A Guide for Insolvent Corporations[1]

Economies around the world have faced unique challenges in the past year; the Canadian economy is no exception.  In tumultuous economic times, business owners must remain informed of the options and procedures available to them under the legislative schemes for bankruptcy, insolvency and restructuring.  The following is a guide outlining the legislative and procedural landscape of bankruptcy in Canada.

Although each province has legislation dealing with various aspects of insolvency, debtor companies in Canada are governed by two pieces of federal legislation, the Bankruptcy and Insolvency Act[2]  (“BIA”) and the Companies Creditors Arrangement Act[3] (“CCAA”).  Both are vehicles for dealing with a company in trouble and each statute offers unique benefits.  The fundamental difference between the two statutes is the eligibility requirements under each.  The BIA can be accessed by both individual persons and companies whereas the CCAA can only be accessed by companies.  Secondly, to be eligible under the CCAA, a debtor company must have total claims exceeding five million dollars[4].  Generally, the CCAA is recognized for offering debtors greater flexibility and latitude in the restructuring process over the BIA.  This paper will examine each of the statutes and explore the unique restructuring tools under each as well as discuss the receivership process.

Under the BIA, an “insolvent person” is defined as a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under the BIA amount to $1000 and (1) is unable to meet its obligations as they generally become due; (2)has ceased paying its current obligations in the ordinary course of business as they generally become due; or (3) the aggregate of whose property is not, at a fair valuation, sufficient or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all its obligations, due and accruing due.[5]  When companies find themselves in the position of an insolvent person, bankruptcy proceedings may begin.  Bankruptcy is a legal process carried out through a likened Trustee in bankruptcy and is designed to relieve debtors of their debt burden.  Once in bankruptcy proceedings, creditors cannot initiate any collection actions against debtors, without leave of the court.[6]

 

A.                 The Bankruptcy and Insolvency Act (BIA)

The BIA governs formal bankruptcy proceedings in Canada.  The process involves the appointment of a trustee who is assigned the assets of the insolvent person.  The debtor’s property vests to the Trustee who steps into the shoes of the debtor.  The Trustee may sell, exchange or use the assets to pay creditors. 

There are three ways in which the BIA can be invoked, by a debtor or its creditors, to initiate bankruptcy proceedings:

(i)     Application for Bankruptcy by Third Party;

(ii)   Voluntary Assignment; or

(iii) Proposal

Part II of the BIA allows debtors to invoke the Act by way of voluntary assignment, and creditors to do so by way of application for bankruptcy by third party.  Proposals are made under Part III of the BIA.

 

Application for Bankruptcy by Third Party Process

An Application for Bankruptcy under s43 of the Act can be filed by creditors of a debtor.  Section 43 of the BIA outlines the fundamental components required in an Application for Bankruptcy.  The following is a checklist that summarizes the most notable requirements of an Application under s.43 of the BIA:

(1)    The Application can only be commenced if it is alleged that the debtor owes creditors at least $1000 and the debtor has committed an act of bankruptcy.

An Application for Bankruptcy may be filed by creditors with the Office of the Superintendent of Bankruptcy (“OSB”) as long as the amount owed by the debtor to the creditor exceeds $1000 and the debtor has committed an “Act of Bankruptcy” within the previous 6 months as per s.45 of the BIA.    In most cases, this method is evoked by unsecured creditors, as the rights of a secured creditor are often not affected by bankruptcies.[7]  If a secured creditor wishes to make an Application for Bankruptcy, the creditor must either surrender the security or estimate the value of the security and show that the debtor owes at least $1000 as an unsecured claim.[8]

Acts of Bankruptcy are defined in s.42 of the BIA.  While there are ten scenarios listed as Acts of Bankruptcy within the legislation, two are most commonly noted in Applications.[9]  The first occurs when the sheriff cannot find any property in the debtor’s name that can be seized and sold to satisfy the debtor’s obligations.[10]  The second is when the creditor demonstrates that the debtor is unable to meet its obligations generally as they become due in the ordinary course of business.[11]

When attempting to establish that a debtor is unable to meet its obligations generally as they become due, a creditor must establish to the court’s satisfaction that there are several creditors whose debts are generally not being paid even though they have tried to collect, their debts are long outstanding or there are executions against the debtor.[12]  Merely establishing that a group of creditors have not been paid is insufficient in establishing this act of bankruptcy.

