Marginal note:Additional factors

    (4) In addition to taking the factors referred to in subsection (3) into account, if the proposed sale or disposal of the assets is to a person who is related to the company, the court may grant the authorization only if it is satisfied that

    • (a) good faith efforts were made to sell or dispose of the assets to persons who are not related to the company or who are neither directors or officers of the company nor individuals who control it; and

    • (b) the consideration to be received is superior to the consideration that would be received under all other offers actually received in respect of the assets.

  • Marginal note:Direction that assets may be sold free of charges, etc.

    (5) In granting an authorization for the sale or disposal of assets, the court may order that the assets may be sold or disposed of free and clear of any security, charge or other restriction, but if it so orders, it shall also order that the proceeds realized from the sale or disposal of the assets are subject to a security, charge or other restriction in favour of the creditors whose security, charges or other restrictions are affected by the order.

  • Marginal note:Related persons

    (6) For the purpose of this section, a person who is related to the debtor company includes a person who controls the company, a director or an officer of the company and a person who is related to a director or an officer of the company.

Her Majesty

Marginal note:Deemed trusts
  • 37. (1) Subject to subsection (2), despite any provision in federal or provincial legislation that has the effect of deeming property to be held in trust for Her Majesty, property of a debtor company shall not be regarded as being held in trust for Her Majesty unless it would be so regarded in the absence of that statutory provision.

  • Marginal note:Exceptions

    (2) Subsection (1) does not apply in respect of amounts deemed to be held in trust under subsection 227(4) or (4.1) of the Income Tax Act, subsection 23(3) or (4) of the Canada Pension Plan or subsection 86(2) or (2.1) of the Employment Insurance Act (each of which is in this subsection referred to as a “federal provision”), nor does it apply in respect of amounts deemed to be held in trust under any law of a province that creates a deemed trust the sole purpose of which is to ensure remittance to Her Majesty in right of the province of amounts deducted or withheld under a law of the province if

    • (a) that law of the province imposes a tax similar in nature to the tax imposed under the Income Tax Act and the amounts deducted or withheld under that law of the province are of the same nature as the amounts referred to in subsection 227(4) or (4.1) of the Income Tax Act, or

    • (b) the province is a “province providing a comprehensive pension plan” as defined in subsection 3(1) of the Canada Pension Plan, that law of the province establishes a “provincial pension plan” as defined in that subsection and the amounts deducted or withheld under that law of the province are of the same nature as amounts referred to in subsection 23(3) or (4) of the Canada Pension Plan,

    and for the purpose of this subsection, any provision of a law of a province that creates a deemed trust is, despite any Act of Canada or of a province or any other law, deemed to have the same effect and scope against any creditor, however secured, as the corresponding federal provision.

Marginal note:Status of Crown claims
  • 38. (1) In relation to a proceeding under this Act, all claims, including secured claims, of Her Majesty in right of Canada or a province or any body under an enactment respecting workers’ compensation, in this section and in section 39 called a “workers’ compensation body”, rank as unsecured claims.

  • Marginal note:Exceptions

    (2) Subsection (1) does not apply

    • (a) in respect of claims that are secured by a security or charge of a kind that can be obtained by persons other than Her Majesty or a workers’ compensation body

      • (i) pursuant to any law, or

      • (ii) pursuant to provisions of federal or provincial legislation if those provisions do not have as their sole or principal purpose the establishment of a means of securing claims of Her Majesty or a workers’ compensation body; and

    • (b) to the extent provided in subsection 39(2), to claims that are secured by a security referred to in subsection 39(1), if the security is registered in accordance with subsection 39(1).

  • Marginal note:Operation of similar legislation

    (3) Subsection (1) does not affect the operation of

    • (a) subsections 224(1.2) and (1.3) of the Income Tax Act,

    • (b) any provision of the Canada Pension Plan or of the Employment Insurance Act that refers to subsection 224(1.2) of the Income Tax Act and provides for the collection of a contribution, as defined in the Canada Pension Plan, or an employee’s premium, or employer’s premium, as defined in the Employment Insurance Act, and of any related interest, penalties or other amounts, or

    • (c) any provision of provincial legislation that has a purpose similar to subsection 224(1.2) of the Income Tax Act, or that refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts if the sum

      • (i) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, or

      • (ii) is of the same nature as a contribution under the Canada Pension Plan if the province is a “province providing a comprehensive pension plan” as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a “provincial pension plan” as defined in that subsection,

    and, for the purpose of paragraph (c), the provision of provincial legislation is, despite any Act of Canada or of a province or any other law, deemed to have the same effect and scope against any creditor, however secured, as subsection 224(1.2) of the Income Tax Act in respect of a sum referred to in subparagraph (c)(i), or as subsection 23(2) of the Canada Pension Plan in respect of a sum referred to in subparagraph (c)(ii), and in respect of any related interest, penalties or other amounts.

