Initial order (CCAA)

A buyer or lender dealing with a company in a CCAA case meets the initial order first. Section 11.02 speaks of an order on an initial application, which is the first application made under the Act for a company. A federal regulation, the Pension Benefits Standards Regulations, 1985, s. 10.8, refers to the “initial order under the Companies’ Creditors Arrangement Act”.

What the Act says about it

• Section 11.02(1): the order may last for the period the court considers necessary, up to 10 days, staying proceedings under the BIA or the Winding-up and Restructuring Act and restraining or prohibiting actions against the company; under s. 11.02(3) the applicant must satisfy the court that circumstances exist that make the order appropriate.
• Section 11.001: an order under s. 11 made at the same time or during its period is limited to relief reasonably necessary for the continued operations of the debtor company in the ordinary course of business during that period.
• Section 11.01: no order under s. 11 or 11.02 prohibits a person from requiring immediate payment for goods, services, use of leased or licensed property or other valuable consideration provided after the order is made, or requires further advance of money or credit.
• Section 11.7(1): when an order is made on the initial application, the court appoints a monitor at the same time.

Ask for the order and the court file, and ask what later orders replaced it. See buying assets from an insolvent company through a BIA process and stay of proceedings.