Proposal to the creditors
Fling a proposal under the Bankruptcy and Insolvency Act may be the better option for a corporation facing severe financial problems but which could be profitable if it could reach an agreement with its creditors. The most common type of a proposal calls for payments of a given percentage of the corporation‘s debts in installments over time. Most often a corporate proposal is preceded by the filing of a “Notice of intention to file a proposal”. This procedure allows the corporation 30 days or more with Court approval to submit a proposal to its creditors.
During that period all procedures against the corporation are stayed. This freezing period allows management of a corporation overburden with debts to ease the crisis management that was eating up all their time to focus on the financial reorganization of their business. Our expertise in helping corporations draft viable proposals led to the approval and the completion of the vast majority of them and allowed enterprises to gain back profitability, keep contributing to the economy in their community and save jobs. This is a great achievement for them and for us.
Corporations indebted for an amount exceeding 5 million dollars may file an arrangement under the Companies’ Creditors Arrangement Act (CCAA). This type of procedure is more flexible than the BIA and a favourite in the reorganization of large corporations with complex issues.