Lexpert
Lexpert
  • HOME
  • RANKINGS
  • NEWS
    • Lexpert special editions
    • Legal insights
    • Big Deals
    • Digital Editions
    • Lexpert TV
    • Features
    • Premium content
  • AWARDS
    • Lexpert Rising Stars
    • Canadian Law Awards
  • METHODOLOGY
    • Lexpert/ALM 500 Directory
    • Canadian Lexpert Directory
    • Who's Who
    • Practice Areas
  • TEAM
  • FAQ
  • Lawyers
  • Firms
  • Rankings
  • Largest
  • Who's Who
Digital Shellcharts
Canadian Legal Talent
Methodology
Category Definitions
What is Insolvency & Financial Restructuring?

Best Insolvency lawyers for litigation in Canada as ranked by Lexpert

Insolvency and insolvency litigation is generally understood to relate to acting for and advising lenders, other creditors, debtors, trustees in bankruptcy, receivers and other participants in corporate insolvencies and debt enforcement, collection and recovery, and typically involves bankruptcy, receivership or similar court-supervised insolvency proceedings or private enforcement remedies. Insolvency lawyers who work in litigation are focused on these topics.

 

Insolvency lawyers may also be advising corporations, financial institutions, bondholders, distress or hedge funds, investors, purchasers and other participants in the formulation, negotiation and implementation of corporate financial restructurings, whether in circumstances of insolvency or solvency and whether involving debt and/or equity, and includes informal negotiated workouts and refinancings and financial restructurings implemented pursuant to insolvency statutes such as the Companies' Creditors Arrangements Act and the Bankruptcy and Insolvency Act or corporate statutes such as the Canada Business Corporations Act or similar provincial statutes. Practitioners in this area may be involved in cross-border restructuring matters.

 

 

Please note that the Lexpert Directory has separate practice areas for:

  • Corporate commercial litigation lawyers
  • Banking lawyers

 

What is insolvency and restructuring?

Insolvency and restructuring are two separate terms which may mean different things; however, their goal is basically the same – to help a debtor-company recover from its financial difficulties in order to become financially stable once again.

 

Insolvency is when a debtor-company is in a financial distress, making it difficult to pay its creditors when these debts become due and demandable. Here, a debtor-company may implement restructuring, among other statutory procedures available to them, to manage insolvency.

 

Restructuring is when debts are “restructured” into feasible payment schedules in coordination with the debtor-company's creditors, while continuing its business operations. Plans or proposals on restructuring debts are details of how the said debtor-company will pay off these restructured debts, while sustaining operational expenses to continue its day-to-day business transactions.

 

This may result to cost cutting measures through disposal of assets, reorganisation of the company, laying off employees or reduction of their benefits but not below labour standards. The plan or proposal may also be subject to court approval or action, depending on the state laws on restructuring and insolvency, and of the creditors also.

 

Is bankruptcy different from insolvency?

In Canada, the difference between insolvency and bankruptcy is in its nature:

  • insolvency is a financial state that makes a debtor-company or -individual to pay off their debts as it becomes due, such as when the total liabilities exceed that of their current assets;
  • bankruptcy is the legal process, or may refer to the court order, which declares or is declaring a debtor-company or -individual as insolvent, thus providing for the process to be done to equitably pay these creditors out of the assets of the debtor.

 

Financial Restructuring and Insolvency Lawyers

When financial restructuring and insolvency have separate applicable statutes, or have different respective laws which may overlap with each other, financial restructuring and insolvency lawyers assist clients in the construction of these statutes.

 

As financial restructuring and insolvency lawyers, they may either represent the debtor, which is either an individual, a company, or an organisation at the verge of becoming insolvent or bankrupt; or they may also represent the creditor/s who have interests in the debtor’s insolvency or bankruptcy state.

 

Restructuring plans or proposals may be done extrajudicially or outside the auspices of the court, but this is subject to the parties’ own volition and protections set by the law may not be applicable in this case. Hence, it is recommended that restructuring be done with the help of financial restructuring and insolvency lawyers under the guidance of the court through a judicial proceeding.

 

Work done by financial restructuring and insolvency lawyers

Most of the work of financial restructuring and insolvency lawyers is negotiating with the other party for a restructuring proposal that would be beneficial to both parties – either judicially or extrajudicially. Thus, part of their work would also be transactional, such as preparation of the restructuring proposal, or other documents needed for the regulatory compliance of filing for insolvency or bankruptcy under the law.

 

After this, when court proceedings commence, financial restructuring and insolvency lawyers represent their clients before the courts during insolvency litigation, keeping in mind the desired outcomes of their clients. They are also present during administration, until receivership, or even during liquidation.

 

Prior or during the judicial filing of insolvency or bankruptcy of a debtor-company, financial restructuring and insolvency lawyers do not only exhibit their knowledge on insolvency and restructuring laws, but also of corporate laws, property laws, contract laws, taxation, or banking laws.

 

What is the Winding Up and Restructuring Act Canada?

The Winding-up and Restructuring Act (WURA) is the Canadian federal statute that mainly outlines the judicial process of liquidation, winding-up, and restructuring of government-regulated companies or corporations, financial institutions, and insurance companies.

 

Section 3 of the WURA enumerates the circumstances when a company is already considered insolvent, but mainly, when such company is unable to pay off its debts or its liabilities as these debts become due and demandable.

 

In Section 4, the WURA specifies when a company is deemed unable to pay its debts – when a creditor has sent a notice to the debtor for the payment of the latter’s debts, and the debtor has not responded after 60 days, a debtor is now considered insolvent.

 

The WURA is applicable only to corporations and companies listed in Section 6(1) that is insolvent, is currently on the process of liquidation or winding up, either by petition of the shareholders, its creditors, assignees, or liquidators, or through the control of the appointed Superintendent of Financial Institutions.

 

When an application winding up has been filed, a debtor-company ceases to operate, followed by the appointment of liquidator/s or trustee/s, and the said debtor-company's assets will be applied to the satisfaction of its debts to its creditor/s.

 

What are the insolvency laws in Canada?

The main insolvency laws in Canada are the Bankruptcy and Insolvency Act (BIA), and the Companies' Creditors Arrangement Act (CCAA). This is in addition to provincial and territorial laws on insolvency and other federal laws which may apply to a certain institution, such as the Bank Act.

 

Bankruptcy and Insolvency Act (BIA)

The BIA is the federal law on bankruptcy and insolvency processes, thus providing for the specific scope and rights of all parties involved – the debtors, its creditor/s, the trustees, and the federal government through the Superintendent of Bankruptcy.

 

Part III of the BIA governs the provisions of the proposals, which is the restructuring regime prepared by the debtor-companies or –individuals for its creditors on any compromise or sale of the former’s assets for the orderly satisfaction of the debts. Trustee/s will then manage the debtor’s properties, followed by a creditor/s’ meeting to decide on such proposal, which will be the basis for issuance of the court order.

 

Companies’ Creditors Arrangement Act (CCAA)

The CCAA is a federal law which applies to larger companies or corporations. It provides for a restructuring regime where the claims against the debtor-company is more than $5,000,000, according to Section 3(1). With end view of preventing the said debtor -company or -corporation from becoming bankrupt, the CCAA provides for processes for all parties to reach a compromise agreement, to be agreed to also during a creditors’ meeting.

 

Here, the debtor-regime of CCAA is different from the BI, where the debtor in former retains ownership of its properties and assets, while continuing its operations; as compared to the latter where a trustee is appointed. Although, both circumstances are under the supervision of the court.

 

Want to know more about these Canadian laws? Head down below to consult with the best financial restructuring and insolvency lawyers as ranked by Lexpert.

Chris Armstrong
Chris Armstrong
Year called to bar: 2008
Toronto, Ontario
Goodmans LLP
Ian E. Aversa
Ian E. Aversa
Year called to bar: 2008
Toronto, Ontario
Aird & Berlis LLP
Gregory R. Azeff
Gregory R. Azeff
Year called to bar: 2002
Toronto, Ontario
Miller Thomson LLP
Michael E. Barrack
Michael E. Barrack
Year called to bar: 1982
Toronto, Ontario
Blake, Cassels & Graydon LLP
Joseph J. Bellissimo
Joseph J. Bellissimo
Year called to bar: 2002
Toronto, Ontario
Cassels Brock & Blackwell LLP
George Benchetrit
George Benchetrit
Year called to bar: 1993
Toronto, Ontario
Chaitons LLP
John N. Birch
John N. Birch
Year called to bar: 1997
Toronto, Ontario
Cassels Brock & Blackwell LLP
David Bish
David Bish
Year called to bar: 1999
Toronto, Ontario
Torys LLP
Scott A. Bomhof
Scott A. Bomhof
Year called to bar: 1995
Toronto, Ontario
Torys LLP
Stuart Brotman
Stuart Brotman
Year called to bar: 2000
Toronto, Ontario
Fasken Martineau DuMoulin LLP
Christopher Burr
Christopher Burr
Year called to bar: 2008
Toronto, Ontario
Blake, Cassels & Graydon LLP
David R. Byers
David R. Byers
Year called to bar: 1983
Toronto, Ontario
Stikeman Elliott LLP
Jeffrey C. Carhart
Jeffrey C. Carhart
Year called to bar: 1984
Toronto, Ontario
Miller Thomson LLP
Robert J. Chadwick
Robert J. Chadwick
Year called to bar: 1994
Toronto, Ontario
Goodmans LLP
Harvey G. Chaiton
Harvey G. Chaiton
Year called to bar: 1982
Toronto, Ontario
Chaitons LLP
Dylan A. Chochla
Dylan A. Chochla
Toronto, Ontario
Fasken Martineau DuMoulin LLP
Milly Chow
Milly Chow
Year called to bar: 1994
Toronto, Ontario
Blake, Cassels & Graydon LLP
Evan Cobb
Evan Cobb
Year called to bar: 2008
Toronto, Ontario
Norton Rose Fulbright Canada LLP
Jeremy Dacks
Jeremy Dacks
Year called to bar: 1999
Toronto, Ontario
Osler, Hoskin & Harcourt LLP
Michael De Lellis
Michael De Lellis
Year called to bar: 2003
Toronto, Ontario
Osler, Hoskin & Harcourt LLP
Tony DeMarinis
Tony DeMarinis
Year called to bar: 1989
Toronto, Ontario
Torys LLP
Caroline Descours
Caroline Descours
Year called to bar: 2010
Toronto, Ontario
Goodmans LLP
Jane Dietrich
Jane Dietrich
Year called to bar: 2004
Toronto, Ontario
Cassels Brock & Blackwell LLP
James W.E. Doris
James W.E. Doris
Year called to bar: 1992
Toronto, Ontario
Tyr LLP
Brian F. Empey
Brian F. Empey
Year called to bar: 1990
Toronto, Ontario
Goodmans LLP
D. Robb English
D. Robb English
Year called to bar: 1980
Toronto, Ontario
Aird & Berlis LLP
Kathryn A. Esaw
Kathryn A. Esaw
Year called to bar: 2010
Toronto, Ontario
Osler, Hoskin & Harcourt LLP
Caitlin E. Fell
Caitlin E. Fell
Year called to bar: 2011
Toronto, Ontario
Reconstruct LLP
John L. Finnigan
John L. Finnigan
Year called to bar: 1984
Toronto, Ontario
Thornton Grout Finnigan LLP
James D. Gage
James D. Gage
Year called to bar: 1993
Toronto, Ontario
McCarthy Tétrault LLP
Virginie Gauthier
Virginie Gauthier
Year called to bar: 1996
Toronto, Ontario
Gowling WLG
Preet K. Gill
Preet K. Gill
Year called to bar: 2008
Toronto, Ontario
Bennett Jones LLP
Matthew P. Gottlieb
Matthew P. Gottlieb
Year called to bar: 1991
Toronto, Ontario
Lax O'Sullivan Lisus Gottlieb LLP
Steven L. Graff
Steven L. Graff
Year called to bar: 1991
Toronto, Ontario
Aird & Berlis LLP
Peter Griffin
Peter Griffin
Year called to bar: 1980
Toronto, Ontario
Lenczner Slaght
Geoff R. Hall
Geoff R. Hall
Year called to bar: 1993
Toronto, Ontario
McCarthy Tétrault LLP
Timothy C. Hogan
Timothy C. Hogan
Year called to bar: 1995
London, Ontario
Harrison Pensa LLP
Pamela L.J. Huff
Pamela L.J. Huff
Year called to bar: 1987
Toronto, Ontario
Blake, Cassels & Graydon LLP
Asim Iqbal
Asim Iqbal
Toronto, Ontario
Miller Thomson LLP
Ryan Jacobs
Ryan Jacobs
Year called to bar: 2004
Toronto, Ontario
Cassels Brock & Blackwell LLP
Roger Jaipargas
Roger Jaipargas
Year called to bar: 2000
Toronto, Ontario
Borden Ladner Gervais LLP (BLG)
Monique Jilesen
Monique Jilesen
Year called to bar: 2000
Toronto, Ontario
Lenczner Slaght
Aubrey E. Kauffman
Aubrey E. Kauffman
Year called to bar: 1979
Toronto, Ontario
Fasken Martineau DuMoulin LLP
Rebecca L. Kennedy
Rebecca L. Kennedy
Year called to bar: 2009
Toronto, Ontario
Thornton Grout Finnigan LLP
Maria Konyukhova
Maria Konyukhova
Year called to bar: 2006
Toronto, Ontario
Stikeman Elliott LLP
Sharon A. Kour
Sharon A. Kour
Year called to bar: 2010
Toronto, Ontario
Reconstruct LLP
R. Shayne Kukulowicz
R. Shayne Kukulowicz
Year called to bar: 1990
Toronto, Ontario
Cassels Brock & Blackwell LLP
Joseph Latham
Joseph Latham
Year called to bar: 1991
Toronto, Ontario
Goodmans LLP
Matthew B. Lerner
Matthew B. Lerner
Year called to bar: 2008
Toronto, Ontario
Lenczner Slaght
Alex L. MacFarlane
Alex L. MacFarlane
Year called to bar: 1988
Toronto, Ontario
Borden Ladner Gervais LLP (BLG)
  • PRIVACY
  • TERMS OF USE
  • TERMS & CONDITIONS
  • ABOUT US
  • ADVERTISE WITH US
  • CONTACT US
  • SITEMAP
  • SUBSCRIBE
  • NEWSLETTER
  • DIGITAL EDITION
  • AUTHORS
  • EXTERNAL CONTRIBUTORS
  • BEST LAWYERS
Copyright © 2023 KM Business Information Canada Ltd.