Consumer Issues - Bill C-55

High Income Tax Debt: Bankrupt individuals with more than $200 000 in personal income tax debts representing 75 percent or more of their total unsecured liabilities will not be eligible for an automatic discharge. These individuals will have to seek a Court order to be discharged of their debts. They will have to convince the Court that the relief they are seeking is justified on the basis of their efforts to repay their debts, their financial situation when the debt was incurred and their future financial prospects. The Court will be able to fix conditions on the discharge. Specifically, the Court may refuse to discharge these individuals from bankruptcy, suspend their discharge for a period of time, or require the bankrupt to comply with any requirement as the Court may direct. This is meant to be an anti-abuse measure targeting high-income individuals who may strategically use bankruptcy to avoid paying large income tax debts.

Exemption for RRSPs: RRSP and RRIF exemptions will be in accordance with the laws of the province where the provinces have such exemptions. The provinces that have RRSP and RRIF exemptions are Saskatchewan, Manitoba, Quebec, Prince Edward Island and Newfoundland and Labrador.

This wording change will result in the following:

• A one year claw back will only be in effect for RRSPs in provinces without RRSP exemption laws;
  
• There will be no upper cap on the amount of RRSPs that can be protected;
  
• There will be no need to set up the RRSPs in a locked in plan to make them eligible for exemption;
• The court will have no jurisdiction to extend the one year claw back period period in an appropriate case.

Dollar Threshold for a Consumer Proposal is Raised: A consumer debtor can now be considered for filing a consumer proposal if the individual's aggregate debts, excluding debts secured by the individual's principal residence, are not more that $250,000. This is an increase from $75,000.

Mandatory Surplus Income Payments: Bankrupts will be required to make surplus income payments to the estate in accordance with directives issued by the Superintendent of Bankruptcy. Trustees will no longer have the discretion to recommend that a bankrupt should pay less of their surplus income than the amount determined according to the Superintendent's directive. First-time bankrupts with surplus income will be required to make payments for nine months. If, at that end of the nine-month period, the surplus remains, the bankrupt will be required to make additional payments for a further 12 months and for a further time as the Court may order. Second-time bankrupts with surplus income will be required to make payments for 24 months. If the surplus income remains after 24 months, the bankrupt will be required to make surplus income payments for a further 12 months and for such further time as the Court may order. The changes are intended to require bankrupts who have the financial ability to make reasonable contributions to their creditors to do so prior to obtaining their discharge.

Automatic Discharge of Second-Time Bankrupts: Second-time bankrupts will be eligible for an automatic discharge after 24 months from the date of bankruptcy. This measure will only apply to those who have completed mandatory counselling and who have made payments of their surplus income to the creditors. Under the current system, debtors who are bankrupt for the second time are not eligible for an automatic discharge. They must appear before the Court to seek a discharge, even when no opposition has been filed. In some areas, lengthy delays for hearing dates are not uncommon and have caused some bankrupts to wait an unduly long time for a discharge hearing.

Student Loans: Student loan debt will be eligible for discharge in bankruptcy if seven years have passed since the former student has terminated his/her studies. Currently, student loan debt can only be discharged after 10 years from the termination of studies. In addition, in cases of undue hardship, a bankrupt may apply to the Court to obtain the discharge of the student loans after five years. For the Court to discharge on hardship grounds, it must be satisfied that the debtor has acted in good faith and is expected to continue to experience financial difficulties. This amendment complements a variety of programs and services that are available to former students under the Canada Student Loans Program to help them manage their student loan debt when they experience financial difficulty.

Prohibition on Ipso Facto Clauses in Bankruptcy: The amendments place limits on the exercise of "ipso facto" contract clauses in bankruptcy. An ipso facto clause is a contractual term that generally allows a creditor to terminate a contract or a supply of service if an individual enters into proceedings under an insolvency statute. For consumers, the primary concern over ipso facto clauses relates to basic services, such as telephone, gas, electricity and leases. This prohibition exists now in the case of consumer proposals and will be extended to bankruptcy situations.

Commercial Issues - Bill C-55

Unpaid Wages: Claims for unpaid wages and vacation pay in bankruptcy situations will be given a higher priority, above secured creditors. Workers' claims will now have a charge over the current assets (i.e. cash, inventories and accounts receivables) of the bankrupt employer, up to a maximum of $2000. The protection will also be made applicable to receivership and restructuring under both the BIA and CCAA. This new measure is designed to work in tandem with the WEPP.

