An addition to Canada’s insolvency regime: section 192 of the Canada Business Corporations Act
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Date
2019-08-28
Authors
Davis, Myles
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Abstract
Section 192 of the Canada Business Corporations Act allows corporations to apply to a court of competent jurisdiction for arrangement. An arrangement might include a variety of changes to a corporation, including amendments to its articles of incorporation, exchanges of its securities for property, money, or other assets, or even a merger with another corporation. On its face, subsection 192(3) of the statute should bar such restructuring by arrangement in situations of insolvency. However, as scholars and practitioners have noted, section 192 arrangements, with the purpose of restructuring insolvent corporations, have become commonplace in the last decade.
At this juncture it seems appropriate to assess the practical developments, and perhaps new role, of section 192 within the Canadian corporate insolvency system. This thesis analyzes and applies principles of statutory interpretation to help us better understand how the judiciary has the authority to approve insolvent arrangements under section 192. It also involves a recursive legal analysis, tracking the history of jurisprudential evolutions in section 192 interpretation and application. The resulting work is an in-depth study, hopefully useful to legal scholars and practitioners alike, furthering section 192 as part of Canada’s corporate insolvency system and helping us better understand how it became the insolvency restructuring provision it now is today.
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Law, Insolvency, Restructuring, CBCA, Corporate arrangements