Quebec Court Won’t Apply Indalex

A recent decision of the Superior Court of Québec in White Birch Paper Holding Company discusses the possible application of the Ontario Court of Appeal decision Indalex Limited (Re) (the Indalex Decision) in defined benefit (DB) pension plans registered in Quebec. In the Indalex Decision, it was decided, among other things, that the deemed trust provisions found in the Ontario Pension Benefits Act (the OPBA) applied to the deficit of a wound-up DB pension plan and that the assets deemed to be held in trust were not available to the debtor-in-possession (DIP) lenders.

On April 20, 2011, Justice Mongeon of the Superior Court of Québec rendered a decision in the context of the plan of arrangement with respect to White Birch Paper Holding Company (White Birch Decision), an enterprise that filed procedures under the Companies' Creditors Arrangement Act (the CCAA). In the White Birch Decision, the Court discussed the scope and possible application of the deemed trust