Rupert Chartrand, Marc Wasserman and Andrea Lockhart have published an Osler Update: Ontario Court of Appeal Grants Retirees Priority over Secured Creditors. The Update describes the Court’s decision in Re Indalex Limited from restructuring proceedings under the Companies Creditors’ Arrangement Act (Canada).
This case is of particular interest to lenders due to the outcome of the priority contest over a reserve fund consisting of proceeds from a sale of the business assets of the debtor and its affiliates. The Court found that payments for the full deficiency of underfunded defined benefit pension plans had priority over the holder of a court ordered debtor-in-possession charge (ie. a secured creditor).
See the Update for a full discussion.