Scope

In addition, the court has broad discretion in administering any other issues that may arise.^[37] As the Act says,

“

...the court, on the application of any person interested in the matter, may ... make any order that it considers appropriate in the circumstances.[4]

”

This has allowed for very creative applications for resolving difficult scenarios, including:

• the packaging and orderly resolution of holdings of asset-backed commercial paper by multiple investors, which can include the release of claims against third parties who are themselves solvent and not creditors of the debtor company^[38][39][40]
• dealing with limited partnerships managed by an insolvent general partner^[41]
• arranging for disposal of the company through a stalking horse offer^[42]
• providing a more effective way for arranging merger and acquisition transactions involving distressed companies^[43]
• administering the liquidation of the company^[44]
• declining to approve restructuring plans, either because they are poorly conceived^[45][46] or contrary to the best interests of the parties concerned^[47]

Stability during proceedings

In order to assure that the company's operations will continue during the proceedings, the court has power to declare that the assets of the company are subject to a security or charge with respect to certain matters, and may further order that such charges rank ahead of those of secured creditors. They include:

• arrangements similar to debtor-in-possession financing for sustaining the company's operations^[48][49] (also known as a "DIP charge")
• payments to specified suppliers for continuing to provide goods or services that are critical to the company's operation^[50]
• indemnification for directors and officers for actions done after the commencement of proceedings, where appropriate insurance coverage is not in effect.^[51]
• security (known as an "administration charge") for fees and expenses of the monitor and any other specified financial, legal or other experts.^[52]

This "super priority" status is construed broadly, and has been held to even defeat statutory deemed trusts (such as those concerning pension plan deficiencies and vacation pay that exist in Ontario),^[53][54] as well as in rem claims such as maritime liens that are found in maritime law.^[55]

Other powers

The court may also order:

• the removal of directors if they are unreasonably impairing (or likely to unreasonably impair) the possibility of a viable compromise or arrangement being made in respect of the company, or are acting (or likely to act) inappropriately as a director in the circumstances.^[56]
• recovery of amounts arising from fraudulent preferences and undervalue transactions^[57]
• the coordination of its proceedings with corresponding foreign proceedings^[58]