Monitor (CCAA)

A buyer or seller meets the monitor when a company is restructuring under the CCAA. Under s. 11.7(1), when an order is made on the initial application in respect of a debtor company, the court shall at the same time appoint a person to monitor the company’s business and financial affairs. The Office of the Superintendent of Bankruptcy tells readers who need more information on a proceeding to contact the monitor for it.

What the Act gives the monitor

• Under s. 23(1), the monitor reviews the company’s cash-flow statement as to its reasonableness and files a report with the court on its findings.
• Under s. 24, the monitor has access to the company’s property, books and records to the extent necessary to adequately assess its business and financial affairs.
• Under s. 35(1), the debtor company shall provide the assistance necessary to enable the monitor to adequately carry out its functions.

Where a buyer meets it

Under s. 36(1), a debtor company subject to a CCAA order may not sell assets outside the ordinary course of business unless a court authorizes it. Under s. 36(3), the court is to consider, among other things, whether the monitor approved the process leading to the sale and whether the monitor filed a report stating that in its opinion the sale would be more beneficial to the creditors than a sale under a bankruptcy; s. 36(4) adds conditions for a sale to a related person. Ask who the monitor is and for its reports. See the CCAA and whether a court-approved insolvency sale wipes out existing claims.