Many different types of insolvency proceedings exist, including receivership, protection under the Companies Creditors Arrangement Act (CCAA), and bankruptcy. But, what are they and how are they different?
According to Jeffrey Carhart, partner at the law firm Miller Thomson, perhaps the simplest way to understand the differences is to think about who is in control of the insolvent company.
Generally speaking, the Companies Creditors Arrangement Act (CCAA) is the Canadian equivalent of Chapter 11 in the United States. It is a system where the debtor itself can remain in control of its affairs under the supervision of the court and with the benefit of a stay of proceedings, said Carhart.
However, a unique feature of the Canadian syste…
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