| There are mainly two chapters under which a | | | | Program, WEPP. |
| bankrupt company can file a financial distress | | | | The WEPP, which will be under the ministry of |
| case. These are chapter 7, also known as the | | | | labor and housing, was formed to compensate |
| liquidation chapter or chapter 11 which allows the | | | | workers who have not received their monthly |
| company in debt to pay as they continue | | | | payments and vacation pay six months prior to |
| operating. When a corporate insolvency petition | | | | the filing. This bill intends to protect workers under |
| has been filed under chapter 11, the court | | | | their umbrella in case their company decides to |
| appoints an official who takes up the responsibility | | | | declare insolvency. This bill also seeks to protect |
| of making financial decisions in the company while | | | | employees retirement benefits and any |
| the managers continue with the day-to-day | | | | retirement plans that the employee could have in |
| running of the company. | | | | case the company became insolvent. Any such |
| Corporate bankruptcy filed under chapter 11, | | | | retirement plans will be given priority above the |
| gives the company a chance to reorganize as | | | | secured creditors. |
| they pay their pending debts. There are proposed | | | | Corporate bankruptcy will also protect the |
| changes in the company financial distress petition. | | | | contracts of the employees. The debtor company |
| These are under the Bill C-55. Claims for unpaid | | | | will have to serve the court with an order that, in |
| wages and vacation pay will be given first priority. | | | | order to restructure they might need to cut |
| Presently secured creditors are given first priority, | | | | down the number of employees. The company |
| followed by unsecured creditors. This change will | | | | has to convince the court that this step will help |
| be enacted under the Wage Earner Protection | | | | them come out of debt. |