You're right on the money, Watewate. But CP was also already so ill-managed financially that by the time CP's management woke up and smelled the coffee, it was too late and conditions were already set for a takeover by Air Canada. Even if Onex had successfully taken over CP, there would've been such a huge debt load that the airline might not even be able to operate properly after having to sell so many airplanes and other assets in order to satisfy the creditors - or being seized en masse by creditors. I've heard about attempted seizures of CP 744s by creditors in Hong Kong.
A lot more CP employees would've lost their jobs and many routes would have been disrupted domestically and internationally if CP were to have entered Chapter 11 while under the ownership by a non-airline company. When you think about it, it was actually better that Air Canada take CP over, even though the idea was not terribly popular with the Canadian public and CP's employees. This saves even more disruptions in airline service. There were a lot of Canadian communities which had only CP service before AC took over CP. The same went for certain international routes, such as YVR-NRT.