Insolvency and bankruptcy of a company
In the event of a company’s bankruptcy or insolvency, amounts may be owed to the company’s workers. If they believe that they are in this situation, they can take steps to claim the sums of money owed to them:
- How to claim sums owed in the event of an employer’s bankruptcy if the sums are related to wages or certain indemnities
- How to claim wage adjustments in the event of a company’s bankruptcy or insolvency if the sums are related to pay equity work
When a change occurs in their company, such as a bankruptcy, the employer must report the change to the CNESST (in French only).
Be considered a creditor
A worker to whom sums of money are owed is considered a creditor of the employer who has declared bankruptcy. The worker may have to complete a written proof of claim. This will be sent to them by the trustee in charge of the file.
The trustee’s role
When a company goes bankrupt or becomes insolvent, the employer must deal with a trustee who is responsible for liquidating the company’s assets or proposing a financial reorganization. If the company’s balance sheet indicates that a sum of money is owed to a worker, the trustee is responsible for sending the worker:
- a notice of bankruptcy
- the proof of claim form and the explanations needed to complete it
- Proof of claim
A proof of claim is a written statement used to claim sums of money as a creditor. The proof of claim must be accompanied by supporting documents. It is not mandatory in all situations. You can ask the trustee in charge of the file whether or not it is mandatory.
Why file a proof of claim?
By filing a proof of claim, the worker may be entitled to vote at the creditors’ meeting during:
- insolvency proceedings, which will allow them to voice their opinion on the proposal the employer will make to allow the company to avoid bankruptcy
- bankruptcy proceedings, which will allow them to voice their opinion on the employer’s proposal for redistribution to creditors
How do I find out who the trustee in charge of an employer’s file is?
You can consult the Bureau du surintendant des faillites website to find out who the trustee in charge of your employer’s file is. A fee may apply.
Some employers post the trustee’s name and contact information at the entrance of their establishment.