Public post-secondary educational institutions excluded from 'corporation' definition in bankruptcy law

Plain-language summary · AI-assisted

The definition of 'corporation' in the Bankruptcy and Insolvency Act has been updated to explicitly exclude 'prescribed public post-secondary educational institutions.' This means those institutions, once designated by regulation, will sit outside the Act's general corporate insolvency framework in the same way banks, insurance companies, trust companies, and loan companies already do. The change applies only to insolvency proceedings commenced after it came into force — earlier proceedings are unaffected. Administrators, lenders, and creditors dealing with public colleges and universities should be aware that their exposure and remedies in any future insolvency proceeding involving such institutions may be governed differently than for ordinary corporations. The specific institutions covered will be identified in regulations yet to be prescribed.

Who this affects
public post-secondary educational institutions · licensed insolvency trustees · creditors of post-secondary institutions · lenders to colleges and universities · insolvency counsel