In a decision released on February 1, 2013, the Supreme Court of Canada set aside the Ontario Court of Appeal’s decision in Sun Indalex Finance, LLC v. United Steelworkers. The majority of the SCC upheld the priority of charges created in Companies’ Creditors Arrangement Act (“CCAA”) proceedings over claims for wind-up funding deficiencies in an insolvent company’s pension plans.
In its decision, the SCC addresses three primary issues:
• the application of Ontario’s Pension Benefits Act (“PBA”) deemed trust provisions to pension plan wind-up deficiencies;
• the priority between provincial statutory deemed trusts and charges created in CCAA proceedings; and
• the fiduciary duties of pension plan administrators in CCAA proceedings and whether a constructive trust is the appropriate remedy for a breach of such duties.
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