In a development with potentially significant implications for
the construction and insolvency sectors, the Ontario Superior Court
granted an initial order under the Companies’ Creditors
Arrangement Act (“CCAA“) that
included a rarely seen measure: a stay on calls against performance
bonds. The decision in Re Earth Boring Co. Limited raises
important questions about the limits of judicial discretion under
section 11 of the CCAA and the role of section 11.04, which
addresses the role of third-party guarantors in a debtor’s
restructuring. This bulletin analyzes the scope and rationale of
the Court’s order, its alignment with existing legal and
commercial principles, and the practical consequences for owners,
contractors, and…
Insolvency Guardian
Insolvency Services & Bankruptcy Advice