(2)    If the Application is submitted by a secured creditor, the creditor will be required to forfeit its security for the benefit of the creditors or it will have to indicate an amount owing beyond its claim as a secured creditor, as an unsecured creditor.

(3)    A Sworn Affidavit by the applicant or someone duly authorized on their behalf having personal knowledge of the facts must be submitted.

An affidavit swearing to the application is necessary to ensure the facts of the situation are filed with the Court.  If the debtor appeals at the hearing of the application and calls into question the truth of the facts, the proceedings may be stayed for the period of time required for trial of the contested facts to take place.

(4)    Consolidation of Applications may occur where there are two or more creditors seeking an order against the same creditor to increase the efficiency of the proceedings.

It should also be noted that if there is a single creditor, the creditor must meet a test of “special circumstance” before the debtor is put into bankruptcy.  The test set out in the common law states that the creditor must show that: the debtor has failed to meet repeated demands of the creditor and in the specific circumstances should not be denied the benefits of bankruptcy proceedings by reason only of its unique situation; the creditor is a significant creditor and there are special circumstances such as fraud on the part of the debtor which make it necessary to invoke bankruptcy legislation; or the debtor admits that he is unable to pay his creditors generally.[13]

(5)    Applications are filed in the jurisdiction of the debtor.

(6)    The court will rely on proof of the facts at the hearing of the Application, at which point, if satisfied, an order may be granted.  If however, the proof does not amount to the ascertation that the facts are as submitted, the application may face dismissal.  It should be noted that when applications are consolidated one or more parties may be dismissed without prejudice to the remaining parties.

(7)    Upon granting of an order of bankruptcy, a trustee is appointed by the Court as trustee of the property of the bankrupt having regard, as far as the Court deems just, to the wishes of the creditors

(8)    Once an Application for Bankruptcy has been made, it cannot be withdrawn without leave of the Court.

(9)    The court has the discretion to dismiss an application.

If the Court feels that an application has been made for ulterior purposes or that the proceeding would not result in any meaningful results, the application may be dismissed.[14]

It is vitally important that the applicant ensure that the notable requirements of an application as stipulated by the legislation are met.  For example, it must be proven in the claim that the debt is over $1000 by way of a Proof Of Claim form (Attached as Appendix “A”).  Failure to do so is seen by the courts as a substantial error in the Application.  Minor errors may be corrected by leave of the court however the issuing of a second application in order to fix the initial application can result in both being dismissed as two applications cannot exist together.[15]  The burden for proof lies with the applicant and due to the quasi-criminal nature of bankruptcy proceedings, courts have insisted that the act of bankruptcy and every allegation essential to the making of a bankruptcy order be strictly proved.[16]

At the hearing of an application for a bankruptcy order, the court shall require proof of the facts alleged in the application and of the service of the application and, if satisfied with the proof, may make a bankruptcy order.  With a bankruptcy order, the debtor is adjudged bankrupt.[17]  An order sets out the nature and the dates of the acts of bankruptcy on which the order is made (Attached as Appendix “B”).  A notice is sent to all creditors alerting them that the company has been declared bankrupt (Attached as Appendix “C”). The effect of a Bankruptcy order is the vesting of all the property of the bankrupt in a trustee.[18] 

 

Voluntary Assignment

Another way to invoke the BIA is for an insolvent person to voluntarily assign its property as per s.49 of the BIA to a licensed trustee, via the Official Receiver, for the general benefit of creditors.  Often, a debtor has involvement in the appointing of a particular trustee.[19]  Assignment is available to both individuals and corporations.  A corporation must take the following steps when filing an assignment with the official receiver[20]:

(1)    A meeting of the Directors of the insolvent corporation is  mandatory.  The Directors must come to an agreement to file for assignment.

(2)    Upon resolution by the Directors, an application of Assignment for the General Benefit of Creditors Form (Attached as Appendix “D”) must be completed. 

