CANADA Trends and Developments Contributed by: Larry Ellis, Kyla Mahar, James Reid and Pavin Takhar, Miller Thomson LLP
the development of the proposal, the proposal trustee is also responsible for: • communicating with creditors on the content of the proposal; • acting as an impartial court officer and not as an agent for the debtor; • monitoring the debtor’s business and financial dealings throughout the period beginning on the filing of the notice of intention to make a proposal;
found that the commencement of CCAA proceedings is a proper exercise of creditors’ rights in certain cir - cumstances ( Miniso International Hong Kong Limited v Migu Investments Inc , 2019 BCSC 1234 at paras 45, 47). These proceedings demonstrate that creditors are not prepared to sit around for debtor companies to take actions to restructure when their financial posi - tion is at risk. A creditor may lead a CCAA process when it determines that it is in the best interests of the company to complete a going-concern sale but has lost faith in the management’s ability to complete a CCAA process. Further, if there are instances of fraud or management interference, a debtor-led CCAA pro - cess may be beneficial. Hand in hand with the creditor-driven CCAA, we are seeing courts grant orders which enhance the powers of the monitor to create “super-monitors”. With these enhanced powers, the monitor effectively is taking on all care and management of the insolvent business and the assets of the corporation going forward. A super-monitor may be a great tool for a creditor in In 2022, the Supreme Court of Canada released the Petrowest decision, which set out the legal test to determine when contractual arbitration clauses can be overridden in favour of litigating disputes in court with - in receivership proceedings ( Peace River Hydro Part- ners v Petrowest Corp, 2022 SCC 41 ). In Petrowest , the Court decided that certain legal disputes against the debtor company could proceed in the receivership court proceedings rather than by arbitration, despite the existence of an arbitration agreement. In this way, the Petrowest factors were used as a sword rather than a shield for the debtor company so that the debt - or company could pursue its action efficiently. CCAA proceedings. Expedited litigation A recent trend in Canadian insolvency is that the Petrowest factors are being used as a sword by debt - ors in CCAA or proposal insolvency proceedings. For example, in the Matter of the Compromise or Arrange - ment of Mercy Falls BC Inc., the Court found that the Petrowest factors applied such that the debtor com -
• sending information to the creditors; • administering the claims process; and • voting on a proposal, among other things. Commercial list
Courts in certain jurisdictions across Canada, includ - ing Ontario and Alberta, have a “commercial list”, which is of benefit to stakeholders. These specialised courts have been designed to expedite the resolu - tion of commercial insolvencies and other complex commercial matters. Cases on the commercial list are overseen by judges with expertise in insolvency and other commercial law, which ensures that these proceedings are handled efficiently and with a deep understanding of the relevant legal principles. Proce - dural issues on the commercial list are often stream - lined and more flexible than traditional matters, which allows for proceedings to be heard before a court in an expedited manner. Useful tools in the insolvency toolbox Insolvency proceedings in Canada encourage innova - tive strategies to maximise value for the greatest num - ber of stakeholders, including creditors, customers, suppliers, government agencies and shareholders. The below tools have been utilised in 2025 proceed - ings that should be considered tools in the insolvency practitioner’s toolbox. Creditor-driven CCAA proceedings and enhanced monitor powers In 2025, we have seen a number of creditor-driven CCAA proceedings. Although the CCAA is generally a debtor-driven process, the CCAA has been interpret - ed to grant standing to creditors to commence pro - ceedings in respect of a debtor company. Courts have
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