By Divi Dev, restructuring lawyer and founder of Divi Distressed Investments and Dividend Distressed Assets Marketplace.

At any given time, distressed assets are being marketed across Canada through receiverships, Sale and Investment Solicitation Processes (SISPs), proposal proceedings, bankruptcies, and other insolvency processes. Yet there is no single platform where prospective purchasers can efficiently identify and assess these opportunities across Canada.

Instead, opportunities are dispersed across hundreds of trustees, receiver, monitor, broker, and advisory firm websites. For a system whose guiding objective is value maximization, this raises an important question: are the right buyers seeing the right opportunities?

In every insolvency proceeding, marketing is where restructuring law intersects with capital markets. A receiver, monitor, or trustee may successfully preserve value, stabilize operations, and obtain the necessary court approvals, yet the ultimate recovery often depends on the efficiency with which the asset is exposed to the market.

The Canadian insolvency framework has long emphasized transparency, fairness, and broad market exposure. The principles articulated in Royal Bank v. Soundair Corp. (Soundair) remain foundational to court-supervised realization processes. Insolvency professionals are expected to obtain the best price reasonably available in the circumstances through a process that is fair, commercially reasonable, and defensible.

As restructuring activity continues across sectors ranging from real estate and construction to retail, manufacturing, hospitality, and transportation, there is an opportunity to examine whether the market for distressed assets is as efficient as the realization processes governing their sale.

The Discovery Gap

Most distressed sale opportunities arising through insolvency proceedings are ultimately marketed through the websites of Licensed Insolvency Trustees, receivers, industry publications, monitors, and professional advisory firms. While these websites serve an important public notice function and satisfy transparency objectives, they also contribute to a fragmented information environment.

Insolvency professionals routinely undertake extensive marketing efforts and frequently achieve strong outcomes for stakeholders. The issue is not the quality of those efforts, but the fragmented structure through which opportunities are discovered

Canada's insolvency ecosystem consists of hundreds of firms administering thousands of active files at any given time. A prospective purchaser seeking acquisition opportunities may be required to search numerous trustee and receiver websites, industry publications, and professional networks simply to identify potentially relevant opportunities.

For strategic acquirers, this presents a particular challenge. A purchaser interested in acquiring a distressed manufacturing operation, restaurant chain, transportation business, construction company, or commercial real estate portfolio has no practical means of efficiently searching the entire Canadian market.

As a result, highly qualified purchasers may never become aware of opportunities that align directly with their existing operations.

Consider a transportation company in Alberta seeking fleet expansion, a restaurant operator in British Columbia pursuing growth through acquisition, or a real estate investor searching for distressed commercial assets. Each may be willing to pay a premium for an opportunity that complements its existing operations. Yet unless these buyers happen to monitor the relevant insolvency professional's website or receive notice through their network, they may never learn that the opportunity exists.

Table 1: The Value Maximization Loss
Fragmented Market Access	Unified Market Exposure
Hard for outside buyers to find opportunities. Relies too heavily on local industry networks. Limited bidding competition. Higher risk of lower recovery for the creditors.	Near-zero effort for buyers. Reaches non-traditional and out-of-province strategics. Drives maximum bidding competition. Delivers true market-value pricing for stakeholders.

This has important implications for value maximization. In many distressed transactions, the highest-value purchaser is not necessarily the investor with the largest pool of capital. Frequently, it is the strategic buyer capable of realizing operational synergies, eliminating duplicative costs, expanding geographic reach, acquiring customers, securing supply chains, or integrating assets into an existing platform. Such purchasers may be willing to pay materially more than a financial buyer because the asset generates greater value within their existing enterprise.

Anyone who has participated in distressed transactions has likely encountered situations where an interested purchaser surfaced late in a process and expressed surprise that the opportunity existed at all. In many cases, this reflects neither a flaw in the sale process nor a lack of diligence on the purchaser's part. Rather, it reflects the practical challenge of navigating insolvency-sales that are dispersed across hundreds of websites and thousands of active files.

