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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.

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