"Ontario Court of Appeal gives priority to pension plan wind-up deficits in CCAA proceedings", Focus on Insolvency | Restructuring - April 2011
Date:
April 8 2011
In this issue of Focus on Insolvency | Restructuring, FMC's Mary Picard and Jane Dietrich discuss the Ontario Court of Appeal's decision in Indalex Limited (Re), 2011 ONCA 265 where it was held that in certain circumstances a pension plan wind-up deficit should be paid in priority to claims of secured creditors, including amounts outstanding under a court-approved debtor-in-possession facility.
Topics include:
- The Pension Benefits Act deemed trust extends to the full amount of the wind-up deficit
- The PBA deemed trust may extend to plans that are not wound-up at the time of CCAA filing
- A wind-up deficit may have priority on the basis of "breach of fiduciary duty"
- Questionable super-priority of DIP Facility
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