GREY:XEBEQ - Post by User
Post by
AlwaysLong683on Sep 29, 2022 9:21pm
319 Views
Post# 34996532
Companies' Creditors Arrangement Act (CCAA)
Companies' Creditors Arrangement Act (CCAA) CCAA process as presented on the Government of Canada's website
"The Companies' Creditors Arrangement Act" (CCAA) is a federal law allowing insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs." with the goal of trying and avoid bankruptcy.
It offers the company a chance to continue operations while trying to reach a deal with creditors.
As stated in one of my earlier posts, other companies have recently worked with their creditors to revise debt convenants / terms to allow them to continue operations without having to file for CCAA protection, so my guess is XBC's creditors were not willing to allow XBC any rope in relaxing any debt payment terms and decided to take their chances with CCAA proceedings as I suspect creditors anticipated XBC would make this move before it violated any terms of its agreements with creditors.
Here's Reitmans Story
It appears from the above article that Reitmans filed for CCAA protection on May 19, 2020 (during the COVID disaster that hit many retail establishments quite hard) and emerged from it in mid-January 2022 (about 19-20 months later). I assume the common shares did not trade throughout this period.
Not sure if XBC will be able to do likewise as an unforseen global pandemic seemed to be the blow that caused Reitmans to seek CCAA protection, whereas XBC doesn't seem to have a "circumstances beyond our control" excuse.
Hope this helps those XBC shareholders who are wondering how the CCAA process works.....