When a corporation files for bankruptcy, there can be different classes of creditors making claims against the assets of the bankrupt company. Who has priority on these assets?
Even if it is viable in the long-term, a company may experience short term financial problems. For example, a temporary situation such as a reduction in clientele, the loss of a contract, or a non-profitable market segment can impact the availability of funds to repay suppliers, the government, or the bank.
What rights and recourses do creditors have in a bankruptcy?
The Bankruptcy and Insolvency Act (BIA) allows an honest but unlucky debtor to find a way back to financial health. Through this process, debtors can be freed of their financial burden as long as they respect their obligations under the Act.
Resiliation of commercial leases with a notice of intention or settlement proposal
The Bankruptcy and Insolvency Act (BIA) allows a company being restructured to resiliate one or several leases. (Subsection 65.2(1) BIA) The request for resiliation must be made between the time the notice of intention is filed and the settlement proposal is submitted.
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