Brivia's CCAA Lifeline: A Contractor's Guide to the New Rules of the Game

The rules just changed. For contractors working on the Phillips Square and Mansfield projects, the game is now governed by the federal Companies' Creditors Arrangement Act (CCAA). The court has placed these specific developments into proceedings under this law, which applies to insolvent corporations with more than $5 million in debt. This isn't a bankruptcy filing; it's a court-supervised lifeline designed to keep projects alive and maximize returns for everyone involved.

The absolute priority is keeping the work moving. To do that, the secured lenders are providing interim financing, known as DIP (Debtor-in-Possession) financing. This liquidity is critical-it gets paid before virtually every other claim in the system. It's the oxygen keeping the projects breathing during the restructuring.

The process itself is a legal and financial reveal. Under CCAA rules, the company must file a projected cash-flow statement and its financials. The fact that these documents are now part of the public record is a stark signal. They lay bare the severe distress that led to this point, showing the cash crunch that forced the restructuring. Contractors need to read this data-it's the blueprint for the project's viability and the timeline for payments.

The bottom line for contractors: you're now operating under a new set of rules. Work continues, but all financial flows are subject to the court-appointed monitor and the strict hierarchy of claims, with DIP financing at the top. This is the new reality.

The Contractor's New Reality: Signal vs. Noise

The CCAA isn't just a legal formality; it's a direct hit to your cash flow and risk profile. The court-appointed monitor, Raymond Chabot, is now your new gatekeeper. And the recent Earth Boring case just dropped a major red flag: calls on performance bonds can be indefinitely prohibited without leave of the Court. That's a game-changer. Your surety backstop is suddenly on ice, leaving you exposed if the main contractor can't pay.

The hierarchy of claims is now crystal clear. Forget any hope of being paid first. The order is absolute: DIP lenders get paid before virtually every other claim. Then come secured creditors. Contractors? You're almost certainly in the unsecured creditor pool, meaning you're last in line when assets are liquidated. This is a structural disadvantage that wasn't there before the restructuring.

The Monitor's role adds another layer of bureaucracy. Their job is to notify creditors of meetings and tabulate votes, and to report on major events. While this oversight is meant to ensure fairness, it means every payment dispute now has to navigate a court-supervised process. That's slower, more expensive, and introduces a new variable into your cash flow planning.

The bottom line: project completion is still the goal, but the path is fraught with new risks. The bond freeze is a direct operational hit. The creditor ranking is a financial reality check. And the Monitor's involvement turns every claim into a procedural minefield. This is the new signal: the system is designed to protect the lender and the project, not the subcontractor.

Catalysts & Watchlist: What Moves the Needle

The restructuring clock is ticking. For contractors, the next 30 days are critical. This isn't just legal paperwork; it's the first real test of whether the project can survive. Here's your action plan.

1. The Monitor's First Report & Plan Submission (Deadline: ~Feb 7, 2026). The court-appointed Monitor, Raymond Chabot, has 30 days from the initial order to file its first report and the full restructuring plan. This is your alpha leak. The report will detail the company's financial state, operational health, and the viability of the proposed plan. If it shows the cash flow projections are shaky or the plan is vague, that's a major red flag. Watch for any language suggesting the project is at risk of delay or cancellation. This is the first hard data point on the project's survival odds.

2. Creditor Objections: The Deal-Killer Signal. The plan goes to a vote. Any major creditor-especially the secured lenders or the DIP financing group-can object. Their objections are powerful. If they block the plan, the restructuring collapses, and the project likely faces liquidation. Monitor the list of creditors who file objections. A single powerful objection from a key lender could derail everything. This is the single biggest catalyst for failure.

3. Surety Bond Calls & Subcontractor Claims: Real-Time Health Check. The Earth Boring case just froze the surety backstop. Watch for any attempts to call bonds or file subcontractor claims. If the Monitor or the court blocks these calls, it confirms the bond freeze is active and contractors are exposed. This is a direct indicator of project health and your leverage. If claims are allowed, it shows some liquidity is still flowing. If they're blocked, it's a sign of deeper distress and a major red flag for your cash flow.

The Bottom Line: Your watchlist is clear. The Monitor's report is the first signal. Creditor objections are the deal-breaker. And the status of bond calls is the real-time pulse check. Ignore these, and you're flying blind. Act on them, and you can adjust your position before the next payment cycle.