Corporate Division 1

Corporate Division 1 Proposals

You have options.

What Is a Corporate (Division 1) Proposal? Avoid bankruptcy and get a fresh start.

If your business is struggling with debt, bankruptcy is not your only option.
A Corporate Proposal, also known as a Division 1 Proposal, is a formal debt restructuring solution under the Bankruptcy and Insolvency Act of Canada. It allows a corporation to reduce or reorganize debt, negotiate with creditors, and get back on stable financial ground — without filing for bankruptcy.

Many businesses face financial pressure for reasons beyond their control:

Was your company impacted by COVID-19 or other economic disruptions?
Have you been reassessed by the Canada Revenue Agency (CRA) and now owe HST or source deductions?
Has your industry changed due to inflation, rising costs, or a market downturn?

Whatever the cause, ongoing financial strain won’t fix itself. When cash flow becomes tight and creditor pressure increases, it’s time to act.

At RUSSO, we specialize in corporate debt restructuring and Division 1 Proposals in Canada. Our Licensed Insolvency Trustees will work with you to prepare detailed cash flow projections, assess all available options, and design a practical plan to help you protect your business, preserve jobs, and move forward with confidence.

We’re known for fast, personalized service and straightforward advice that puts your goals first. Stop the stress. Regain control of your business today. You have options.— RUSSO CAN HELP.

The benefits are...

Avoid bankruptcy
Protect your company from seizure
Maintain commercial activities
Negotiate with creditors
Get a fresh start

We offer free, no-obligation, consultations with one of our debt specialists. Together, we’ll explore your debt relief options and develop a plan to regain your personal or corporate financial health.

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Frequently Asked Questions Corporate (Division 1) Proposal

How does a corporate proposal work?

A corporate proposal begins with a preliminary meeting and a detailed analysis of your company’s financial situation. Once the proposal documents are prepared and filed, creditors are notified and asked to attend a meeting within 21 days. At this meeting, creditors vote on whether to accept the proposal.

For the proposal to be approved, a majority of creditors (50% +1) must vote in favor, and those in favor must also represent at least two-thirds of the total debt value. If these conditions aren’t met, the proposal is rejected.

What happens if the proposal is rejected?

If the terms of your proposal cannot be met, even temporarily, there may be options to miss a payment or two with permission. Ultimately, a rejected proposal usually means one of two things: the proposal needs to be revised, or the business may be financially unviable, and other solutions should be explored.

How can I maximize the chances of approval?

To gain approval, your proposal must offer creditors a better return than they would receive in a bankruptcy. At RUSSO, we help craft a strong, well-structured proposal to maximize your chances of acceptance. Once a proposal is accepted, your Licensed Insolvency Trustee (LIT) files the necessary application with the court, while you continue to operate your business in accordance with the proposal terms.

Is my business eligible to file a corporate proposal?

Your business may be eligible if it is insolvent or financially unviable. Eligibility improves if your company could survive with partial debt forgiveness or a temporary pause on debt repayments, and if you are motivated to take the necessary steps to save your business.

RUSSO CAN HELP.

Avoid bankruptcy and get a fresh start- "Testimonial here- one line"