Insolvency Institute of Canada

Insolvency Institute of Canada

September 16, 2009 09:00 ET

Insolvency Experts Welcome Implementation of Major Insolvency Reforms

TORONTO, ONTARIO--(Marketwire - Sept. 16, 2009) - The Insolvency Institute of Canada (IIC), a non-profit organization whose 125 members are leaders in the insolvency field, welcomes the proclamation of amendments that will give effect to a major reform of Canada's insolvency legislation.

A balanced and modern insolvency regime is an important part of Canada's efforts to build a strong, competitive economy. While important new wage earner protection provisions had already come into effect, Minister Clement's decision to move forward with the amendments is an important move forward for the Canadian economy. It will help small and medium sized business obtain financing by providing greater certainty to stakeholders and streamlining the administration of insolvencies.

"The IIC worked with the Government, the House of Commons Industry Committee, and the Senate's Commerce Committee in developing the amendments. The evolution of this legislation over the past few years was a testament to co-operation and consultation," said Rick Pettit, President, Insolvency Institute of Canada. "Also, officials within Industry Canada played an important role in ensuring that the legislation balances all of the competing interests that emerge in insolvencies."

The amendments that become effective this week cover a wide range of important issues. These reforms include: simplifying the process of claims by suppliers, confirming the power of the Courts to facilitate the financing and operation of insolvent companies so that they can be restructured, extending the powers of trustees outside of the province in which they were appointed, adopting procedures to facilitate international insolvencies, providing protections to both boards of directors and trustees so that the business can be properly restructured, and changes that will encourage individual debtors to attempt to work with creditors as opposed to filing for bankruptcy.

"These amendments to insolvency legislation are the broadest reform to the legislation in over ten years. They codify recent court decisions, harmonize existing federal legislation, and bring Canada in line with reforms that have been implemented by some of our major trading partners. The new insolvency regime will provide an important framework for the growth and financing of Canadian companies and help individuals find better solutions to financial problems," said Mr. Pettit.

About the Insolvency Institute of Canada (IIC)

The Insolvency Institute of Canada is Canada's premiere private sector insolvency organization. The Institute is a non-profit organization dedicated to the recognition and promotion of excellence in the field of insolvency. Its members are drawn from the most senior and experienced members of the insolvency community in Canada. Membership is limited to 125 insolvency practitioners (trustees and lawyers) who are joined by representatives of regulatory and compensation bodies, major financial institutions and prominent members of the academic community. Their goal is to promote an efficient insolvency regime that promotes successful restructurings resulting in viable businesses. IIC members understand the real world impact of changes in the current legislation.

The IIC submission to the Senate Committee is available on the IIC web site at www.insolvency.ca and a summary version is available on request to iicinfo@associationsfirst.com.

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