Marginal note:Statutory Crown securities
  • 39. (1) In relation to a proceeding under this Act in respect of a debtor company, 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 a workers’ compensation body is valid in relation to claims against the company only if the security is registered before the date of the filing of the initial application in respect of the company under any system of registration of securities that is available not only to Her Majesty in right of Canada or a province or a workers’ compensation body, but also to any other creditor who holds a security, and that is open to the public for information or the making of searches.

  • Marginal note:Effect of security

    (2) 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 setting them up 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.

Marginal note:Act binding on Her Majesty

40. This Act is binding on Her Majesty in right of Canada or a province.

Miscellaneous

Marginal note:Certain sections of Winding-up and Restructuring Act do not apply

41. Sections 65 and 66 of the Winding-up and Restructuring Act do not apply to any compromise or arrangement to which this Act applies.

Marginal note:Act to be applied conjointly with other Acts

42. The provisions of this Act may be applied together with the provisions of any Act of Parliament, or of the legislature of any province, that authorizes or makes provision for the sanction of compromises or arrangements between a company and its shareholders or any class of them.

Marginal note:Claims in foreign currency

43. If a compromise or an arrangement is proposed in respect of a debtor company, a claim for a debt that is payable in a currency other than Canadian currency is to be converted to Canadian currency as of the date of the initial application in respect of the company unless otherwise provided in the proposed compromise or arrangement.

PART IVCROSS-BORDER INSOLVENCIES

Purpose

Marginal note:Purpose

44. The purpose of this Part is to provide mechanisms for dealing with cases of cross-border insolvencies and to promote

  • (a) cooperation between the courts and other competent authorities in Canada with those of foreign jurisdictions in cases of cross-border insolvencies;

  • (b) greater legal certainty for trade and investment;

  • (c) the fair and efficient administration of cross-border insolvencies that protects the interests of creditors and other interested persons, and those of debtor companies;

  • (d) the protection and the maximization of the value of debtor company’s property; and

  • (e) the rescue of financially troubled businesses to protect investment and preserve employment.

Interpretation

Marginal note:Definitions
  • 45. (1) The following definitions apply in this Part.

    “foreign court”

    « tribunal étranger »

    “foreign court” means a judicial or other authority competent to control or supervise a foreign proceeding.

    “foreign main proceeding”

    « principale »

    “foreign main proceeding” means a foreign proceeding in a jurisdiction where the debtor company has the centre of its main interests.

    “foreign non-main proceeding”

    « secondaire »

    “foreign non-main proceeding” means a foreign proceeding, other than a foreign main proceeding.

    “foreign proceeding”

    « instance étrangère »

    “foreign proceeding” means a judicial or an administrative proceeding, including an interim proceeding, in a jurisdiction outside Canada dealing with creditors’ collective interests generally under any law relating to bankruptcy or insolvency in which a debtor company’s business and financial affairs are subject to control or supervision by a foreign court for the purpose of reorganization.

    “foreign representative”

    « représentant étranger »

    “foreign representative” means a person or body, including one appointed on an interim basis, who is authorized, in a foreign proceeding respect of a debtor company, to

    • (a) monitor the debtor company’s business and financial affairs for the purpose of reorganization; or

    • (b) act as a representative in respect of the foreign proceeding.

  • Marginal note:Centre of debtor company’s main interests

    (2) For the purposes of this Part, in the absence of proof to the contrary, a debtor company’s registered office is deemed to be the centre of its main interests.

Recognition of Foreign Proceeding

Marginal note:Application for recognition of a foreign proceeding
  • 46. (1) A foreign representative may apply to the court for recognition of the foreign proceeding in respect of which he or she is a foreign representative.

  • Marginal note:Documents that must accompany application

    (2) Subject to subsection (3), the application must be accompanied by

    • (a) a certified copy of the instrument, however designated, that commenced the foreign proceeding or a certificate from the foreign court affirming the existence of the foreign proceeding;

    • (b) a certified copy of the instrument, however designated, authorizing the foreign representative to act in that capacity or a certificate from the foreign court affirming the foreign representative’s authority to act in that capacity; and

    • (c) a statement identifying all foreign proceedings in respect of the debtor company that are known to the foreign representative.

  • Marginal note:Documents may be considered as proof

    (3) The court may, without further proof, accept the documents referred to in paragraphs (2)(a) and (b) as evidence that the proceeding to which they relate is a foreign proceeding and that the applicant is a foreign representative in respect of the foreign proceeding.