(3)    A Statement of Affairs must be prepared.  This Statement requires the debtor to carefully and accurately give the names, addresses and amounts of claims of all the creditors of the debtor.  It also requires that all assets of the debtor are listed with descriptions as to their state and any claims, secured, unsecured, preferred, or unsecured.  Initially a short version of this form may be filed (Attached as Appendix “E”), however a Long Affairs Form must also be completed at a later date, which provides greater detail (Attached as Appendix “F”).

(4)    Copies of both the Assignment for the General Benefit of the Creditors form as well as the Statement of Affairs form are filed with a certified copy of the resolution of the board of directors with  the official receiver in the area where the corporation has its head office or where it has the largest amount of assets.

(5)    A Certificate of Appointment of Trustee is issued by the official receiver to certify that a trustee was appointed to the estate of the debtor (Attached as Appendix “G”).

(6)    An Estates Information Summary Form is completed by the trustee setting out the full particulars of the debtor (Attached as Appendix “H”).

Once a Trustee has been assigned and the documents have been filed, the insolvent corporation no longer deals with creditors, this becomes the Trustee’s obligation.   The filing of the forms results in the debtor corporation being declared bankrupt; At this point in time, the debtor must stop making all payments directly to unsecured creditors and all lawsuits brought by creditors against the debtor will be stayed.[21]

 

Proposals                          

The third and final way in which the BIA may be invoked by a debtor is by way of Proposal.  This option is triggered when a Notice of Intention to file a Proposal is filed with the Official Receiver’s office.  A proposal can be described as a contract between the debtor and creditors whereby the debtor demonstrates a plan for composition, extension of time or rearrangement of its debts to creditors.[22]  One of the most attractive features of the proposal process is that upon filing, the rights and remedies of all creditors, including secured creditors, are stayed until the trustee has been discharged or the insolvent person becomes bankrupt.[23]  No creditor is able to commence or continue any action, execution or other proceeding for the recovery of a claim provable in bankruptcy.  This gives debtors who may be overwhelmed by the demands of creditors seeking to collect on outstanding debt, time to  formulate a plan for a Proposal.

There are two types of proposals an insolvent person can file: (1) Division I Commercial Proposals; or (2) Division II Consumer Proposal.  Commercial Proposals are accessible to both corporate and natural persons whereas Consumer Proposals are limited to only natural persons.  For the purposes of this guide, examining options available to insolvent companies, we will examine the process and procedure under Division I Commercial Proposals.

The Role of Trustees in Proposals

The Role of a Trustee in the Proposal process is significant as an insolvent person must engage a licensed trustee to assist in preparing the Proposal.  The Trustee is to make, or cause to be made, such an appraisal and investigation of the affairs and property of the debtor as to enable the trustee to estimate with reasonable accuracy the financial situation of the debtor and the cause of the debtor’s financial difficulties or insolvency and report the result thereof to the meeting of the creditors.[24]  Notably, the trustee acts on behalf of both the debtor and creditors.  On behalf of the debtor, the Trustee prepares and files the statements of affairs, the proposal, the cash-flow statements, the Trustee’s report on reasonableness of the cash-flow statement all while working with the debtor in reviewing the claims, arranging financing and sale of assets, and generally performing the terms and conditions of the proposal.  On behalf of the creditors the Trustee must ensure that the information given is current, accurate and correct.  The creditors rely on the Trustee’s opinions on the financial and business affairs of the business in deciding whether to approve the Proposal.[25]

Division I Commercial Proposals

Proposals made under this division fall beneath the “General Scheme” outlined within s.66 of the BIA.  Commercial Proposals can be made in one of five ways[26]:

(1)    by an insolvent person;

(2)    by a receiver of an insolvent person;

(3)    by a liquidator of an insolvent person’s property;

(4)    by a bankrupt; and

(5)    by a trustee of the estate of the bankrupt.

A Proposal must be made to the creditors generally, either as a mass or separated into classes, and may also be made to secured creditors in respect of any class or classes of a secured claim as long as all secured creditors within a class are made the same Proposal[27].  A benefit of separating the secured creditors into classes is that this allows the debtor to make Proposals to some creditors while carrying out or performing on contracts with other creditors.[28]  Secured creditors are grouped together into classes if their interests and rights are sufficiently similar to give them a commonality of interests taking into account such considerations as the nature of the debt, the rank of the security of the claims, and the treatment of the claims under the Proposal.[29]  This process is facilitated by a licensed trustee.

