1E9Ct5D

secured creditors outside of bankruptcy, butwhich are treated as ordinary unsecuredclaims following bankruptcy (e.g., liens forfederal goods and services tax).Once the super-priority claims and securedcreditor claims are satisfied, the BIA setsout the priority scheme for distribution tounsecured creditors as follows:1. The costs of administration of thebankruptcy;2. A Superintendent of Bankruptcy’slevy on all payments made by thetrustee to creditors;3. Preferred claims, secured creditors’claims in the amount equal to thedifference between what theyreceived and what they would havereceived but for the operation of thewage and pension super-priorities,and landlords’ claims up to themaximum amounts prescribed bystatute; and4. Unsecured claims on a pro ratabasis.Avoidance TransactionsPursuant to the BIA and various provincialstatutes, the trustee may set asidefraudulent preferences, fraudulentconveyances and transfers under valuemade by the bankrupt. Keep in mind thatlimitation periods apply in each case.Furthermore, different rules and onuses ofproof apply depending upon whether atransaction/payment was at arm’s length.Interim ReceiverUnder the BIA, an interim receiver may beappointed to preserve and protect an estatepending the outcome of insolvencyproceedings. An interim receiver may beappointed:On or after the filing of an applicationfor a bankruptcy order;On the filing of a notice of intentionto file or the filing of a proposal; orWhen an enforcement notice hasbeen or is about to be sent by asecured creditor indicating itsintention to enforce its security.The appointment of an interim receiver isnormally of short duration. In the orderappointing the interim receiver, the court willspecifically set out the powers of the interimreceiver. Generally speaking, the interimreceiver will be instructed to takepossession of the assets and control thereceipts and disbursements of the debtor,but not to otherwise interfere with the dayto-daybusiness of the debtor.Prior to the 2009 amendments to the BIA,interim receivers were often appointed witha mandate similar to that of a receiver.However, the 2009 amendments to the BIAensure that the interim receiver only carriesout an “interim” role.LIQUIDATING UNDER THE CCAAOnce CCAA proceedings have begun, courtapproval is required before a sale of thedebtor’s assets can be effected. Under theCCAA, a court may authorize a sale of adebtor’s assets notwithstanding theabsence of a plan of compromise orarrangement. Where the sale ofsubstantially all of the debtor’s assets iscontemplated (even when no plan isenvisioned), the court will consider theCommercial Reorganization and Insolvency Law 129