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Data room for CCAA restructuring

Under the Companies’ Creditors Arrangement Act, a debtor with over C$5 million in claims restructures under court protection with a monitor watching. Most CCAA cases include a sale and investment solicitation process (SISP), and the data room is where bidders, lenders and the monitor work. It needs strong permissions, Q&A and logs the court can rely on.

C$5 millionMinimum total claims for a CCAA filing
10 daysMaximum stay under a CCAA initial order

How it works in Canada

The CCAA is used by larger Canadian companies: retailers, mining companies, energy producers, real estate developers and cannabis producers have all filed in recent years. The initial order gives a stay of up to 10 days, then the court can extend it. A monitor, usually a large accounting firm’s restructuring group, reports to the court on the debtor’s affairs and the sale process.

A SISP is usually approved early. It sets phases: a teaser and NDA, a first round with non-binding letters of intent, then a second round with binding bids and a deeper room. Many SISPs start with a stalking horse bid, often from a lender, that sets a floor price and gets a break fee if outbid. Bidders compete in an auction if more than one qualified bid arrives.

The court approves the winning bid under section 36 of the CCAA, often granting a reverse vesting order in recent years. Creditors, unions and other stakeholders can object, so the monitor’s report describes how many parties signed NDAs, accessed the room and bid. That report draws directly on the room’s records. Large cases attract US and European bidders as well.

Best data rooms for ccaa restructuring

Our five criteria, re-weighted for this use case, plus a small bonus for providers built around it.

  1. 1 Ellty ~C$211/mo
    9.3 Visit Ellty
  2. 2 Datasite Quote
    9.0
  3. 3 iDeals Quote
    8.8
  4. 4 Ansarada Quote
    8.8
  5. 5 Firmex Quote
    8.6
  6. 6 Drooms Quote
    8.5
  7. 7 Intralinks Quote
    8.5
  8. 8 SmartRoom Quote
    8.4
  9. 9 CapLinked ~C$423/mo
    8.1
  10. 10 DealRoom Quote
    8.1
Privacy 24%Workflow 27%Control 22%Usability 15%Cost 12%

What goes in the data room

CCAA restructuring: index
  1. 01
    01 Court filings

    Initial and amended and restated orders, SISP approval order and monitor’s reports.

  2. 02
    02 SISP documents

    Teaser, process letter, NDA, bid procedures and stalking horse agreement.

  3. 03
    03 Financial information

    Historical statements, monthly results and the court-filed cash flow forecasts.

  4. 04
    04 Business overview

    Management presentation, operations and site summaries.

  5. 05
    05 Assets and properties

    Real property, equipment, inventory, licences and permits by location.

  6. 06
    06 Contracts

    Key contracts with notes on assignment and the court’s power to assign under s. 11.3.

  7. 07
    07 Employees and pensions

    Anonymized census, collective agreements and pension plan funding status.

  8. 08
    08 Environmental and regulatory

    Environmental reports, regulator orders and licence transfer requirements.

  9. 09
    09 Phase 2 confidential

    Deeper diligence opened only to qualified phase 2 bidders.

  10. 10
    10 Bids and auction (monitor only)

    LOIs, binding bids and auction records, visible only to the monitor and counsel.

  11. 11
    11 Lender and DIP information

    Interim financing terms and lender reporting, restricted to the lender group.

Canadian rules that apply

Companies’ Creditors Arrangement Act

The CCAA applies to debtor companies with claims over C$5 million. The initial order stay is limited to 10 days, with relief limited to what is reasonably necessary in that period. Extensions require the debtor to show it is acting in good faith and with due diligence.

Court approval of sales, s. 36

Sales outside the ordinary course need court approval. The court considers whether the process was reasonable, whether the monitor approved it and filed a report, creditor consultation, and whether the price is fair given market value.

Monitor’s duties

The monitor is court-appointed and must report on the debtor’s business, cash flow and any sale process. It often runs the SISP and the data room, and its reports to the court rely on records of NDAs, access and bids.

Features to insist on

Data roomQ&A moduleActivity logDynamic watermarksBulk upload2-step login
ElltyYesYesYesYesYes
DatasiteYesYesYesYesYes
iDealsYesYesYesYesYes
AnsaradaYesYesYesYesYes
FirmexYesYesYesYesYes
DroomsYesYesYesYesYes
IntralinksYesYesYesYesYes
SmartRoomYesYesYesYesYes
  • Q&A module. Bidders post questions inside the room; counsel or the CFO drafts the reply, someone approves it, and every exchange stays on file.
  • Activity log. Per-user history of opens, prints and downloads with timestamps, which you can export for the closing binder.
  • Dynamic watermarks. The reader's identity and the date are printed across every page, which discourages screenshots and identifies the source of a leak.
  • Bulk upload. Upload an entire set of nested folders at once, with the index numbers kept as they were.
  • 2-step login. Logins need a one-time code or authenticator approval on top of the password.

How to set it up

  1. 1
    Build the room before filing

    Restructuring teams often prepare the room before the initial application so the SISP can start soon after the order. Load the core financials, business overview and asset lists in advance.

  2. 2
    Set access by SISP phase

    Create phase 1 and phase 2 groups. Phase 1 bidders see summary material; qualified phase 2 bidders get the deeper folders. Moving a bidder between groups should be one action with a logged date.

  3. 3
    Treat the stalking horse fairly

    The stalking horse bidder should get the same information as other bidders after the SISP launches. Use the room to show the court that no bidder had an information advantage. Log every document added after its agreement was signed.

  4. 4
    Manage Q&A centrally

    Let the monitor or its financial adviser approve all answers before release. Share answers of general interest with every bidder in the same phase so the process stays even. Answer quickly.

  5. 5
    Restrict lender and creditor material

    DIP lenders and the secured lender group may need cash flow and reporting data, but not bidders’ identities or bids. Keep separate groups with clear limits. Confirm each lender’s role before granting access.

  6. 6
    Feed the monitor’s report

    Export NDA counts, access logs and Q&A volume for the monitor’s report supporting the sale approval motion. Keep the room open until the approval and vesting order is granted and any appeal period has passed.

Common mistakes

  • Giving the stalking horse bidder earlier or wider access than competing bidders.
  • Letting a lender who may credit bid see other bids.
  • Opening the room weeks after the SISP order, which shortens the market test.
  • Closing the room before the sale approval and any appeal are resolved.

FAQ

Who runs the data room in a CCAA case?

Usually the monitor or the debtor’s financial adviser, under the SISP approved by the court. The debtor’s management uploads material, but the monitor controls access and approves answers so the court can rely on the process being fair. The monitor’s report later cites the room’s records.

What is a stalking horse bid?

A stalking horse bid is an early binding offer, often from a lender or strategic buyer, that sets a minimum price for the SISP and gives other bidders a template agreement. In return it may receive a break fee and expense reimbursement if a better bid wins. The court approves these protections at the outset. Bidders see them in the room.

What is a reverse vesting order?

A reverse vesting order moves unwanted liabilities out of the debtor company into a new entity, so the buyer acquires the shares of a cleaned-up company. Canadian courts have granted them in many CCAA cases, especially where licences or permits are hard to transfer, but they require careful justification.