Wage Earner Protection Program: The WEPP will be established under the responsibility of the Minister of Labour and Housing to compensate individuals for amounts earned, but not paid, during the six months preceding the bankruptcy or receivership of their employers under the BIA. The WEPP will help protect workers by providing a guaranteed payment of wages owed up to $3000 should their employer declare bankruptcy. These payments will be subject to income tax and take into consideration other appropriate contributions. The WEPP recognizes that the present insolvency system lacks an effective mechanism to provide prompt and certain payment of unpaid wages and vacation pay in bankruptcy or receivership situations. No longer will workers' claims depend solely upon the asset value of their bankrupt employers' estates. Where a worker's claim is paid by the WEPP, the worker is required to assign their rights under the BIA to the Crown for amounts paid out under the program.

Pension Protection: Regular pension plan contributions by employees and their employers that are unremitted at the time of bankruptcy or receivership will have priority status, ranking above secured creditors. Moreover, in both the BIA and CCAA, no restructuring proposal or plan can be approved by the Court unless it provides for the payment of outstanding unremitted pension plan contributions and ongoing employer pension plan contributions explicitly protected in the BIA and CCAA, without detracting from protection under pension legislation.

Labour Contracts: The amendments specify that a debtor company can seek a Court order authorizing it to serve a "notice to bargain" on the bargaining agent representing its employees, which would trigger a renegotiation of the collective agreement under the applicable labour legislation. In these circumstances, the company has to satisfy the Court that such an order is necessary for a restructuring of the company, that it has made legitimate efforts to renegotiate the collective agreement with the union, and that the failure to do so would lead to irreparable harm to the employer. The debtor company must provide the union with at least five business days notice before it goes to the Court to seek the order. The existing collective agreement will remain in force unless it is changed by agreement between the parties. Where a collective agreement is revised, the bargaining agent may make a claim, as an unsecured creditor, for an amount equal to the value of the concession.

Treatment of Other Contracts: Contracts with a debtor company may be terminated by the debtor. This applies to all contracts except an eligible financial contract, a commercial lease or a collective agreement. Both the BIA and CCAA would allow for a contract to be disclaimed with notice to the co-party to the contract. The co-party can object and ask the Court to determine whether the disclaimer is appropriate in the circumstances. Where a contract is disclaimed, the co-party has a claim for damages as an unsecured creditor. While the courts generally allow for the disclaimer of contracts, these new rules add consistency and predictability to the process. They also provide some recourse for the co-party for the value of the disclaimed contract. The amendments also provide for the assignment, under the Court's supervision, of certain contracts to a third party.

Interim Financing: The reforms expressly provide that the Court may authorize interim financing to the debtor company during the restructuring process with a priority ranking ahead of existing secure lenders. In exercising its discretion, the Court has to consider certain factors before authorizing interim financing (e.g. trustworthiness and competency of management; whether the debtor has the confidence of major creditors; the expected length of the restructuring period; the interim financing impact on the prospects of a successful reorganization; the nature and value of the insolvent person's assets; and whether any creditors will be materially prejudiced during the proceedings as a result of the continued operations of the insolvent person). Troubled companies often require interim financing to continue operations. Although interim financing is regularly granted, there are no provisions governing how the financing is authorized, resulting in some uncertainties. These amendments will provide the necessary legislative guidance to ensure predictability.

Regulatory Measures: The Court would have the authority to enforce a stay of proceedings on regulators if the regulators are acting as creditors trying to collect a debt that has accrued prior to filing for bankruptcy protection by the debtor. In addition, the debtor could apply to the Court, with notice to the affected regulator, to obtain a stay against any action of the regulatory body if it is appropriate and is necessary for a viable proposal. This amendment balances the requirement to have debtor companies in reorganization proceedings comply with all applicable laws and regulations, as their solvent competitors would be expected to do, without unduly limiting the prospects of legitimate reorganization attempts.

CCAA Process and Oversight: Companies filing under the CCAA will be required to publish notice of the CCAA proceeding in a newspaper shortly after the process has been initiated. The notice must include information concerning the application as well as contact information for the creditors. In addition, notice of any hearing must be given to each known creditor if their rights as creditors would reasonably be expected to be affected. Furthermore, the monitor must prepare a list of all known creditors of the company, who have a claim against the company in excess of $1000, and make the list publicly available. In addition, a central registry of applications made under the CCAA will be created at the Office of the Superintendent of Bankruptcy. As well, the Superintendent will have oversight powers with respect to monitors appointed to CCAA cases similar to that which currently exists for bankruptcy trustees under the BIA.

Governance: The judge in a restructuring proceeding is given explicit authority to deal with governance issues to foster the possibility of a successful reorganization. This includes the power to remove and replace directors; the ability to grant a priority charge to indemnify directors and officers against obligations or liabilities that may be incurred; and the authority to provide for the payment of costs for assisting the effective participation of interested parties at the proceeding. Claims relating to the purchase of equity interests in the company do not qualify for voting on the proposal or arrangement.

Trustees, Receivers and Monitors: The amendments clarify that trustees and receivers are not personally liable for liabilities outstanding prior to their appointment. Currently, trustees and receivers are sometimes unwilling to act in insolvency files where they may be exposed to liability for outstanding obligations of the debtor. The amendments remove this disincentive and will improve the administration of both the BIA and the CCAA. As well, under the CCAA, monitors will be required to be licensed as a bankruptcy trustee. Auditors will generally not be permitted to act as monitors and the duties of the monitor will be better defined. The amendments also clarify the role and responsibilities of interim receivers, and provide that they can operate across Canada. This avoids the requirement to appoint a separate receiver in each province where a debtor may have assets.

UNCITRAL Model Law: The amendments include new provisions to facilitate cooperation with foreign jurisdictions in international insolvency cases based upon the United Nations Commission on International Trade Law (UNCITRAL) Model Law. The Model Law attempts to promote international cooperation in transborder insolvency in three major ways: by authorizing the courts to coordinate and cooperate with each other; by restricting the scope of local bankruptcy proceedings when foreign proceedings have commenced; and by granting local relief to representatives of foreign proceedings. Canada has been active in the development of the provisions contained in the Model Law. Adopting the Model Law will encourage consistent administration of international insolvencies, and provide an effective mechanism to deal with globalization of economic activity and the increase in insolvencies with international dimensions. The UNCITRAL Model Law was recently adopted by the United States.

Other Issues - Bill C-55

Professional Conduct:The professional conduct and discipline provisions applicable to trustees in the BIA will be clarified, notably by prescribing a code of ethics, reinforcing investigatory powers of the Superintendent of Bankruptcy and the application of conservatory measures. Trustees acting as monitors under the CCAA will also be made subject to the supervision of the Superintendent of Bankruptcy.

Technical Changes:Several technical amendments will be made to modernize the law and clarify interpretation of the courts in order to ensure its effective application.

Recommendations for Consumer Insolvency:

Federal Exempt Property:
1. The Bankruptcy and Insolvency Regulations be amended to provide a list of federal exempt property. The debtor should be required to choose, at the time of filing for bankruptcy and in its entirety, either the list of federal exempt property or the list of provincial/territorial exempt property available in his or her locality. The value of the property in the list of federal exempt property should be increased annually in accordance with increases in the cost of living as measured by the Consumer Price
Index. (page 23)

Exemptions for RRSPs and RESPs:
2. The Bankruptcy and Insolvency Act be amended to exempt funds in all Registered Retirement Savings Plans from seizure in bankruptcy, provided that three conditions are met: the Registered Retirement Savings Plan is locked in; contributions made to the Registered Retirement Savings Plan in the one-year period prior to bankruptcy are paid to the trustee for distribution to creditors; and the exempt amount is no greater than a maximum amount to be set by regulation and increased annually in accordance with increases in the cost of living as measured by the Consumer Price Index. (page 29)

3. The Bankruptcy and Insolvency Act be amended to exempt funds in a Registered Education Savings Plan from seizure in bankruptcy, provided that two conditions are met: the Registered Education Savings Plan is locked in; and contributions made to the Registered Education Savings Plan in the one-year period prior to bankruptcy are paid to the trustee for distribution to creditors. (page 32)

Reaffirmation Agreements:
4. The Bankruptcy and Insolvency Act be amended to prohibit reaffirmation by conduct or by express agreement. (page 36)