Types of Proposals

One of the reasons why a Trustee is involved in the Proposal process is because apart from statutory requirements, there is no prescribed form for Proposals.  The following examples, according to Frank Bennett, are representative of the types of Proposals that may be made[30]:

(1)    extension of time – the debtor may propose that the debts be paid over a period of time on a 100% basis;

(2)    composition of debts – the debtor may propose to pay a lump sum or percentage on the dollar of the claims to the trustee for distribution to the creditors;

(3)    a combination of an extension of time and composition; a basket proposal where the debtor conveys all or some of its assets to a trustee for realization and distribution; a liquidation proposal whereby the debtor’s assets are realized in an orderly manner rather than in a quick bankruptcy sale; and

(4)    an offer of shares in exchange for debt, or the creation of a distress preferred shares where dividends are given favourable tax treatment.

Notice of Intention

When a debtor finds they may not have sufficient time to formulate a proposal, a debtor under a Commercial Proposal may file a Notice of Intention form (Attached as Appendix “I”) stating:

(1)    the insolvent person’s intention to make a proposal;

(2)    the name and address of the licensed trustee who has consented, in writing, to act as the trustee under the proposal; and

(3)    the names and individual amounts as per the debtor’s records of the creditors whose individual claims amount to $250 or more.[31] 

A copy of the Notice of Intention is mailed to creditors within 5 days of filing. The filing of the Notice of Intention gives the debtor 30 days to formulate a proposal.[32] Within 10 days of completing the Notice of Intention form, the insolvent person must further file: 

(1)    a statement indicating the projected cash-flow of the insolvent person prepared and signed by the insolvent person and reviewed and signed for its reasonableness by the trustee under the Notice of Intention;

(2)    a report on the reasonableness of the cash-flow statement prepared and signed by the trustee (Attached as Appendix “J”); and

(3)    a report containing the prescribed representations made by the insolvent person regarding the cash flow statement prepared and signed by the insolvent person[33] (Attached as Appendix “K”).

The extra 10 days allows debtors, who often find themselves in a position of having to sift through poorly organized records, additional time to complete the cash-flow statements and ensure their accuracy. If the debtor fails to provide the cash-flow statements and reports 10 days after filing the Notice of Intention, or the debtor fails to file a Proposal in writing after 30 days, then there is a deemed assignment in bankruptcy. Extensions can be granted by the court to a maximum of 5 months after the initial 30 day period.[34]  If the debtor can establish it has acted in good faith and due diligence, it is likely to make a viable Proposal in the extended time and no creditor would be materially prejudiced in the interim.[35]

Filing a Proposal

Subject to insolvent persons who decide to file a Notice of Intention as described above, proceedings in a Proposal are commenced by the lodging with a Trustee a copy of the Proposal in writing setting out the terms of the proposal and the particulars of any securities or sureties proposed, signed by the insolvent person.[36]  If the insolvent person in respect of whom the Proposal is made is not bankrupt, a statement showing the financial position of the person at the date of the proposal, verified by affidavit as being correct to the belief and knowledge of the person making the Proposal, shall be provided. If the insolvent person in respect of whom the Proposal is made is bankrupt, the Statement of Affairs shall be provided and approval of the inspectors must be obtained before any further action is taken.

At this stage, according to Bennett, the Trustee is required to file four documents with the Official Receiver[37]:

(1)    the proposal; at the time of filing the Proposal, the debtor must also set out the particulars of any securities or sureties posed;

(2)    a statement indicating the projected cash-flow of the insolvent person prepared and signed by the insolvent person and reviewed and signed for its reasonableness by the Trustee under the Notice of Intention;

(4)    a report on the reasonableness of the cash-flow statement prepared and signed by the Trustee (Attached as Appendix “J”); and

(5)    a report contain the prescribed representations made by the insolvent person regarding the cash flow statement prepared and signed by the insolvent person[38] (Attached as Appendix “K”).

