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Indalex decision gives priority to pensions in corporate insolvency

The Indalex decision, released by the Ontario Court of Appeal earlier this year, gave priority to pension plan members over other secured creditors that had advanced funds to keep Indalex from bankruptcy.  This case came as a surprise to many practitioners and may have far-reaching implications for pension plan administrators and creditors alike.&nbs

Canada, Employee Benefits & Pensions, Insolvency & Restructuring, Heenan Blaikie LLP, Conflict of interest, Surety, Debtor, Fiduciary, Defined benefit pension plan, Companies' Creditors Arrangement Act 1933 (Canada), Bankruptcy and Insolvency Act 1985 (Canada), Personal Property Security Act 1990 (Canada), Court of Appeal for Ontario
DIP lending charge: when super-priority is not so super

On April 7, 2011, the Ontario Court of Appeal (the “OCA”) released its decision in Indalex Limited, ordering that the reserved sale proceeds of a going-concern sale involving the Canadian Indalex entities (“Indalex Canada”), held by the court-appointed monitor, FTI Consulting Inc.

Canada, Ontario, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Heenan Blaikie LLP, Fiduciary, Beneficiary, Common law, Constructive trust, JPMorgan Chase, US Code, Companies' Creditors Arrangement Act 1933 (Canada), Supreme Court of Canada, Court of Appeal for Ontario, Ontario Superior Court of Justice
Pensions and corporate insolvency: Ontario Court of Appeal releases surprising decision

The Ontario Court of Appeal released its decision in Indalex Limited (Re), 2011 ONCA 265 on April 7, 2011. The decision comes as a surprise to many pension and insolvency professionals, lenders and pension plan sponsors. The court, essentially, directed that monies held in reserve by the monitor appointed under the federal Companies Creditors Arrangement Act should be used to pay off pension fund deficits in preference to secured creditors.

Background

Canada, Ontario, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Heenan Blaikie LLP, Credit (finance), Surety, Debtor, Fiduciary, Beneficiary, Liquidation, Common law, United Steelworkers, Companies' Creditors Arrangement Act 1933 (Canada), Personal Property Security Act 1990 (Canada), Court of Appeal for Ontario
The perils of partial wind-ups: Ontario Court of Appeal releases decision in Hydro One

The Ontario Court of Appeal released its decision in Hydro One Inc. v. Ontario (Financial Services Commission) on January 11, 2010. This was an appeal from the Ontario Divisional Court – see our Labour & Employment in the News dated April 18, 2008, that reported on the Divisional Court’s decision. The court dismissed the appeal, in favour of members of the Hydro One Pension Plan (the “Plan”).

Canada, Ontario, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Heenan Blaikie LLP, Trade union, Retirement, Court of Appeal of England & Wales, Court of Appeal for Ontario
Solvency problems? Make sure to react swiftly

In these trying times for our economy and our financial system, every business leader should pay attention to the company’s needs for working capital for the year and prepare for any potential problem related to its lack of liquidities.

Canada, Banking, Insolvency & Restructuring, Heenan Blaikie LLP, Bankruptcy, Debtor, Unsecured debt, Refinancing, Cashflow, Credit rating, Companies' Creditors Arrangement Act 1933 (Canada), Bankruptcy and Insolvency Act 1985 (Canada)