Summary Administration:
5. The Bankruptcy and Insolvency Act be reviewed in order to eliminate all unnecessary procedural requirements and to provide parties to a bankruptcy with an opportunity - to the extent possible - to choose their level of involvement in accordance with a "by exception rather than by rule" approach. Moreover, the use of electronic communication should be encouraged in order to simplify and expedite the insolvency process. (page 39)

Non-Purchase Money Security Interests in Personal Exempt Property:
6. The Bankruptcy and Insolvency Act be amended to prohibit non-purchase money security interests in property that would otherwise be exempt from seizure in bankruptcy. Property should be defined to include exempted property intended for use or consumption by the debtor or the debtor's family, and should encompass apparel, household furnishings and motor vehicles owned by the debtor. (page 42)

Mandatory Counselling:
7. The Bankruptcy and Insolvency Act be amended to require the completion of mandatory counselling by first-time and second-time bankrupts as a condition of automatic discharge from bankruptcy available after 9 and 21 months respectively. Debtors making a consumer proposal should also undertake mandatory counselling. The nature and timing of mandatory counselling should be examined to ensure its effectiveness. (page 45)

Consumer Liens:
8. The issue of consumer liens continue to be addressed within provincial/territorial consumer protection legislation. (page 47)

Student Loans:
9. The Bankruptcy and Insolvency Act be amended to reduce, to five years following the conclusion of full or part time studies, the length of time prior to permitting the potential discharge of student loan debt. As well, the Act should allow the Court the
discretion to confirm the discharge of all or a portion of student loan debt in a period of time shorter than five years where the debtor can establish that the burden of maintaining the liability for some or all of the student debt creates undue hardship. (page 56)

Discharge from Bankruptcy and the Treatment of Second-Time Bankrupts:
10. The Bankruptcy and Insolvency Act be amended to provide automatic discharge from bankruptcy after 21 months for second-time bankrupts who have completed mandatory counselling. The Superintendent of Bankruptcy, the trustee or any interested party should have the opportunity to oppose the automatic discharge, in
the same way that the discharge of a first-time bankrupt can be opposed, thereby requiring a Court hearing. (page 59)

Contributions of Surplus Income to the Bankrupt's Estate:
11. The Bankruptcy and Insolvency Act be amended to require bankrupts with surplus income to contribute to their estate for a total of 21 months. Trustees should have the discretion to permit a shorter contribution period in cases of undue hardship. Surplus income should continue to be determined in accordance with the directive of the Superintendent of Bankruptcy. The discharge of the debtor should not be delayed merely because of the obligation to continue to contribute for a total of 21 months. In appropriate circumstances, a trustee should be able to seek a summary judgment to require such payments. (page 62)

Voluntary Agreements to Make Post-Discharge Payments:
12. The Bankruptcy and Insolvency Act be amended to allow trustees to enter into voluntary payment agreements with bankrupts who do not have surplus income. Fees payable to the trustee in accordance with such an agreement should not exceed the minimum legal amount established for summary administration bankruptcies. (page 65)

Non-Dischargeable Credit Card Purchases:
13. The matter of purchases by the debtor of luxury or non-essential goods and services shortly prior to filing for bankruptcy continue to be decided either during the course of a discharge hearing or through an accusation of fraud. (page 67)

International Insolvency:
14. The Bankruptcy and Insolvency Act be amended to recognize the effect of a foreign discharge or compromise of debt with respect to an individual, provided certain conditions are met. The conditions should be: the bankrupt foreign resident Canadian has a real and substantial connection with the foreign jurisdiction; the foreign procedure is fair and non-prejudicial to creditors; and the personal exemptions used by the bankrupt foreign resident Canadian in the foreign proceedings are substantially similar to those in Canada. (page 70)

Debt Forgiveness by the Canada Customs and Revenue Agency:
15. The Bankruptcy and Insolvency Act be amended to provide that, for consumer proposals, the year-end date for income tax purposes is the date on which the proposal is filed with the Official Receiver. For commercial proposals, the year-end date should be the earlier of: the date of filing of the notice of intention to file a
proposal; and the date of filing of the proposal with the Official Receiver. Moreover, the Income Tax Act should be amended to ensure that the debt forgiveness provisions in Section 80 of the Act are not applicable to individuals who file proposals under the Bankruptcy and Insolvency Act. (page 73)

