Alternative Debt Solutions for Your Company

Posted on March 25th, 2019

Is your company experiencing difficulty making payments to your creditors on time? Is a poor decision or investment inhibiting your company’s ability to operate? Do you think your company would be profitable if given the opportunity to restructure itself?

If you answered yes to any of these questions, our team of corporate restructuring professionals and Trustees in Bankruptcy at msi Spergel Inc. can help you relieve your company’s debt problems without filing for bankruptcy. Your company can take advantage of restructuring proceedings in Canada available to corporations in financial trouble. These restructuring alternatives to bankruptcy include a Division 1 Proposal or a restructuring under the Companies’ Creditors Arrangement Act (CCAA).

While the CCAA has frequently been used by large multinational companies in Canada to restructure, including Nortel Networks and CanWest Global Communications, it may also be suitable for mid-market companies in Canada. To qualify for protection under the CCAA, the debts of the company and its associated companies must be at least $5 million. In a Division 1 Proposal, you are making a deal with the company’s creditors to buy time to restructure the company to return more money to them than they would receive in a bankruptcy. The company stays in control of its operations, and is granted a stay from its unsecured creditors and possibly secured creditors as well, while it restructures the company. The Division 1 Proposal process is best for companies where the restructuring is not complex and it can be completed within a short period of time. There is no minimum or maximum level of debt for a company to qualify for a Division 1 Proposal.

Where the restructuring of a company is more complex and more flexibility is required, the CCAA proceedings may be the best alternative. The benefit of filing under the CCAA is that it offers the company more flexibility and no firm deadline to complete its restructuring. It also allows for the restructuring of multiple related companies within the same proceedings and to deal with internationally related companies or subsidiaries.

The CCAA process is known to be expensive due to the numerous reports to court which results in high professional fees being charged by national accounting and law firms. This type of restructuring can be more accessible to mid-market companies when a mid-market restructuring firm, such as msi Spergel Inc., can provide the same quality of service with significantly lower billing rates, thus making this a financially viable option that otherwise might be unavailable.

Our msi Spergel Inc. team members bring a wealth of national accounting and insolvency firm experience. We bring our broad base of skills and expertise towards solving financial difficulties for companies across many industries. We have an extremely successful history of helping over 1500 companies in times of financial duress overcome their businesses’ debt problems.

msi Spergel Inc. is proud to be a founding member of The Independent Canadian Insolvency Network (ICIN), a Cross-Canada network of independent insolvency firms providing quality insolvency and restructuring services on a national basis in a cost-effective manner. If you would be interested in obtaining more information on how msi Spergel Inc. could help your Company, please feel free to contact us.

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Lending to Your Company: Protecting Your Shareholder Loan, Part I

Lending to Your Company: Protecting Your Shareholder Loan, Part II

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