Although the Companies’ Creditors Arrangement Act (“CCAA”) provides scant guidance, it is a well established procedure in a CCAA proceeding for the Court to order a claims process and to delegate powers to review creditors claims to a CCAA Monitor. Recognizing the gaps in the legislation, the Nova Scotia Supreme Court recently reviewed and clarified the basis of a Monitor’s authority to conduct a claims bar process in the CCAA restructuring of ScoZinc Ltd.

On July 27, 2009, Arclin Canada Ltd. and related Canadian entities filed under the CCAA in Ontario and related U.S. entities filed under Chapter 11 of the U.S. Bankruptcy Code in Delaware. Arclin announced that it had reached agreement with certain of its key senior lenders to reduce its debt from US $234 million to US $60 million and that it would receive a US $25 million debtor in possession (DIP) financing facility.

As we warned in our earlier articles, “Wage Earner Protection Program Act Comes Into Force - Secured Creditors Be Wary” and “Extension of the WEPPA – Further Protection for Employees”, the Wage Earner Protection Program Act (the “WEPPA”) took eff

The Nortel restructuring continues to be what many observers consider the most interesting Canadian restructuring in recent memory. Most recently, it was an international battle for certain of the once Canadian icon's valued assets.

Over the last few years, debtor-in-possession (DIP) loans have become a fixture in Canadian insolvency proceedings. Initially, in Companies’ Creditors Arrangement Act (CCAA) proceedings, courts used inherent jurisdiction to authorize DIP facilities because the statute did not expressly permit them. (Pending legislative changes will put explicit DIP provisions in the CCAA and the Bankruptcy and Insolvency Act (BIA).)

In the course of fewer than 60 days this summer, the North American automotive industry was fundamentally reorganized and restructured as both General Motors and Chrysler reorganized under Chapter 11 of the United States Bankruptcy Code. Ford was the only one of the “Big 3” not involved in a Court-driven restructuring. Both General Motors and Chrysler, of course, had and indeed continue to have substantial operations in Canada and the Canadian operations were a critical part of the overall restructuring of both companies.

On July 21, 2009, Quebecor World Inc. and its affiliated debtors announced that they emerged from creditor protection under the CCAA and Chapter 11 of the U.S. Bankruptcy Code. Quebecor announced that it had completed its Canadian and U.S. reorganization plans, closed a US $800 million exit financing facility and had drawn down approximately US $540 million with which it repaid its debtor in possession (DIP) facility.

On June 29, 2009, Nexient Learning Inc. filed under the CCAA in Ontario. Nexient announced that it made arrangements with The Vengrowth Traditional Industries Fund Inc., one of its lenders, to provide debtor in possession (DIP) financing to support its ongoing operations. Nexient also announced that on July 8, 2009 it received approval from the Ontario Superior Court of Justice to conduct a sale process for the sale of its assets and that it had entered into a stalking horse asset purchase agreement. The sales process is expected to be completed by August 15, 2009.

In Canada, there is more than one insolvency regime available to an insolvent company that wishes to restructure its debts and operations. However, the most commonly used regime for large companies ? and sometimes for smaller companies, because it is the most flexible ? is the Companies’ Creditors Arrangement Act (Canada) (CCAA). The most commonly used regime for smaller companies or less complicated restructurings is proposal proceedings under theBankruptcy and Insolvency Act (Canada) (BIA).

CCAA

The decision of the British Columbia Superior Court in Re Ted Leroy Trucking Ltd. was a result of an application for directions with respect to what amounts are properly covered by the Wage Earner Protection Program Act, S.C. 2005, c. 47 (the “WEPPA”), and the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”).