A sale and investment solicitation process, or SISP, is the court-supervised process a Canadian company in CCAA or BIA proceedings runs to market itself, or fresh investment into it, under rules a judge has pre-approved — so any buyer or investor knows in advance that a sale closing through the process will hold up in court.
“SISP” is not a defined term in either statute — it is Canadian insolvency-practice vocabulary for what happens under the court's general sale-approval power. CCAA s. 36(1) provides that a debtor company under CCAA protection “may not sell or otherwise dispose of assets outside the ordinary course of business unless authorized to do so by a court,” and the court can grant that authorization “despite any requirement for shareholder approval” under other law.
A court checks six things before approving the sale a SISP produces, listed in s. 36(3): whether the process itself was reasonable; whether the monitor approved it; whether the monitor reported the sale “would be more beneficial to the creditors than a sale or disposition under a bankruptcy”; how much creditor consultation happened; the effects on creditors and other stakeholders; and “whether the consideration to be received … is reasonable and fair, taking into account their market value.” Where the buyer is a related party, s. 36(4)–(5) adds a further bar: the company must show “good faith efforts were made to sell … to persons who are not related” and that the related buyer's price is “superior” to any other offer the process turned up.
The payoff for a buyer is what it doesn't inherit. Under s. 36(6), the court can authorize the sale “free and clear of any security, charge or other restriction,” with the security simply attaching to the sale proceeds instead — the opposite of a share purchase agreement, where the buyer takes on every liability the corporation carried.
A distressed manufacturer files for CCAA protection. The monitor designs a SISP with a fixed bid deadline and a stalking horse agreement already signed with one interested buyer to set a floor. No higher bid emerges during the solicitation window, and the monitor reports to the court, as s. 36(3) requires, that closing with the stalking horse buyer would leave creditors better off than a straight bankruptcy liquidation. The court approves the sale free and clear of the company's existing secured debt under s. 36(6), with that security interest attaching to the proceeds instead of following the assets to the buyer.
See also: Stalking horse bid · Share purchase agreement · Plan of arrangement.
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