Why the CCAA isn’t just for big companies (and big lenders) anymore: Key insights from our latest webinar

Can the Companies’ Creditors Arrangement Act (CCAA) be a viable option for smaller or medium-sized businesses? Our latest 30 minute webinar—Why the CCAA Isn’t Just for Big Companies (and Big Lenders) Anymore—brought together four experts who worked on the Innovere Medical file to explore just that.

Moderated by Insolvency Insider’s Dina Kovacevic, the panel included:

• Adam Slavens, Partner, Torys

• Mitch Grossell, Partner, Thornton Grout Finnigan

• Allen Yao, Vice President, EY-Parthenon

• Lee Nicholson, Partner, Stikeman Elliott

The panelists walked through the Innovere Medical case, highlighting how a sale process was completed in just over two months via a reverse vesting order (RVO), supported by a modest DIP loan. Key questions explored during the webinar included:

Why Innovere chose the CCAA over a Notice of Intention (NOI) under the Bankruptcy and Insolvency Act (BIA) from the outset.

Adam Slavens, who represented the company, emphasized the flexibility and deal certainty that the CCAA framework offered in this case, and called into question the utility of NOI proceedings when compared to CCAA proceedings more generally: “Without the need for the automatic stay, there really is not a lot to like about NOI proceedings when compared to the CCAA.”

Legal considerations for advisors when navigating CCAA for mid-sized entities. 

Lee Nicholson, who represented the DIP lender, highlighted the importance of always anticipating the next issue: “The process is going to be what the process is going to be, and the DIP lender is the one who is stuck funding it. It’s important to understand how the case is going to develop and to look around the corners right from the start.”

The crucial role of the court-appointed monitor in ensuring a timely and cost-effective process. 

Allen Yao, who acted as the monitor, explained how pre-filing efforts made all the difference, and how the parties worked together collaboratively from the outset to achieve a common goal: “For a mid-sized file, a pragmatic approach is really crucial.”

The potential pitfalls of the structured, rules-based approach in the BIA as compared to the flexible structure of the CCAA. 

Mitch Grossell, who represented the monitor, shared a cautionary tale from another case which highlights how the choice of filing under the BIA or the CCAA can have very practical and unintended consequences: “The CCAA is more flexible, and that also extends to the test for stay extensions.”

The session closed with each speaker offering their key advice on choosing between a CCAA and an NOI for mid-sized debtors. One consistent theme: the CCAA is no longer the exclusive domain of large businesses. With the right preparation and professionals, it can offer significant advantages—even to modestly-sized companies.