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Abstract: 

As restructuring options proliferate on both sides of the border, companies with U.S. and Canadian touchpoints have more choices than ever for managing financial distress. This article examines the evolving relationship between chapter 11 of the U.S. Bankruptcy Code and Canada’s Companies’ Creditors Arrangement Act (“CCAA”), highlighting the key procedural, strategic, and economic considerations that influence forum selection in cross-border restructurings. It also explores the growing use of out-of-court alternatives, liability management transactions, and innovative restructuring techniques, such as reverse vesting orders and the Texas Two-Step. Through recent restructuring cases, including Nortel Networks, Toys “R” Us Canada, Just Energy, and Coach USA, the article illustrates how relevant debtors are increasingly leveraging a range of U.S. and Canadian tools to achieve restructuring objectives in an evolving market.

Keywords: Companies’ Creditors Arrangement Act; Canada’s Bankruptcy and Insolvency Act; Comparing CCAA and Chapter 11; Cross-Border Restructuring; Insolvency Alternatives in Canada; Reverse Vesting Orders and the Texas Two-Step

Affiliations:  1: Davies Ward Phillips & Vineberg LLP; 2: King & Spalding LLP; 3: King & Spalding LLP.