Ipso Facto Clauses:
16. The Bankruptcy and Insolvency Act be amended to provide that ipso facto clauses in agreements for basic services are not enforceable with respect to consumer proposals and consumer bankruptcies. (page 75)

Credit Reporting:
17. The Office of the Superintendent of Bankruptcy take a leadership role in convening a meeting among credit granting agencies, credit grantors, provincial/territorial representatives and other relevant parties with a view to negotiating a mutually acceptable credit scoring regime. (page 79)

Inadvertent Discharge of Selected Claims in Proposals:
18. The Bankruptcy and Insolvency Act be amended to ensure that an insolvent debtor will not be released from the debts and liabilities referred to in Section 178 of the Act unless the holder of those debts provides affirmative and informed consent. (page 81)

Bankruptcy and Family Law:
19. The Bankruptcy and Insolvency Act be amended to:

Recommendations for Commercial Insolvency:

Compensation Protection: Wages and Pensions:
20. The Bankruptcy and Insolvency Act be amended to provide that unpaid claims for wages and vacation pay arising as a result of an employer's bankruptcy be payable to an amount not to exceed the lesser of $2,000 or one pay period per employee claim. The funding of these claims should be assured by creating a super
priority over secured claims to inventory and accounts receivable. The secured creditor or creditors should be able to assume the rights of the employees against the directors. (page 96)21. The Bankruptcy and Insolvency Act not be amended to alter the treatment of pension claims. (page 99)

Debtor-in-Possession Financing:
22. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to permit Debtor-in-Possession financing. The Court should be given the jurisdiction to provide that the lien by the Debtor-in-Possession lender can
rank prior to such other existing security interests as it may specify. As well, any secured creditor affected by such priority should be given notice of the Court hearing intended to authorize the creation of security ranking prior to its security. In deciding whether to authorize a Debtor-in-Possession loan, the Court should be required to consider the seven factors outlined by the Joint Task Force on Business Insolvency Law Reform in its March 2002 report. (page 103)

The Rights of Unpaid Suppliers:
23. The Bankruptcy and Insolvency Act be amended to repeal, subject to the noted exception, the provisions that provide protection for unpaid suppliers of goods to bankrupt companies. The provisions that protect the rights of farmers, fishers and
aquaculturalists as suppliers should be retained. (page 111)

Cross-Border Insolvencies:
24. The Bankruptcy and Insolvency Act be amended to incorporate the United Nations Commission on International Trade Law Model Law on Cross-Border Insolvency. Consideration should be given to adding a reciprocity provision
and provisions that would assure the creation of a creditors' committee, consisting of Canadian creditors, to protect their interests. The reasonable expenses of the members of this committee should be paid by the foreign debtor, if considered
appropriate by the Canadian Court. (page 117)

Director Liability:
25. The Bankruptcy and Insolvency Act be amended to include a generally applicable due diligence defence against personal liability for directors. (page 120)

Transfers at Undervalue and Preferences:
26. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to ensure consistent and simplified rules for challenging fraudulent preferences, conveyances at undervalue and other reviewable transactions. A
trustee/monitor under a proposal should have the same powers as a trustee in bankruptcy. The Acts should provide a standard for challenging transactions that may affect the value of creditors' realizable claims. (page 123)

Bankruptcies by Securities Firms:
27. The Bankruptcy and Insolvency Act be amended to clarify:

Financial Market Issues:
28. The Companies' Creditors Arrangement Act be amended to give the Court the right to exempt securities regulators from Court ordered stays of proceedings in instances where two conditions are met:

Insolvency Practitioner Liability as a Successor Employer:
29. The Bankruptcy and Insolvency Act be amended to separate clearly the personal liability of an insolvency practitioner from the liability of the debtors' estate. (page 130)

Executory Contracts:
30. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to permit disclaimer of executory contracts in existence on the date of commencement of proceedings under the Acts. This disclaimer should apply to all executory contracts, provided a number of conditions are met. In
particular: the debtor should be obliged to establish inability or serious hardship in restructuring the enterprise without the disclaimer; the co-contracting party should be permitted to file a claim in damages in the restructuring; and, where a collective
agreement is being disclaimed, the debtor should also have the burden of establishing that post-filing negotiations have been carried on, in good faith, for relief of too onerous aspects of the collective agreement and should establish in Court that the disclaimer is necessary in order to allow for a viable restructuring.
(page 137)31. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to permit trustees, Court-appointed receivers and monitors, if authorized by judgment, to assign executory contracts when appropriate, in connection with going concern transactions and on a liquidation basis, provided
that two conditions are met:

