On February 1, 2013, the Supreme Court of Canada (the
"SCC") released its long-awaited decision in Sun
Indalex Finance, LLC v. United Steel Workers1
("Indalex"). By a five to two majority, the SCC allowed
the appeal from the 2011 decision of the Ontario Court of Appeal
(the "OCA") which had created so much uncertainty about
the relative priorities of debtor-in-possession ("DIP")
lending charges and pension claims in Companies' Creditors
Arrangement Act (the "CCAA") proceedings.
The SCC was unanimous in holding that the deemed trust for pension
claims created by section 57 of the Pension Benefits Act
(Ontario) (the "PBA"), which deemed trust is
elevated to priority status by the operation of subsection 30(7) of
the Personal Property Security Act (Ontario) (the
"PPSA"), had survived into the commencement of
Indalex's CCAA proceeding but then had its priority
reversed by the court-ordered charge in favour of the DIP lender.
The SCC held that a DIP charge in a CCAA
