Corporate bankruptcy

Corporate bankruptcy is a process governed by the Bankruptcy and Insolvency Act, during which a company hands over its assets to a licensed insolvency trustee. The trustee liquidates the assets and distributes the proceeds to creditors. In most cases, the company ceases operations and is dissolved. Sometimes, however, the trustee chooses to continue operations temporarily, with a view to selling the business while it is still in operation. This strategy often maximizes the value of the assets realized, to the benefit of the creditors.

For company directors, certain liabilities may remain despite bankruptcy. They may be held personally liable, for example, for certain tax or salary obligations incurred prior to bankruptcy, or when they have signed a bond or contractual undertaking.

Bankruptcy is a legal process that requires specialized expertise. The professionals at BRESSE are in the best position to guide you through the process with clarity and rigor, explaining the practical implications and solutions adapted to your situation.

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Is corporate bankruptcy relevant to your business?

If any of these statements apply to you, a notice of intent may be the right solution.

You’ve looked at all the possible options.

You want to close your company, but its debts are too high.

You wish to limit your personal responsibilities as a director.

The situation is likely to deteriorate further if you continue to operate.

You’re ready to move on quickly.

The advantages of commercial bankruptcy

Proceedings against your company are suspended

As soon as you file a notice of intention to make a proposal, your company’s creditors must suspend the proceedings they have initiated against it.

You get time to see things more clearly

The law can give you up to six months to prepare a settlement offer to your creditors and a recovery plan for your business.

Payment of your company’s debts is suspended

Payments to creditors are generally suspended. Funds from your current operations pay your ongoing obligations: wages, rent, supplies, etc.

You can cancel certain contracts

The law allows your company to terminate contracts that are detrimental to its survival. For example, certain real estate leases or rental agreements can be terminated.

The stages of corporate bankruptcy

Find out how corporate bankruptcy works and what it means for your business.

Step 1
Assessing your company's financial situation

With the help of your advisor, you review all the possible options. If bankruptcy proves to be the best solution for your situation, the process is explained to you in detail. The trustee also assists you in determining the most strategic time to initiate proceedings, an important choice that can help limit your personal liabilities.

Step 2
Filing for bankruptcy

Once the documents have been signed and filed with the Office of the Superintendent of Bankruptcy, the bankruptcy becomes official and applies to all your creditors.

Step 3
Assumed by the building manager

The managing agent takes over and implements the usual conservatory measures.

At this stage :

  • The company’s operations come to an end (with some exceptions, at the discretion of the trustee);
  • An inventory is drawn up and access to assets and premises is controlled;
  • Creditors are informed of the bankruptcy and invited to apply to the trustee;
  • Employees are notified and provided with all necessary documents (termination of employment, tax statements, wage claim forms, etc.);
  • The trustee takes possession of the company’s records;
  • Perishable goods are quickly liquidated.
Step 4
Meeting of creditors

Approximately 21 days after filing for bankruptcy, a general meeting is called. The company director must attend in order to answer questions from the creditors present, although their participation is optional and often limited.

At this meeting :

  • The trustee presents a report on the preliminary administration of the file;
  • Creditors can ask questions of the trustee and the former director;
  • The official appointment of the syndic is confirmed;
  • Creditors may formulate directives concerning the administration of the bankruptcy;
  • Inspectors may be appointed from among the creditors present.
Step 5
Audit of financial transactions

The trustee examines the company's accounting records to ensure that no fraudulent transactions have taken place.

Step 6
Audit of financial transactions

The company's assets are liquidated, and the funds collected are redistributed to creditors according to the order of priority established by the Bankruptcy and Insolvency Act. Once this step has been completed, the trustee closes the file and the bankruptcy is considered complete.

Opt for corporate bankruptcy

Corporate bankruptcy can offer a structured solution for starting afresh on a sound footing. In many cases, it's the most direct route to a fresh start.

Real-life cases of corporate debt resolved thanks to our expertise.

Find out how BRESSE has been able to offer tailor-made solutions for every situation.

Testimonials from businesses

Other solutions

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