5. Cross-Border Insolvencies

5.1 How are cross-border insolvencies co-ordinated?

Like Chapter 11, the CCAA provides for the co-ordination of cross-border insolvencies. Where appropriate, the Canadian court will recognize the orders of a foreign court in Canada, including a recognition of a foreign stay of proceedings or a foreign court order approving a plan of arrangement. This typically occurs where the principal business of the debtor is in a foreign jurisdiction but the debtor has some assets and/or creditors in Canada and thus needs the Canadian court’s assistance in giving effect to the overall insolvency proceeding. A number of cross-border insolvencies have demonstrated that simultaneous proceedings under Chapter 11 and the CCAA can be harmoniously conducted. Canadian and U.S. courts have been able to co-ordinate the provision of DIP financing, stalking horse going-concern sales and a host of other relief required by U.S. and Canadian debtors in related cross-border proceedings.

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