May 8, 2015 | Article
When management of an insolvent company decides to restructure, the Canada Business Corporations Act is typically not the first statute that comes to mind. Canada has a comprehensive insolvency regime: The Bankruptcy and Insolvency Act, Companies’ Creditors Arrangement Act, and the Winding-up and Restructuring Act. However, within the past decade a number of insolvent or near insolvent Canadian corporations have restructured using the CBCA section 192 plan of arrangement. This recent trend raises some interesting points regarding the effectiveness of CBCA restructurings since the CBCA is a corporate statute and not an insolvency statute.
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