Where qualified purchasers fail to discover an opportunity, the sale process may attract a narrower universe of participants than the market would otherwise support. Although the process itself may remain entirely fair and commercially reasonable, limited discoverability can nevertheless affect competitiveness and ultimately influence realizations.

The ultimate beneficiaries of improved discoverability are creditors and stakeholders. Every additional qualified bidder increases competitiveness, strengthens price discovery, and enhances confidence that the market has been adequately tested. Even modest increases in participation can translate into meaningful differences in recoveries, particularly in mid-market transactions where a single strategic purchaser may materially outperform the rest of the field.

Put differently, the challenge is not always the sale process itself. Rather, it is whether the market has efficiently connected the opportunity with the buyer most capable of extracting value from it.

Information Gaps and Due Diligence Challenges

Another recurring challenge involves information asymmetry.

Distressed transactions often proceed under compressed timelines. Insolvency professionals must balance the need for speed against their obligation to maximize recoveries. Potential purchasers, however, require sufficient information to assess risk and formulate bids.

In many cases, diligence materials are distributed through a combination of email correspondence, virtual data rooms, confidentiality agreements, and manual document management processes. While functional, these processes can create delays and increase administrative burden.

The result is often duplication of effort, slower buyer engagement, and increased administrative burden on insolvency professionals.

Standardized data management, centralized document repositories, automated confidentiality processes, and streamlined buyer communication channels can reduce friction and accelerate transaction execution. The objective is not to replace professional judgment, but to allow practitioners to focus on value-maximizing activities rather than administrative coordination.

Streamlining the Transactional Process

Beyond identifying potential purchasers, the transaction process itself often remains fragmented.

Many distressed sales continue to involve a series of disconnected stages:

• Marketing assets;

• Executing non-disclosure agreements (NDAs);

• Managing buyer communications;

• Distributing diligence materials;

• Receiving indications of interest;

• Coordinating bid submissions; and

• Managing closing documentation.

Each stage frequently relies on separate systems and significant manual coordination.

Table 2: The Operational Cost of a Fragmented Process
Operational Friction	Practical Impact	Cost to the Process
Delayed Access	Manual NDA processing and data room setups take days.	Buyers lose critical time needed to secure board and funding approvals.
Buyer Dropout	Complex, non-standard diligence setups frustrate outside bidders.	Out-of-province and non-traditional buyers walk away early.
Administrative Drain	Tracking market engagement across scattered emails is tedious.	Creates a heavy burden when proving a thorough market test to the Court.

A more integrated approach can simplify these activities while creating a clearer and more auditable record of the sale process. This can reduce administrative burden, improve transparency, and strengthen the evidentiary foundation supporting approval motions and stakeholder confidence.

Looking Ahead

The insolvency profession has consistently adapted to changing economic conditions. The next stage of evolution may involve the emergence of a centralized marketplace for distressed assets that reduces search costs, improves market visibility, and strengthens the competitive tension that supports value maximization and stakeholder recoveries. Technology cannot replace professional judgment. It can, however, help ensure that distressed opportunities reach the broadest and most relevant universe of potential purchasers.

Table 3: Three Building Blocks of a Modern Sale Process
Step in the Process	How it Works	The Value to the Estate
Centralized Discovery	Removes search barriers so any qualified buyer can find the asset.	Expands the pool of interested, high-value strategic buyers.
Standardized Diligence	Makes the data room simple and consistent for all parties.	Speeds up risk pricing so buyers can submit firm bids faster.
Empirical Accounting	Creates an automatic, unchangeable digital record of all activity.	Provides a clearer evidentiary record of market testing for the Court.

Conclusion

As Canada's restructuring market continues to advance, there is an opportunity to build a more connected ecosystem for distressed assets.

A centralized marketplace capable of aggregating receivership sales, SISPs, distressed M&A opportunities, equipment dispositions, real estate sales, and other insolvency-related transactions could improve discoverability, broaden participation, and strengthen price discovery across the market.

Such an evolution would not alter the principles established in Soundair. Rather, it would reinforce them by helping ensure that distressed assets are exposed to the broadest and most relevant universe of potential purchasers.