Sullivan & Associates Inc. - Restructuring & Financial Advisors - Trustee in Bankrupcy

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Restructuring & Financial Consulting

Corporate Restructuring Solutions

Cash flow pressures, uncontrolled growth, lack of adequate capital, declining financial performance, governance issues, deteriorating creditor relationships……. In today’s ever changing business environment even well managed companies can be caught off guard, and can find themselves facing serious financial problems - some that may even be serious threats to survival.

While the financial picture may be overwhelming, businesses with viable operations, or with sound prospects for restoring viability, can utilize formal financial restructuring tools to “fix” their balance sheet through Restructuring Proposals under either the Companies Creditors Arrangement Act (“CCAA”) or the Bankruptcy & Insolvency Act (“BIA”).

Sullivan & Associates can help:

  • Develop restructuring strategies and plans
  • Conduct operations, viability and financial reviews
  • Design and implement:
    • cash conservation programs,
    • crisis management programs, and
  • Stakeholder communications programs
  • Help source refinancing and new capital
  • Act as a Financial Advisor to the Board, management, or senior lenders
  • Serve as or support the Chief Restructuring Officer (CRO)
  • Serve as Monitor under formal CCAA proceeding
  • Serve as a Trustee under a formal BIA proposal

CCAA Restructurings – Companies Creditors Arrangement Act

CCAA is the Canadian equivalent of the US “Chapter 11”. Designed for businesses with at least $5 million in debt, a CCAA restructuring can enable a financially distressed company to “buy some time” - to reorganize its business operations, obtain new financing or solve other problems. Creditors are usually asked for major concessions, and most successful CCAA restructurings are best facilitated when new capital is injected. This also means that existing ownership interests are usually reorganized and diluted, as this becomes a necessity for securing new capital as well as bringing existing creditors on side.

Some CCAA proceedings are initiated as a way of dealing with a crisis situation (for example, the loss of support from key secured creditors). Whether you need to react spontaneously, or if you have time to build a vision for what you want the “new” business to look like, planning is key before proceeding with any formal restructuring proposal.

BIA Restructurings – Bankruptcy and Insolvency Act

For small to mid-sized companies, formal proposals to creditors can be accommodated using the restructuring provisions in the Bankruptcy and Insolvency Act. Considerations for when and how best to use this restructuring option are similar to CCAA proceedings – for example, they work best when new capital is ready to be invested, or when certain parts of the operations need to be downsized or sold to re-establish or “right size” the business.

The rules for Proposals under this legislation are much more regimented than the rules under CCAA and, as a result, larger companies usually prefer the greater flexibility permitted in a CCAA proceeding. Companies with total debt of less than $5 million are not eligible to use CCAA, and must use the BIA for making formal proposals to creditors.

To learn more about how Sullivan & Associates can help, contact Clark Sullivan at 306.525.9206 or at:

clark@sullivanfinancial.ca

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