Audit, Compliance and Risk Blog

If you’re a corporate director or officer, you might find your company and/or yourself in need of relief from unmanageable debts. One way to seek relief is through the Companies’ Creditors Insolvency Act (CCAA). CCAA permits a corporation to propose a formal compromise to its creditors, including the compromise of certain claims against the company’s directors. CCAA also allows a corporation to apply to the court in the province with its head office, seeking protection from creditors to allow a compromise to be negotiated. The court has very broad powers to “make any order that it considers appropriate in the circumstances”; in May 2020 the Supreme Court of Canada has just reaffirmed the breadth of that discretion (9354-9186 Québec inc. v. Callidus Capital Corp).¹

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If you’re a corporate director or officer, you might find your company and/or yourself in need of relief from unmanageable debts. The federal Bankruptcy and Insolvency Act (BIA) governs bankruptcy in Canada for individuals and business entities. If your personal debts include items created because of your activities with the corporation, you may find that some opportunities for relief are expanded but others are eliminated. The Alberta Court of Queen’s Bench recently issued a decision refusing to discharge a former director’s responsibility for civil penalties for misdeeds under the provincial Securities Act (Alberta Securities Commission v Hennig).

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