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Corporate Restructuring

Where the context allows it, we advocate financial recovery through corporate restructuring. This option benefits all parties involved and provides the following advantages:

• Business continuity;
• Job preservation;
• Maintenance of client relationships;
• Preservation – even strengthening of the secured creditors' standing;
• Protection of the value of stockholder shares.

Our financial advisors offer a wealth of services aimed at restructuring businesses including:

• The evaluation of the organizational structure;
• Project analysis;
• Corporate appraisal;
• Improvement of management practices;
• Implementation of recommendations;
• Planning and budgeting;
• Creation of a Board of Directors;
• Interim management;
• Management of human resources.

There are two main types of restructuring – informal and formal. Informal restructuring is possible when a company has few creditors, when the causes of the insolvency are known and when a solution to the problem can quickly be instituted. In this case, recourse to the Bankruptcy and Insolvency Act may not be required.

Formal restructuring is conducted under the Bankruptcy and Insolvency Act. This type of restructuring allows a company to consolidate its debt at a given date, suspend all legal action against it, prohibit creditors from realizing on their security and give it the time it needs to seek out new capital or financing. When a solution to the cause of the insolvency has been identified, a proposal is drafted for the creditors (offer to settle). Creditors then vote for or against the proposal during a meeting. Once the creditors have accepted the proposal, it is ratified by the Court and becomes binding on all creditors.

For large businesses that owe at least $5 million, restructuring can be conducted under the Companies’ Creditors Arrangement Act.