Workers' Compensation Board Premiums:
32. The Bankruptcy and Insolvency Act not be amended to alter the treatment of Workers' Compensation Board premiums. (page 143)

Interim Receivers:
33. The Bankruptcy and Insolvency Act be amended to clarify the role of the interim receiver, and the duration and meaning of the term "interim." As well, the definition of "receiver" should be amended to include interim receivers when they operate in a
manner similar to Court-appointed receivers. (page 145)

Going Concern and Asset Sales:
34. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to permit the debtor, subject to prior approval of the Court, to sell part or all of its assets out of the ordinary course of business, during reorganization and without complying with bulk sales legislation. Similarly, the debtor should be permitted to sell all or substantially all of its assets on a going concern basis. On an application for permission to sell, the Court should take into consideration whether the sales process was conducted in a fair and reasonable manner and whether major creditors were given reasonable notice, in the circumstances, of the proposed sale and had input into the decision to sell. No such sale to controlling shareholders, directors, officers or senior management of the debtor having a
significant financial interest in the purchaser or in the sales transaction should be permitted, other than in exceptional circumstances. (page 148)

Governance:
35. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to permit the Court to replace some or all of the debtor's directors during proposals or reorganizations if the governance structure is impairing the
process of developing and implementing a going concern solution. Moreover, prior to appointment, a trustee/monitor should disclose, to the Court, any business and legal relationships it has or has had with the debtor. The auditor or recent former auditor of the debtor should not be permitted to be the monitor. Furthermore, the monitor should not be permitted, in the event of a failed restructuring, to become the trustee or a receiver for a secured creditor. (page 150)

Plan Approvals:
36. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to require a trustee/monitor to provide, in connection with a request for Court approval of a reorganization plan, an opinion that, as a group, each of secured creditors and unsecured creditors are likely to receive no less under the plan than it would receive in a liquidation. Moreover, Section 54(3) of the Bankruptcy and Insolvency Act regarding related parties should be incorporated in the Companies' Creditors Arrangement Act. Finally, the Acts should be amended to provide the Court approving a reorganization plan with the power to approve a restructuring of the equity of the debtor, with or without shareholder approval. (page 152)

Priorities:
37. The Companies' Creditors Arrangement Act be amended to incorporate the priority rules in the Bankruptcy and Insolvency Act. (page 153)

Insolvency of Other Vehicles:
38. The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act be amended to provide for the liquidation or the reorganization of a business trust. (page 155)

Income Tax:
39. The Income Tax Act be amended to provide that distress preferred share treatment for tax purposes be afforded to qualifying debt, for a specified period of time, by filing a notice of election with the Canada Customs and Revenue Agency.
Moreover, on the consummation of a plan of arrangement, a debtor should be able to elect to use fresh start accounting for tax purposes, with tax obligations relating to the period prior to the date of bankruptcy addressed as pre-filing claims. (page 157)

Subordination of Equity Claims:
40. The Bankruptcy and Insolvency Act be amended to provide that the claim of a seller or purchaser of equity securities, seeking damages or rescission in connection with the transaction, be subordinated to the claims of ordinary creditors. Moreover, these claims should not participate in the proceeds of a restructuring or
bankruptcy until other creditors of the debtor have been paid in full. (page 159)

Administrative Tribunals and Stays of Proceedings:
41. The Companies' Creditors Arrangement Act be amended to exempt, from the application of stays of proceedings and subject to Court discretion, all proceedings brought before non-judicial administrative tribunals. The exemption should be granted where two conditions are met: the exemption is needed for the protection
of third parties; and the exemption does not subject directors or senior management to undue pressure and loss of time. (page 162)

Debts Not Released by an Order of Discharge:
53. The Bankruptcy and Insolvency Act be amended to require that fraud be proven in order for a debt to survive discharge from bankruptcy. Moreover, the provisions should apply to both debts for property and debts for services acquired through false pretences or fraudulent misrepresentation. (page 198)