Rescue and Liquidation in Restructuring Law

The use of a restructuring regime (the CCAA) to carry out going concern sales of insolvent firms is growing in Canada. Two critical questions must be addressed when considering this phenomena. The first is whether this provides support for the view that traditional restructurings are being replaced with a court supervised sale mechanism as the preferred method for ensuring that the value of the assets of an insolvent firm will be maximized. The second concerns the appropriateness of using a scheme that was originally designed for restructuring to accomplish this task given the availability of receivership proceedings that are specifically designed for this purpose