Lender strategy in light of new pension priorities

Recent changes to the Bankruptcy and Insolvency Act have given certain unpaid pension plan contributions priority over a lender’s security if the employer is bankrupt or in receivership. How can a lender monitor the debtor’s pension arrears to assess the extent of the lender’s loss of priority?

The Bankruptcy and Insolvency Act now provides that certain unpaid pension plan claims rank ahead of a lender’s security in bankruptcy or receivership proceedings. Effective July 7, 2008, sections 81.5 and 81.6 give super-priority status to:

Filed under:
Canada, Employee Benefits & Pensions, Insolvency & Restructuring, Dentons, Bankruptcy, Debtor, Liability (financial accounting), Defined contribution plan, Defined benefit pension plan, Bankruptcy and Insolvency Act 1985 (Canada)
Authors:
Ross W. Walker
Location:
Canada
Firm:
Dentons