Companies’ Creditors Arrangement Act

Marginal note:Stays, etc. — initial application

• 11.02 (1) A court may, on an initial application in respect of a debtor company, make an order on any terms that it may impose, effective for the period that the court considers necessary, which period may not be more than 10 days,

  • (a) staying, until otherwise ordered by the court, all proceedings taken or that might be taken in respect of the 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 company; and

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

• Marginal note:Stays, etc. — other than initial application

  (2) A court may, on an application in respect of a debtor company other than an initial application, make an order, on any terms that it may impose,

  • (a) staying, until otherwise ordered by the court, for any period that the court considers necessary, all proceedings taken or that might be taken in respect of the company under an Act referred to in paragraph (1)(a);

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

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

• Marginal note:Burden of proof on application

  (3) The court shall not make the order unless

  • (a) the applicant satisfies the court that circumstances exist that make the order appropriate; and

  • (b) in the case of an order under subsection (2), the applicant also satisfies the court that the applicant has acted, and is acting, in good faith and with due diligence.

• Marginal note:Restriction

  (4) Orders doing anything referred to in subsection (1) or (2) may only be made under this section.