1E9Ct5D

There are strict guidelines andtimeframes under the BIA, includinga maximum of six months withinwhich to file a definitive proposal.The CCAA is less detailed and hasbeen given a liberal interpretation bythe judiciary. As such, the CCAA ismore flexible.If a proposal made under the BIA isrejected by the unsecured creditorsor the court refuses to approve it, thedebtor is automatically declared tobe bankrupt.If a plan of arrangement is rejectedunder the CCAA, either by creditorsor the court, the debtor is notautomatically declared a bankrupt.Under the BIA, a stay of proceedingsis obtained when the debtor files anotice of intention with theSuperintendent of Bankruptcy.Conversely, under the CCAA, a staymust be obtained by court order.The CCAA applies only tocorporations or corporate groupsthat meet the $5 million debtthreshold dictated by the Act.As indicated above, under the BIA aproposal must be made tounsecured creditors, whereas underthe CCAA a plan of arrangementcan be made to secured creditorsalone, leaving unsecured creditorsunaffected.A proposal under the BIA isgenerally less expensive than a planof arrangement under the CCAA, asthe BIA is more detailed andstructured, with the result that fewercourt applications are normallyrequired than under the CCAA.RECEIVERSHIPIn addition to the provisions noted above,the BIA also provides for the enforcement ofsecurity, a scheme of distribution among adebtor’s creditors and the appointment ofreceivers. When a secured creditor decidesto enforce its security on all or substantiallyall of the insolvent debtor’s assets, thesecured creditor must give the debtor priornotice unless a court orders otherwise.Following the provision of notice, thesecured creditor must wait 10 days (unlessthe debtor consents or a court ordersotherwise) to take further steps to enforceits security.One of the common methods ofenforcement of a creditor’s security is theappointment of a receiver. A receiver isnormally appointed by one of two methods:by a secured creditor according to a securityagreement (private appointment), or bycourt order (court appointment).Once appointed, the receiver must givenotice of its appointment to all the debtor’screditors. The receiver must issue reportson a regular basis outlining the status of thereceivership, prepare a final report andstatement of receivership accounts whenthe appointment is terminated, and makethose reports available to creditors uponrequest.Private AppointmentWhen a receiver is appointed under asecurity agreement, the security agreementmust also set out the powers the receiver isto have. These powers are typically broadand may include the power for the receiverto carry on the debtor’s business and sellCommercial Reorganization and Insolvency Law 126