Author - Chantal Mercier-Ouellette

January 2017

Priority claims and corporate assets

Priority claims and corporate assets

Priority claims and corporate assets When a corporation files for bankruptcy, there can be different classes of creditors making claims against the assets of the bankrupt company. Who has priority on these assets? The following are examples of the usual types of creditors involved in a bankruptcy process: Secured creditor This is a creditor who holds a mortgage, pledge, charge or lien on or against some or all of the assets or property of the debtor as guarantee of payment. To qualify for an operating loan with a lending institution, a company may have signed a general security agreement, commonly referred to as a GSA in Ontario, or a Movable Hypothec on a Universality of Movable Assets in Quebec. This means that this creditor [...]