Approval of a Proposal at Creditors Meeting

Creditors are in the position of being offered something less than what they are owed by the debtor, and as such they carry certain rights.  These rights include being able to file a claim with the trustee, attending hearings of the debtor, inspecting the estate, requesting documents to discern the financial position of the business and also voting on the proposal itself.   A meeting of the creditors takes place 21 days after the filing of the proposal, in which the official receiver acts as chairman of the meeting.[39]  It is the Trustees responsibility to send to every known creditor and the Official Receiver, at least 10 days before the meeting:

(1)    a notice of the date, time and place of the meeting;

(2)    a condensed statement of assets and liabilities;

(3)    a list of the creditors with claims amounting to $250 or more and the amounts of their claims as known or shown by the debtor’s books;

(4)    a copy of the proposal;

(5)    the prescribed forms, in blank, of

        a.      proof of claim form (Attached as Appendix “A”);

        b.      proof of secured claim if applicable; and

        c.      proxy (Attached as Appendix “L”)

if not already sent; and

(6)    a voting letter (Attached as Appendix “M”).

At the meeting, all creditors who have proven their claims may vote although secured creditors may vote in more than one class and unsecured creditors in only one unless otherwise provided in the proposal.    In each class, unsecured and secured creditors must have a majority and at least two-thirds in value for the proposal to succeed.  If the proposal is accepted by the creditors and approved by the court, it binds all unsecured claims and those secured claims that were affected by the terms of the proposal.[40]  When a proposal is rejected at the meeting the insolvent person is deemed to have been assigned into bankruptcy.

 

Approval by the Courts

A proposal will not be approved by the Court unless it addresses and provides for the following, among other factors, including  payment of all fees and expenses of the trustee;  payment of all preferred claims; payment in full within 6 months of Court approval of all amounts of a kind that could be subject to a demand under subsection 224(1.2) of the Income Tax Act including Canada pension, employment insurance or similar provincial legislation; that the debtor is not in default on any remittance of any tax referred to above after the filing of a Notice of Intention or the proposal; and reasonable security for the payment of not less than 50 cents on the dollar of all unsecured claims or such other percentage as the court may direct if there are facts proved under s.173[41] of the BIA.[42]

 

B.                The Companies Creditors Arrangement Act (CCAA)

The CCAA is devoted entirely to the restructuring of debtor corporations and offers a rehabilitation regime for insolvent companies.  As discussed earlier, to invoke this legislation, a company must have debt in excess of $5 million.  This act was geared towards allowing companies to compromise and make arrangements with creditors without going into bankruptcy or liquidation.[43]  The definition of an eligible  “debtor company” is stated in  s. 2 of the CCAA as a company that[44]:

(1)    Is bankrupt or insolvent;

(2)    Has committed an act of bankruptcy within the meaning of the BIA or is deemed insolvent within the meaning of the Winding-up and Restructuring Act (Canada) (“WURA”), whether or not proceedings have been taken under either of those Acts;

(3)    Has made an authorized assignment or against which a receiving order has been made under the BIA; or

(4)    Is in the course of being wound up under the WURA because the company is insolvent.

The intent of the legislation is to allow the company to maintain operations, thereby preserving its goodwill, and maintain a higher value than if liquidated.[45]  Similar to Proposals made under the BIA, when a proceeding is commenced under the CCAA by way of Initial Order, protection against creditors from enforcing their remedies is granted while the debtor company proposes a plan of arrangement.   If an initial order is granted, there is a further stay of legal proceedings against all creditors while the plan is operative or until plan is defeated by the creditors or the court.[46]  An invaluable benefit of CCAA proceedings is that unlike the BIA, the CCAA has no statutory limit on the period of time in which a plan may be filed.  Proceedings under the CCAA are geared towards allowing a company sufficient time in which to reorganize itself and proceedings under it have been known to last as long as 2 years.[47]  Creditors and the supervising court monitor the length of time given to a company in such cases.[48]  One example of a particularly lengthy restructuring under the CCAA was the Stelco Inc. restructuring which lasted approximately 26 months.[49]   This long-term outlook is an incentive for proceedings currently under the BIA Proposal process to make use of s. 11.6 of the CCAA which allows companies to convert reorganization processes after the have commenced, as long as a Proposal has not yet been filed, to the CCAA restructuring process.[50]  No similar provisions allows CCAA proceedings to be switched to the BIA however.

