Bankruptcy is a state which occurs when a corporation either voluntarily assigns itself, or is petitioned into bankruptcy by a creditor. The appropriate documents are filed with the official receiver in bankruptcy. To find out if a local company has filed for bankruptcy, and who has been appointed trustee or receiver for the company, contact the office of the SUPERINTENDANT OF BANKRUPTCY at Industry Canada at 1-866-941-2863 or online at http://osb.ic.gc.ca/. Please note that industry Canada now charges an $8 fee for bankruptcy searches.
In bankruptcy, all of the property of the bankrupt company becomes vested in the Trustee in Bankruptcy.
On the date of bankruptcy, no creditor, other than a secured creditor, may make, commence, or take any further action against the corporation outside of the bankruptcy proceedings. Accordingly, no unsecured creditor is able to sue or take any steps in litigation to recover monies owed to it by the bankrupt corporation.
In bankruptcy, the Trustee in Bankruptcy acts for the benefit of all creditors by realizing on the assets of the bankrupt corporation and by distributing the money to the unsecured creditors.
In bankruptcy, any secured creditor is entitled to realize on its security. Any property that remains left over is distributed first to a group of preferred creditors and secondly, to all other creditors in equal shares.
General information on bankruptcy is available from the Office of
the Superintendent of Bankruptcy's website at: http://osb.ic.gc.ca/