Division I Proposal - Formal Restructuring Under the Bankruptcy and Insolvency Act (BIA)
The Division I Proposal is a formal restructuring under the federally legislated (BIA).
The Proposal proceeding may be initiated by either filing a Notice of Intention to Make a Proposal (“NOI”) or by filing a Proposal with a Licensed Insolvency Trustee. An automatic Stay of Proceedings is in place upon filing of either an NOI or Proposal.
An insolvent debtor or a bankrupt, as defined under the BIA, can make a proposal to creditors. The proposal can be for a reduction of the debts, an extension of time for payment, or a scheme of arrangement.
Under a Division I Proposal proceeding, the debtor retains control of the assets, except where control of the assets by the trustee is stipulated in the proposal.
A Division I Proposal, once accepted by the company’s creditors, is binding to all creditors. If the creditors refuse to accept a Division I proposal, the debtor is deemed to have made an assignment in bankruptcy.
The Division I Proposal is a complex process and requires a detailed discussion and review of the debtor’s company’s financial condition.
For further information, call us at (604) 558-8020 to discuss.