  • Marginal note:Other evidence

    (4) In the absence of the documents referred to in paragraphs (2)(a) and (b), the court may accept any other evidence of the existence of the foreign proceeding and of the foreign represent­ative’s authority that it considers appropriate.

  • Marginal note:Translation

    (5) The court may require a translation of any document accompanying the application.

Marginal note:Order recognizing foreign proceeding
  • 47. (1) If the court is satisfied that the application for the recognition of a foreign proceeding relates to a foreign proceeding and that the applicant is a foreign representative in respect of that foreign proceeding, the court shall make an order recognizing the foreign proceeding.

  • Marginal note:Nature of foreign proceeding to be specified

    (2) The court shall specify in the order whether the foreign proceeding is a foreign main proceeding or a foreign non-main proceeding.

Marginal note:Order relating to recognition of a foreign main proceeding
  • 48. (1) Subject to subsections (2) to (4), on the making of an order recognizing a foreign proceeding that is specified to be a foreign main proceeding, the court shall make an order, subject to any terms and conditions it considers appropriate,

    • (a) staying, until otherwise ordered by the court, for any period that the court considers necessary, all proceedings taken or that might be taken against the debtor company under the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act;

    • (b) restraining, until otherwise ordered by the court, further proceedings in any action, suit or proceeding against the debtor company;

    • (c) prohibiting, until otherwise ordered by the court, the commencement of any action, suit or proceeding against the debtor company; and

    • (d) prohibiting the debtor company from selling or otherwise disposing of, outside the ordinary course of its business, any of the debtor company’s property in Canada that relates to the business and prohibiting the debtor company from selling or otherwise disposing of any of its other property in Canada.

  • Marginal note:Scope of order

    (2) The order made under subsection (1) must be consistent with any order that may be made under this Act.

  • Marginal note:When subsec- tion (1) does not apply

    (3) Subsection (1) does not apply if any proceedings under this Act have been commenced in respect of the debtor company at the time the order recognizing the foreign proceeding is made.

  • Marginal note:Application of this and other Acts

    (4) Nothing in subsection (1) precludes the debtor company from commencing or continuing proceedings under this Act, the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act in respect of the debtor company.

Marginal note:Other orders
  • 49. (1) If an order recognizing a foreign proceeding is made, the court may, on application by the foreign representative who applied for the order, if the court is satisfied that it is necessary for the protection of the debtor company’s property or the interests of a creditor or creditors, make any order that it considers appropriate, including an order

    • (a) if the foreign proceeding is a foreign non-main proceeding, referred to in subsection 48(1);

    • (b) respecting the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor company’s property, business and financial affairs, debts, liabilities and obligations; and

    • (c) authorizing the foreign representative to monitor the debtor company’s business and financial affairs in Canada for the purpose of reorganization.

  • Marginal note:Restriction

    (2) If any proceedings under this Act have been commenced in respect of the debtor company at the time an order recognizing the foreign proceeding is made, an order made under subsection (1) must be consistent with any order that may be made in any proceedings under this Act.

  • Marginal note:Application of this and other Acts

    (3) The making of an order under paragraph (1)(a) does not preclude the commencement or the continuation of proceedings under this Act, the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act in respect of the debtor company.

Marginal note:Terms and conditions of orders

50. An order under this Part may be made on any terms and conditions that the court considers appropriate in the circumstances.

Marginal note:Commencement or continuation of proceedings

51. If an order is made recognizing a foreign proceeding, the foreign representative may commence and continue proceedings under this Act in respect of a debtor company as if the foreign representative were a creditor of the debtor company, or the debtor company, as the case may be.

Obligations

Marginal note:Cooperation — court
  • 52. (1) If an order recognizing a foreign proceeding is made, the court shall cooperate, to the maximum extent possible, with the foreign representative and the foreign court involved in the foreign proceeding.

  • Marginal note:Cooperation — other authorities in Canada

    (2) If any proceedings under this Act have been commenced in respect of a debtor company and an order recognizing a foreign proceeding is made in respect of the debtor company, every person who exercises powers or performs duties and functions under the proceedings under this Act shall cooperate, to the maximum extent possible, with the foreign representative and the foreign court involved in the foreign proceeding.

Marginal note:Obligations of foreign representative

53. If an order recognizing a foreign proceeding is made, the foreign representative who applied for the order shall

  • (a) without delay, inform the court of

    • (i) any substantial change in the status of the recognized foreign proceeding,

    • (ii) any substantial change in the status of the foreign representative’s authority to act in that capacity, and

    • (iii) any other foreign proceeding in respect of the same debtor company that becomes known to the foreign representa­tive; and

  • (b) 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.

