The Companies’ Creditors Arrangement Act (CCAA)
Restructuring Solutions for Larger Corporations
Restructuring Solutions for Larger Corporations
When a business with significant debt faces financial challenges, a complete bankruptcy isn’t always the only solution. The Companies’ Creditors Arrangement Act (CCAA) allows financially troubled companies to restructure their operations, debts, and contracts while continuing to operate.
At Crowe MacKay & Company, our team of Licensed Insolvency Trustees (LITs) help corporations through the CCAA process — helping management maintain control of the business while working toward a viable recovery plan that satisfies creditors and preserves value.
What Is the Companies’ Creditors Arrangement Act (CCAA)?
The Companies’ Creditors Arrangement Act is a federal law in Canada that helps large, financially distressed corporations reorganize their affairs and avoid bankruptcy.
Often compared to Chapter 11 proceedings in the United States, the CCAA enables a company to:
- Continue operating under the supervision of the court
- Obtain a stay of proceedings that halts most creditor actions.
- Develop a Plan of Arrangement to compromise and settle debts.
- Restructure operations, contracts, and finances to restore long-term viability
Throughout the process, the court appoints a LIT to act as a Monitor, providing oversight and regular reporting to the court and creditors.
Benefits of a CCAA Plan of Arrangement
A CCAA restructuring can provide significant advantages for companies in distress, including:
- Protection from creditor actions through an automatic stay of proceedings
- Continued control of the business by existing management
- Time to restructure operations, contracts, or debt without liquidation
- Flexibility to negotiate creative solutions tailored to the company’s needs
- Preservation of brand, jobs, and market confidence while stabilizing finances
When Should a Company Choose a CCAA Restructuring?
A CCAA Plan of Arrangement may be appropriate when:
- The business owes more than $5 million and faces complex creditor relationships
- Operations are viable, but debt levels are unsustainable.
- Multiple secured creditors or large institutional lenders are involved.
- The company needs judicial flexibility to manage contracts, leases, or cross-border assets
- A more comprehensive and court-driven process is required compared to the BIA
How Does the CCAA Process Work?
Initial Filing and Court Application
A company applies to the court for protection under the CCAA. Once granted, a stay of proceedings immediately prevents creditors from initiating or continuing collection, legal, or enforcement actions.
CCAA vs. BIA
|
Aspect |
CCAA (Companies’ Creditors Arrangement Act) |
BIA (Bankruptcy and Insolvency Act) |
|
Eligibility |
Companies owing over $5 million |
No minimum debt threshold |
|
Control |
Debtor remains in control under court supervision |
LIT oversees the process directly |
|
Court Involvement |
Continuous and flexible oversight |
Structured and prescriptive |
|
Legal Role |
Lawyers play a significant role |
LIT primarily manages the process |
|
Flexibility |
Highly adaptable to complex cases |
More standardized process |
|
Typical Use |
Large corporations with complex debt structures |
Small-to-medium-sized businesses |
The CCAA is typically preferred for large corporations that need significant operational restructuring, while the BIA’s Division I Proposal is generally more cost-effective for smaller companies seeking similar relief.
What Happens If the CCAA Plan Is Not Approved?
If the company fails to obtain creditor or court approval of the plan, the stay of proceedings may be lifted, allowing creditors to resume collection actions.
In some cases, the company may transition into bankruptcy or another insolvency proceeding under the BIA.
How Crowe MacKay & Company Can Help
Our team has decades of experience assisting companies across British Columbia through both CCAA and BIA proceedings.
We provide:
- Strategic financial and restructuring analysis
- Assistance with court filings and creditor communication
- Acting as Monitor during CCAA proceedings
- Support for management teams navigating legal and operational changes
Want to Find Out If You’re Eligible?
If you have questions on the CCAA in Vancouver or Surrey, contact our Licensed Insolvency Trustees by calling (604) 689 3928, emailing [email protected], or filling in the form below.
Book a Free Consultation
Our licensed experts are here to answer all your questions about bankruptcy and consumer proposals. Whether you're an individual or a business, we’ll help you understand your options and guide you through every step of the process with care and confidence.