The Supreme Court of Canada, in a decision that has implications for borrowers and lenders alike, particularly where pension funds are involved, has raised some new hurdles for the country’s banks and their business customers and, at the same time, has bolstered protection for lenders of last resort who finance insolvent companies.

The court’s decision in Sun Indalex Finance, LLC v. United Steelworkers, issued earlier this year, addresses critical questions in insolvency law regarding pension funds and DIP financing. 

On December 31, 2012, Strategic Growth Bancorp Inc. (“Strategic Growth”), an El Paso, Texas-based bank holding company, acquired Mile High Banks (the “Bank”), a Colorado community bank, from the Bank’s parent, Big Sandy Holding Company (“Big Sandy”), through an auction process conducted pursuant to section 363 of the Bankruptcy Code. Davis Polk represented Strategic Growth and advised on the complex and overlapping bankruptcy, mergers and acquisitions, credit, tax and bank regulatory issues presented by the transaction.