Regarding a corporation that had submitted a proposal under the Bankruptcy and Insolvency Act ("BIA") that was accepted by the creditors, and homologated by the Superior Court, with each creditor being paid according to the terms of the proposal, CRA stated:
Section 2 of the BIA specifically states in the definition of "insolvent person" that such a person is not bankrupt. Accordingly … Opco is not a bankrupt corporation for the purposes of subsection 128(1).
CRA went on to note that it had appealed the Marchessault Tax Court decision (subsequently reversed by Marchessault (FCA).