C.E. Craig & Associates Inc.

Receivership – Corporate Insolvency

Receivership – What is it?

Receivership is an option when there is a corporate insolvency.  A Receivership is an option for a secured lender when a debt is unpaid and in default.  If a Canadian business is experiencing financial difficulties it may be asked to consent to the appointment of a Receiver

Consenting to a Receivership appointment is not the only option.  And insolvent business may also consider , Corporate Bankruptcy, Division 1 Proposals, to and  informal restructurings.

Often in relation to companies you may hear various terms including:


  • Receivership Corporate Insolvency
  • Receiver/Manager
  • Notice of Intention to Enforce Security
  • Corporate Bankruptcy
  • Division 1 Proposal
  • Winding Up of a Company

But what is a corporate Receivership or Receiver/Manager in Canada?

Receivership in Canada – What is it?

A Receivership is not something a company does for itself. Rather a Receiver is appointed by a secured creditor.  The Receiver’s role is to take possession of the insolvent debtor’s assets for the sole purpose of protecting the interest of the secured creditor.  The Receiver  then sells these company’s assets and pays the secured creditor only.

Powers of a Receiver

The secured creditor’s right to appoint a Receiver is outlined under their Security Agreement.  These agreements are what the company signed when the debt was advanced.  The security agreement sets out the secured charge over the debtor’s assets (not real estate)

In British Columbia any Receiver in addition to having an obligation to the appointing secured creditor, will also have a duty under the Personal Property Securities Act of BC.  This Act requires the Receiver to act in good faith and in a commercially reasonable manner.  This rule obliges any appointed Receiver to have a broader duty of care than to just the secured creditor

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A secured creditor can appoint a Receiver

or a Receiver / Manager in either of two ways:

By Private Appointment

The General Security Agreement (GSA) or other security agreement outlines the rights of a secured creditors to appointed a Receiver.  Generally, secured can only appoint a Receiver/Manager when some default on terms of the debt has occurred.  The secured creditor must send NOTICE of Intention to Enforce Security and Notice of Default before a Receiver can be appointed.

By Court Appointment

When appointed by The Court, the powers of the Receiver / Receiver-Manager are outlined under the Court appointment document. Court appointment is a more costly alternative to private appointment, but can grant greater powers to the Receiver.


Whether privately or court appointed, the Receiver has a duty to:


  • Protect and preserve the assets.
  • Take over management of the entity.
  • Act in the best interest of the entity.
  • Attend to PPSA and Bankruptcy and Insolvency Act required filings.

Section 244 notice – Notice of Intention to Enforce Security

Under the Bankruptcy and Insolvency Act a Notice of intention to Enforce Security is requited to be given to the entity if a secured creditors wishes to act on its security such as appointment of a Receiver.   As a small business owner who receives this notice from a secured creditor knows that the relationship between you and the bank/creditor has come to a critical point.

This notice must be delivered to any debtor with at least 10 days’ notice before any secured creditor can act under their General Security Agreement such as appointing receiver or a trustee. If you have received one of these notices, you may still operate your business and you may have other options such as filing Proposal or indeed assigning into bankruptcy yourself. However, this formal notice indicates that not much time is remaining and immediate action is required.

If your surplus income payments are an average of $100 or more based on the Superintendent’s Standards during the first 9 months of your bankruptcy, you are required to continue submitting monthly statements of income and expenses together with any payments for an additional 12 months. You will receive an automatic discharge after 21 months if you have submitted the monthly statements, paid all surplus income accumulated during the 21 months and complied with your duties as a bankrupt.

In Summary – Business Insolvent? – Corporate Bankruptcy, Division 1 Proposal or Personal Bankruptcy – Which of these is the correct choice?

Generally, corporate bankruptcy is used when there are unsecured assets belonging to the company that need to be divided up amongst the creditors. In other situations, a Winding-Up of the Company is needed under the direction of a Trustee to give comfort that all parties are being treated equally. Colleen Craig, as a federally Licensed Insolvency Trustee (formerly bankruptcy trustee), can walk you through your options if you are considering a Corporate bankruptcy.

Federal Government Licensed Programs:

The Office of the Superintendent of Bankruptcy can help to steer you towards the professionals who can help:


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Colleen Craig


Colleen founded C.E. Craig & Associates Inc. in 2003 after 10 years in the insolvency industry. As a federally licensed Trustee in Bankruptcy she deals with the day-to-day issues that creditors and debtors encounter when they are faced with Insolvency situations. As a Chartered Accountant, Colleen brings a pragmatic approach to dealing with the complex matters and finding the right solution for all parties.

Janet White


Janet has been with C.E. Craig & Associates Inc. since 2003, when the company opened. She helped build the practice from the ground up, giving her a thorough understanding of the ins and outs of insolvency legislation and procedures.

Lesley Bentley


We were pleased to welcome Lesley Bentley into our firm in 2013. She has been an Estate Administrator for over 30 years offering advice to individuals struggling with personal financial issues.

Badger the Dog


 No formal insolvency training, but also non judgmental, loyal, and cute.

Reach out to a debt solutions manager today:




Reach out to a debt solutions manager today:




Reach out to a debt solutions manager today:







Reach out to a debt solutions manager today: