In a post last year entitled "North Of The Border: Reorganization Under Canada’s Companies’ Creditors Arrangement Act," I discussed the various types of bankruptcy and insolvency proceedings available under Canadian law. Included in the discussion was the Companies’ Creditors Arrangement Act, known as the CCAA, used by many Canadian companies to reorganize. At that time, although significant amendments had been enacted to the CCAA and other Canadian bankruptcy laws, those amendments had not "come into force," the final act necessary under the Canadian system before the changes in the law would become effective.
That changed on September 18, 2009, when these revisions to the CCAA and to the Bankruptcy and Insolvency Act, or BIA, finally came into force (joining a few other changes that came into force in July 2008). Canadian bankruptcy law has now been modified in a number of important ways, applicable to cases filed going forward.
- Although the revisions are too numerous to describe here, fortunately the Canadian government has prepared a very helpful summary of the biggest changes, available at the link in this sentence.
- As amended, the CCAA now resembles the Chapter 11 bankruptcy process in more ways than before, including post-filing financing, sales of assets, and preferences, yet with a distinctly Canadian approach.
- A provision protecting the rights of licensees of intellectual property has also been added, similar to Section 365(n) of the U.S. Bankruptcy Code, an important benefit to those licensing IP from Canadian companies.
- In addition, Canada has now adopted the Model Law on Cross-Border Insolvency, as the United States did with the enactment of Chapter 15 of the U.S. Bankruptcy Code, governing the recognition of foreign insolvency proceedings.
For more on the new law, and Canadian bankruptcy issues generally, be sure to check out the website of the Office of the Superintendent of Bankruptcy Canada.