Supreme Court of Canada Overturns Ontario Court of Appeal on Key Pension & Corporate Insolvency Issues
Chaitons LLP partners Harvey Chaiton and George Benchetrit successfully represented the U.S. Trustee before the Supreme Court of Canada (“SCC”) in Sun Indalex Finance, LLC v. United Steelworkers. In its decision released on February 1, 2013, the SCC upheld the super-priority ranking of the charge in favour of a DIP lender granted under the Companies’ Creditors Arrangement Act over the statutory deemed trust in favour of pension plan beneficiaries. The SCC also held that the deemed trust includes the amount of a pension plan’s wind-up deficiency, a ruling that could have significant ramifications for secured lenders. The decision also contains important pronouncements on the responsibilities of insolvent companies with self-administered pension plans.