Re Indalex Limited: A Question Of Priorities

The Ontario Court of Appeal's decision in Re Indalex Limited(Indalex) in April has raised a number of questions about the strength of secured creditors' interests, and the scope of an employer's duty as administrator of a pension plan under the Companies' Creditors Arrangement Act (CCAA). This article focuses on the decision's pension law implications for employers. While the decision is generally unfavourable for employers, the silver lining may be that the particular facts influencing the decision could limit its future application.

Background

Indalex Limited (Indalex Canada) sponsored and administered two defined benefit (DB) pension plans, one for eligible unionized employees (Union Plan), and the other for eligible executives (Executive Plan).