TORONTO (Sept. 6) — Rubber recycler NRI Industries Inc. has begun restructuring proceedings before the Ontario Superior Court of Justice under the Companies´ Creditors´ Arrangement Act, according to an NRI press release.
Al Power, NRI President and CEO, blamed the company´s financial straits on soft demand from the automotive sector, low-cost overseas competition, higher input costs and the strengthening of the Canadian dollar against the U.S. dollar.
The company has secured funding from its lender to run the business during restructuring, Power added, and it is working with its customers to assure normal operations during the proceedings.
The Companies´ Creditors´ Arrangement Act is the Canadian version of Chapter 11 reorganization, but differs from Chapter 11 in that it offers little statutory guidance on the technical requirements of a corporate reorganization plan. Also, unlike Chapter 11, it does not explicitly provide for "cramdown," or the right of a bankruptcy court to enforce a reorganization plan over the objections of some of a company´s creditors.
CCAA proceedings usually are shorter than Chapter 11 proceedings, normally lasting only about six months, according to the Web site of Fasken Martineau, a Canadian business law firm.