Liquidating ccaa

The case provides new guidance to litigants as to when it is appropriate to lift the stay.

The operators alleged that Puratone and its directors and officers must have been planning its CCAA filing well in advance of ordering the grain and therefore had no intention of paying for it.The Manitoba Court of Queen’s Bench in Re Puratone Corporation, 2013 MBQB 171, lifted a stay of proceedings under the Companies’ Creditors Arrangement Act (CCAA) for a group of suppliers to bring an action against the debtor company and the director and officers of that company.The main claims asserted by the suppliers were that they had priority over the proceeds of the sale of the debtor’s assets through a constructive trust and for fraudulent misrepresentation by the directors and officers of the corporation for entering into sales with the suppliers on the brink of a CCAA filing.It also serves as a reminder that special considerations may apply to companies doing business while insolvent and when restructuring proceedings are contemplated. It sought protection under the CCAA and the initial order included standard stay provisions, including a stay of existing proceedings as well as further actions against the company without leave of the court.Also, actions against directors and officers for existing claims could not be commenced or continued until a compromise or arrangement was sanctioned by the court or rejected by the creditors. Through a court-approved sales process substantially all of Puratone's assets were sold to Maple Leaf Foods Inc.

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