Under the Companies’ Creditors Arrangement Act (CCAA), it’s not just debtor-in-possession (DIP) financing that is the challenge in filing for creditor protection but also exit financing, says Alec Zimmerman, a partner specializing in insolvency and restructuring and financial services in Borden Ladner Gervais LLP’s Toronto office.

With exit financing, which is required for companies to 'successfully transition out of insolvency proceedings and get on with life', an issue in the midst of the credit crisis, companies facing a bleak economic future are clever to act quickly and early.

In today’s environment, Zimmerman says, clients should be examining all options. 'Once you put a company into insolvency proceedings, the outcome is never assured.'