On the Rise

As we have seen over the last decade, the number of corporate restructurings is rising. The Canadian Government had encouraged this trend by passing the Companies Creditors' Arrangement Act ("CCAA") in 1993. This act allows companies in Canada to seek court protection giving them time to reorganize and become viable once again.

There is good reason for this new trend. On February 4th, 2004, Stelco, Canada's largest steel maker, applied for court-ordered creditor protection. This Hamilton based company employs 9,500 people, has several Billion in debts and needs time to reorganize its financial and operational affairs to survive these turbulent times. Other companies that needed or need this type of help are: Air Canada, Ivaco Inc., Consumers Packaging, Loewen Group, Canadian Red Cross Society, Philips Environmental, Laidlaw and Olympia and York Real Estate Group of Companies.

The Canadian legal system, through the Companies Creditors' Arrangement Act ("CCAA") and the Bankruptcy & Insolvency Act (Canada), recognizes that real corporate value may exist despite distress.

To learn more about restructuring or to schedule a Newhouse Partners presentation, email me or call me at the number below.

Florian Meyer MBA, CPA, CA  

Cell: 416.873.8684