The Structure of Secured Priorities in Insolvency Law
Banking & Finance Law Review, Vol. 27, p. 25, 2011
26 Pages Posted: 10 Mar 2011 Last revised: 5 May 2017
Date Written: March 8, 2011
Abstract
Canadian insolvency law originally did not have much to say about the priorities of secured creditors. This has changed dramatically over the past two decades. Bankruptcy law creates several new secured charges or interests, but it destroys other types that otherwise would be effective. It also imposes a registration requirement and regulates the priority ranking of secured charges in favour of the Crown. This system of secured priorities in bankruptcy now occupies a dominant position in Canadian insolvency law and greatly influences priority outcomes in restructuring proceedings and receivership proceedings. The multi-layered hierarchical ranking of secured claims means that choices made by senior claimants have a considerable impact on junior claimants. Therefore the principles governing the marshalling of securities and the recovery of administrative expenses play a pivotal role in the structure of secured priorities in insolvency law.
Keywords: Bankruptcy, Insolvency Law, Receivership, Restructuring, Priorities, Secured Transactions
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