On February 1, 2013, the Supreme Court of Canada (SCC) released its long-awaited decision in Sun Indalex Finance, LLC, et al. v. United Steelworkers, et al., 2013 SCC 6.

The SCC has affirmed that priority charges created by courts in insolvency proceedings supersede provincial statutory deemed trusts for pension claims.

The SCC decision is welcome news for “debtor-in-possession” (DIP) lenders, who questioned their priority position in the face of the Ontario Court of Appeal judgment in this proceeding, which reached the opposite conclusion.

The long-awaited and highly anticipated decision of the Supreme Court of Canada in the Indalex case was released today. The decision stems from an appeal of an Ontario Court of Appeal decision dealing with a priority dispute between a court-ordered debtor-in-possession (DIP) charge granted under the Companies’ Creditors Arrangement Act (Canada) (CCAA) and a deemed trust for a wind-up pension deficiency asserted under the Pension Benefits Act (Ontario)(PBA).

The Supreme Court of Canada overturned the Ontario Court of Appeal today in what is one of the most highly-anticipated cases for the pension and insolvency bars pending before the courts. In Indalex (Re) 2013 SCC 6, the court provided clarity regarding some key questions relating to the governance of an employer-administered pension plan during a proceeding under the Companies’ Creditors Arrangement Act (CCAA). The judges split on some of the issues, but here is our brief round-up:

The highly anticipated decision of the Supreme Court of Canada in Re: Indalex was released this morning.

Here are the key highlights:

On February 1, 2013, the Supreme Court of Canada in Re Indalex allowed in part the appeal of Sun Indalex Finance and, in doing so, delivered guidance to companies entering into restructuring proceedings.  

Background

On February 1, 2013, the Supreme Court of Canada rendered its much-anticipated decision in Sun Indalex Finance, LLC v. United Steelworkers et al. (Indalex). This bulletin focuses on pension plan administration issues arising from the Indalex case.

Facts

R. v. Dunn, Beatty and Gollogly 2013 ONSC 137

Introduction

Introduction

A ruling on December 7, 2012, by the Supreme Court of Canada has determined that orders made under provincial environmental protection legislation can be compromised as part of insolvency proceedings. While not all regulatory claims will be compromised in this way, those that meet certain criteria of "monetary claims" can be. The decision in Newfoundland and Labrador v. AbitibiBowater Inc. has important ramifications for debtor companies and their stakeholders in respect of contaminated property and other regulatory matters.

Shareholders often overlook the need to properly document loan advances in their haste to provide funds to the company, without being aware of the significant consequences that can result.