RE:RE:RE:RE:RE:RE:RE:Treatment chargesYes, it's not a good thing when the loan covenants cannot be met but it's hardly instant bankruptcy. Typically, there will be a series of negotiations where the creditor reevaluates the risk and proposes new (often less favorable to the debtor) terms. Similar to when a firm's bond rating drops, it becomes more expensive to borrow.
Forcing a company to file for bankruptcy is often not the best option for the creditor. At that point everyone is at the mercy of a judge and/or trustee. It's far easier to conduct negotiations without having to go through the court. In addition, the judge often immediately suspends payments on the loan (bad for the creditor's cash flow) and allows the debtor to come up with a plan for reorganization.
I'm not sure about all the details in Canadian law but creditors (along with shareholders) come out on the short end in a bankruptcy filing. Consequently, creditors are usually anxious to negotiate.