Division 1 Proposal Canada

A Division I Proposal is an agreement between a business and its creditors to restructure its debt. If the creditors agree to the terms of the proposal and it is approved by the Court, the Division I Proposal will become legally binding.

When a business is viable but financially unstable, restructuring its debt under a Division I Proposal could:

  • save the business
  • allow the business owner(s) to retain ownership in the company
  • provide a strategy for dealing with CRA obligations
  • retain jobs
  • maximize creditors returns
  • improve relationships with secured creditors
  • provide an ongoing source of business for existing and new suppliers