Another similarity between the BIA and CCAA is the idea of a court appointed third party becoming involved in the affairs of a debtor company.  It should be noted that a Trustee under the BIA has broad powers in which the Trustee essentially “steps into the shoes” of the debtor company.  In a CCAA proceeding, a Monitor is appointed when an order is made to monitor the business and financial affairs of the company while the order remains in effect.[51]

Finally a consideration to be made before deciding whether to commence proceedings under the BIA or the CCAA is the cost associated with each.  The CCAA is generally significantly more expensive than proceedings under the CCAA however one must take into account that larger more involved companies tend to choose the CCAA restructuring process.[52]  The BIA is known for its structured process that companies must conform and follow whereas the CCAA allows for specific tailoring in each instance.[53]

These factors must be considered by any debtor company deciding between BIA and CCAA proceedings.

 

C.                Receiverships

Receivership can be defined as the process of appointing a person to take possession of property belonging to a third party.  It is evident what the effect of a “receivership” would be in the face of bankruptcy and insolvency, namely to have a third party (i.e. a Trustee) appointed to take possession and control of an insolvent person’s assets.  An appointed receiver has the power to collect the income and profits of the debtor while also collecting the debts and selling the inventory and other assets of the debtor.  A manager would be appointed to continue the business if it was necessary.  In practise, a person is often appointed to take possession and dispose of the assets as well as carry on the business and is so called a receiver and manager or a receiver/manager.[54]   A receiver must act with the upmost integrity when exercising its powers and duties. 

If a secured creditor is in a position to enforce its rights against all or substantially all of an insolvent debtor’s property, they may apply to the Superior Court of Justice for a receivership order.

Appointing a Receiver

There are two methods of appointing a receiver.  The first occurs when a secured creditor holds security over all or substantially all of the debtors assets, and the security holder has the right to appoint a receiver or receiver-manager over the assets pursuant to the powers contained in the security instrument.  This style of appointment is referred to as a “private receiver”.  

To privately appoint a receiver, the secured creditor must send a Notice of Intention to Enforce a Security (Attached as Appendix “N”) to the debtor. 

Subsequently the appointed receiver must then inform the creditors of the appointment.  Such a remedy is built into contractual agreements between the debtor and secured creditor.  The contract allows a creditor to force a power of sale on the debtor’s assets until its claim is satisfied.  Any surplus at the end of this process is paid to the next secured creditor in line and, if funds remain, to the debtor corporation. [55]

The duties of a private receiver are primarily owed to the security holder who holds the instrument under which the receiver was appointed (ie., a General Security Agreement).  In this scenario, the receiver has no fiduciary duty to the debtor or its creditors apart from the surplus of assets or proceeds realized in the course of enforcing the security holder’s interest.  While the receiver must act in good faith, there is no obligation to the debtor to take all measure that a prudent person might take in selling his or her own property.

The second method of appointing a receiver is by order of the court.  An Application can be brought for the appointment of a receiver.  Under section 101 of the Courts of Justice Act, a court may appoint a receiver, or receiver-manager, where it appeals to the judge that it is “just and convenient” to do so.  Such an appointment is referred to as “court-appointed receiver”.[56] 

The duty of a court appointed receiver is much different from that of a private receiver; a court appointed receiver has a duty to the court as an officer to discharge the powers honestly and with bona fides.  The receiver’s duty extends to all interests parties involving the debtor’s assets, property and undertaking.  There is also a general duty to preserve the goodwill and property of the debtor unless otherwise provided in the order.

If Part XI of the BIA applies, the receiver must issue reports to the insolvent person and any creditor of the insolvent person who requests a copy up until 6 months after the end of the receivership.

 

D.                Conclusion

A company facing bankruptcy must be aware of the various avenues available to it and its creditors.  By establishing a plan, a company can best utilize the available remedies legislated in the BIA and CCAA. 

___________________________________________________________________________________________________________

[1] I gratefully acknowledge the assistance of Rajveer Grewal in the preparation of this paper.

