The provisions of the BIA that permit a court to impeach transactions77 are fully applicable in BIA restructuring proceedings.78The provisions are modified by using the date of the filing of the notice of intention or the proposal instead of the date of the debtor’s bankruptcy. If a proposal is annulled, the date of the initial bankruptcy event is used.79
The CCAA originally did not contain a comparable provision. As a result, parties who wished to challenge a transaction had to seek leave to lift the stay of proceedings in order to apply for a bankruptcy order. This would allow the applicant to preserve the remedies available under the BIA in respect of impeachable transactions. The CCAA has now been brought into alignment with the BIA restructuring proceedings in respect of the automatic application of the impeachable transactions provisions.80The provisions are modified by using the date of the commencement of CCAA proceedings and by giving the monitor the same impeachment powers that can be exercised by a trustee.
The impeachment powers set out in the BIA can be used to impugn transactions that took place before restructuring proceedings were commenced. For example, the trustee or monitor may seek to avoid a transaction under which assets were transferred to a related party before the commencement of restructuring proceedings. Although the trustee or monitor may also want to use the impeachment powers against transactions that occur after the commencement of restructuring proceedings, there is an impediment in the way of doing so. The impeachment
powers contained in the BIA permit a trustee to impugn a transaction that occurs within a specific window of time. These time periods end on the date of the bankruptcy. In restructuring proceedings, the date of bankruptcy is to be read as the date on which the restructuring proceedings are commenced.81This means that the impeachment powers are not available in respect of transactions that occur after the commencement of restructuring proceedings.
Provincial law also gives creditors the right to avoid transactions as fraudulent preferences or conveyances. The BIA permits a trustee in bankruptcy to invoke these provincial powers,82and it would follow that a trustee under BIA restructuring proceedings would also enjoy the ability to do so.83The CCAA does not contain an express statutory provision that gives a monitor a similar ability to invoke provincial law to impeach...