Understanding BIA and CCAA searches in Canada

Bankruptcy and insolvency searches are a core part of due diligence, but like any registry search, they only reveal what the underlying database is built to show. Understanding the scope, timing, and search logic of the OSB records is important to interpreting results correctly and avoiding a false sense of comfort on closing.

What does the OSB records database contain?

The database does not go back indefinitely, and it does not cover every type of proceeding from the same date. The OSB records database contains basic debtor information of all bankruptcies and proposals registered in Canada since 1978, all receiverships registered with the OSB since January 1993, all petitions recorded at the OSB, and all companies that have been granted protection under the CCAA since September 18, 2009.

These start dates are a practical limitation. A proceeding that predates the relevant threshold will not appear in the results. Although it is infrequent that a proceeding predating the OSB records database is still relevant or active, it is worth keeping this in mind when dealing with businesses that began in September 2009 or earlier.

The currency date is not the current date

A common misunderstanding is that BIA and CCAA searches reflect the exact moment they are run. They do not. The OSB records carry a currency date, and that date is typically 1 to 3 business days in arrears from the current date.

In practice, this means a filing made very recently may not yet be reflected in the results. For most files this small lag is immaterial, but on a deal where a debtor's financial position is deteriorating, there is a big difference between today and three days ago. This is one more reason that timing is critical, and why searches run early in a file should be updated periodically and especially before the closing.

Why a date of birth matters when searching individuals

When searching an individual, the name alone is often not enough to isolate the right person. Common names can return a long list of unrelated results, and the OSB search allows you to filter by a specific date of birth to narrow the results to the relevant individual.

Adding a date of birth is especially valuable for common names, where a name-only search may surface multiple different people across Canada who share the same or similar names. Keep in mind that, although rare, some records might have a missing or incomplete date of birth, so it’s generally advisable to also run the broad name-only search for certainty.

If the individual has name or spelling variations, its also recommended to run additional BIA searches on those names.

CCAA does not apply to individuals

The CCAA is a corporate restructuring statute. It applies to insolvent corporations that owe creditors at least $5 million, not to individuals. A CCAA search is therefore relevant to businesses only, and there is no CCAA analysis to run on an individual debtor.

This is why the scope of your search should follow the nature of the subject. For an individual, the BIA records are what matter. For a business, both BIA and CCAA regimes can be relevant, which leads to the next point.

For businesses, run both BIA and CCAA

An insolvent business can proceed under either regime, so it is advisable to run both a BIA and a CCAA search on the business. A BIA search covers bankruptcies, proposals, receiverships, and petitions within the database's scope, while a CCAA search covers companies granted protection under the CCAA since September 18, 2009.

Running only one of the two on a business leaves a gap. A larger insolvent company may have proceeded under the CCAA rather than the BIA, so a BIA-only search on that business could come back clean while a significant restructuring sits in the CCAA records.

Why this matters for M&A and financing transactions

On M&A and financing transactions, bankruptcy and insolvency searches are critical, and the value of a search depends on running it against the right parties. It is not enough to search only the target business. Depending on the structure of the deal, it can be important to search the business together with its key stakeholders, including shareholders, officers, and directors.

The insolvency history of the people behind a business can be as relevant to a transaction as the business’s own records. As with all searches, the correct legal names and, for individuals, dates of birth, should be verified before searching, since an incomplete or misspelled name can cause a relevant record to be missed. For more on how naming, scope, and timing can undermine otherwise clean search packages, see our article on where search due diligence can go wrong on M&A and financing deals.

Regy's approach to BIA and CCAA searches

When running BIA and CCAA searches, it is worth keeping the OSB database's structure in mind. The records have defined start dates, the currency date sits a few business days behind the present, and the quality of an individual search depends heavily on the name and date of birth used.

Running searches on name or spelling variations is key for comprehensive due diligence.

For businesses, running both BIA and CCAA searches is the ideal approach, including searches on any shareholders, officers, directors and other key stakeholders as needed.

Most importantly, Regy recommends updating BIA and CCAA searches periodically throughout the lifetime of the matter, and especially prior to any closing.

Caveat: This is a general overview of how BIA and CCAA records searches work through the OSB database. It is not a complete description of the OSB search system, the BIA or CCAA statutes, or the procedures of any particular insolvency proceeding, each of which has its own details.