Notice of intention to make a proposal (NOI)

Section 50.4 of the Bankruptcy and Insolvency Act lets an insolvent person, before filing a copy of a proposal with a licensed trustee, file a notice of intention in the prescribed form with the official receiver. A buyer may meet it if a seller is insolvent and the sale is part of a proposal.

The stay and its limits

Section 50.4(8) of the Act gives the trustee thirty days after the notice was filed to file the proposal with the official receiver, subject to court extensions under section 50.4(9) and early termination under section 50.4(11); the Office of the Superintendent of Bankruptcy also says the proposal must be filed within 30 days unless the Court has granted an extension. Under section 69(1), the stay bars creditors’ remedies for a claim provable in bankruptcy, subject to section 69(2) and (3) and sections 69.4 to 69.6. It is not a freeze on every creditor.

Selling assets during it

Under section 65.13(1), an insolvent person in respect of whom a notice of intention is filed may not sell or dispose of assets outside the ordinary course of business unless the court authorizes it. See buying assets through a Bankruptcy and Insolvency Act process and approval and vesting order.