An Alternative to Bankruptcy
An Alternative to BankruptcyThe Companies’ Creditors Arrangement Act (CCAA): is a federal law allowing corporations in financial difficulty (owe their creditors more than $5 million) to restructure their finances.
Process:
1. Corporations ask the Court for protection while they prepare an offer to creditors for some form of payment (Plan of Compromise or a Plan of Arrangement)
2. These proceedings are carried out under the supervision of the Court. The benefit of this option is that debtor companies are able to continue operating and receive protection from creditors while the Plan of Arrangement is being prepared
3. Creditors then have the opportunity to vote on whether or not to accept the offer
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