Multiple Proceedings

Marginal note:Concurrent proceedings

54. If any proceedings under this Act in respect of a debtor company are commenced at any time after an order recognizing the foreign proceeding is made, the court shall review any order made under section 49 and, if it determines that the order is inconsistent with any orders made in the proceedings under this Act, the court shall amend or revoke the order.

Marginal note:Multiple foreign proceedings
  • 55. (1) If, at any time after an order is made in respect of a foreign non-main proceeding in respect of a debtor company, an order recognizing a foreign main proceeding is made in respect of the debtor company, the court shall review any order made under section 49 in respect of the foreign non-main proceeding and, if it determines that the order is inconsistent with any orders made under that section in respect of the foreign main proceedings, the court shall amend or revoke the order.

  • Marginal note:Multiple foreign proceedings

    (2) If, at any time after an order is made in respect of a foreign non-main proceeding in respect of the debtor company, an order recognizing another foreign non-main proceeding is made in respect of the debtor company, the court shall, for the purpose of facilitating the coordination of the foreign non-main proceedings, review any order made under section 49 in respect of the first recognized proceeding and amend or revoke the order if it considers it appropriate.

Miscellaneous Provisions

Marginal note:Authorization to act as representative of proceeding under this Act

56. The court may authorize any person or body to act as a representative in respect of any proceeding under this Act for the purpose of having them recognized in a jurisdiction outside Canada.

Marginal note:Foreign representative status

57. An application by a foreign representa­tive for any order under this Part does not submit the foreign representative to the jurisdiction of the court for any other purpose except with regard to the costs of the proceedings, but the court may make any order under this Part conditional on the compliance by the foreign representative with any other order of the court.

Marginal note:Foreign proceeding appeal

58. A foreign representative is not prevented from making an application to the court under this Part by reason only that proceedings by way of appeal or review have been taken in a foreign proceeding, and the court may, on an application if such proceedings have been taken, grant relief as if the proceedings had not been taken.

Marginal note:Presumption of insolvency

59. For the purposes of this Part, if an insolvency or a reorganization or a similar order has been made in respect of a debtor company in a foreign proceeding, a certified copy of the order is, in the absence of evidence to the contrary, proof that the debtor company is insolvent and proof of the appointment of the foreign representative made by the order.

Marginal note:Credit for recovery in other jurisdictions
  • 60. (1) In making a compromise or an arrangement of a debtor company, the following shall be taken into account in the distribution of dividends to the company’s creditors in Canada as if they were a part of that distribution:

    • (a) the amount that a creditor receives or is entitled to receive outside Canada by way of a dividend in a foreign proceeding in respect of the company; and

    • (b) the value of any property of the company that the creditor acquires outside Canada on account of a provable claim of the creditor or that the creditor acquires outside Canada by way of a transfer that, if it were subject to this Act, would be a preference over other creditors or a transfer at undervalue.

  • Marginal note:Restriction

    (2) Despite subsection (1), the creditor is not entitled to receive a dividend from the distribution in Canada until every other creditor who has a claim of equal rank in the order of priority established under this Act has received a dividend whose amount is the same percentage of that other creditor’s claim as the aggregate of the amount referred to in paragraph (1)(a) and the value referred to in paragraph (1)(b) is of that creditor’s claim.

Marginal note:Court not prevented from applying certain rules
  • 61. (1) Nothing in this Part prevents the court, on the application of a foreign represent­ative or any other interested person, from applying any legal or equitable rules governing the recognition of foreign insolvency orders and assistance to foreign representatives that are not inconsistent with the provisions of this Act.

  • Marginal note:Court not compelled to give effect to certain orders

    (2) Nothing in this Part requires the court to make any order that is not in compliance with the laws of Canada or to enforce any order made by a foreign court.

PART VADMINISTRATION

Marginal note:Regulations

62. The Minister may make regulations for carrying out the purposes and provisions of this Act, including regulations

  • (a) specifying documents for the purpose of paragraph 23(1)(f); and

  • (b) prescribing anything that by this Act is to be prescribed.

Marginal note:Review of Act
  • 63. (1) Within five years after the coming into force of this section, the Minister shall cause to be laid before both Houses of Parliament a report on the provisions and operation of this Act, including any recommendations for amendments to those provisions.

  • Marginal note:Reference to parliamentary committee

    (2) The report stands referred to the committee of the Senate, the House of Commons or both Houses of Parliament that is designated or established for that purpose, which shall

    • (a) as soon as possible after the laying of the report, review the report; and

    • (b) report to the Senate, the House of Commons or both Houses of Parliament, as the case may be, within one year after the laying of the report of the Minister, or any further time authorized by the Senate, the House of Commons or both Houses of Parliament.

 

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