[2] Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3.

[3] Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36.

[4] David Mann, CCAA vs. BIA – A Comparison of Reorganization Process, online: Frasier Milner Casgrain < http://www.fmc-law.com/Publications/644882_Insolvency.aspx> at 2.

[5] Supra, note 1.

[6] Office of the Superintendent of Bankruptcy, “Debtors: Declaring Bankruptcy”, online: Industry Canada

[7] Office of the Superintendent of Bankruptcy, “About Insolvency: Basic Concepts”, online: Industry Canada

[8] Frank Bennett, Bennett on Bankruptcy, 10^th ed. (Toronto: CCH Canadian Limited, 2008) at 121. [“Bennett on Bankruptcy”]

[9] Bennett on Bankruptcy, supra note 7 at 117.

[10] Bankruptcy and Insolvency Act, supra note 1,  s.42(e).

[11]Bankruptcy and Insolvency Act, supra note 1, s. 42(j).

[12] Bennett on Bankruptcy, supra note 7 at 123.

[13] Bennett on Bankruptcy, supra note 7 at 123.

[14] Bennett on Bankruptcy, supra note 7 at 128.

[15] Bennett on Bankruptcy, supra note 7 at 126.

[16] L.W. Houlden, G.B. Morawitz and Janis Sarra, Bankruptcy and Insolvency Law of Canada, 4^th ed. (Toronto: Thomson Reuters Canada Ltd., 2009) at 42.

[17] Ibid at 139.

[18]Bankruptcy and Insolvency Act, supra note 1, s.71.

[19] Bennett on Bankruptcy, supra note 7 at 148.

[20] Ibid.

[21] Office of the Superintendent of Bankruptcy, “About Insolvency: Basic Concepts”, online: Industry Canada and s.69(1)(a).

[22] Bennett on Bankruptcy, supra note 7 at 151.

[23] Bankruptcy and Insolvency Act, supra note 1, s.69(1).

[24] Bankruptcy and Insolvency Act, supra note 1, s. 50.(5).

[25] Bennett on Bankruptcy, supra note 7 at 162.

[26] Bankruptcy and Insolvency Act, supra note 1, ss. 50 and 66.

[27] Bankruptcy and Insolvency Act, supra note 1,  s. 50(1.2) and s. 50(1.3).

[28] Bennett on Bankruptcy, supra note 7 at 153.

[29] Bankruptcy and Insolvency Act, supra note 1, s.50(1.4).

[30] Bennett on Bankruptcy, supra note 7 at 158.

[31] Bankruptcy and Insolvency Act, supra note 1, s. 50.4(1).

[32] Bennett on Bankruptcy, supra note 7 at  154.

[33] Bankruptcy and Insolvency Act, supra note 1, s. 50.4(2).

[34] Bennett on Bankruptcy, supra note 7 at  154.

[35] Bankruptcy and Insolvency Act, supra note 1, s. 50.4(9).

[36] Bankruptcy and Insolvency Act, supra note 1, s. 50.(2).

[37] Bennett on Bankruptcy, supra note 7 at  153.

[38] Bankruptcy and Insolvency Act, supra note 1, s. 50.4(2).

[39] Bankruptcy and Insolvency Act, supra note 1, s. 50.1(1).

[40] Bennett on Bankruptcy, supra note 7 at  160.

[41] Section 173 of the BIA lists facts for which discharge may be refused, suspended or granted conditionally.

[42] Ibid., at 60-161

[43] Bennett, supra note 7 at  1147.

[44] Mann. supra, note 2.

[45] Ibid., at 1148.

[46] Ibid.

[47] Mann, Supra, note 8.

[48] Ibid.

[49] Attached as Appendix O is the Initial Order of Justice Farley in the Stelco Inc. restructuring proceedings under the CCAA.

[50] Mann, supra, note 8 at 10.

[51] Section 11.7 CCAA

[52] Mann, supra, note 8 at 12.

[53] Ibid.

[54] Frank Bennett, Bennett on Receivership, 2^nd ed., (Toronto: Carswell, 1999) at 1. [Bennett on Receiverships]

[55] Bennett on Receiverships, supra note 44 at 3.

[56] Ibid.