In October 2013, the Ontario Court of Appeal released its decisions in Nortel Networks Corporation (Re) and Northstar Aerospace Inc. (Re). These decisions throw yet another wrench into the gears for owners and past owners of contaminated properties and the directors and officers of corporations owning such properties.

Background to Nortel

On October 28th, 2013 the Ministry of the Environment (“MOE”) and the former directors and officers of Northstar Aerospace Canada (“Northstar”) reached a $4.75 million settlement for the remediation of a property owned by Northstar in Cambridge, Ontario.

Introduction
Implications
Facts
Supreme Court decision
Comment

Introduction

The Court of Appeal for Ontario's (the "OCA") decision in Re Indalex Ltd.¹ was decried by professionals in pension, banking and insolvency practices. On February 1, 2013, the Supreme Court of Canada (the "SCC" or the "Court") overturned the OCA's decision.

Introduction
Summary
Facts
Supreme Court decision
Comment

Introduction

The Supreme Court of Canada’s decision inSun Indalex Finance, LLC v United Steelworkers, 2013 SCC 6, has a number of implications for employers, pension plan administrators, as well as both secured and unsecured creditors.

On February 1, 2013, the Supreme Court of Canada (SCC) released its much-awaited decision in theIndalex case.¹ While the central issue in Indalex was the priority of wind-up deficiencies in defined benefit pension plans versus court-ordered debtor-in-possession (DIP) financing charges under the Companies’ Creditors Arrangement Act (Canada) (CCAA), the SCC also considered whether claims for wind-up deficiencies are covered by deemed trusts under the Ontario Pension Benefits Act (PBA).

On Friday, the Supreme Court of Canada handed down its decision in the landmark pension/insolvency case, Sun Indalex, LLC v. United Steelworkers. 

The Supreme Court of Canada’s decision in (Re) Indalex has changed the landscape for both lenders and borrowers in Canada who sponsor registered defined benefit pension plans. For lenders, carefully drafted loan documentation and effective planning can enhance the protection of a secured lender’s position in the face of the broadened scope of a deemed trust applicable to a borrower’s defined benefit pension obligations.

On February 1, 2013, the Supreme Court of Canada released its decision in Sun Indalex Finance, LLC v. United Steelworkers^[1]. The ruling: