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ARTICLE · 04 NOVEMBER 2019

CCAA Priming Charges May Supersede Statutory Deemed Trusts

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In Canada v. Canada North Group Inc., 2019 ABCA 314, the Court of Appeal of Alberta upheld the decision of the Court of Queen's Bench of Alberta, which held that the Companies' Creditors Arrangement Act ...

CanadaFinance and Banking
Shakaira John
Shakaira John
Ian Aversa
Ian Aversa
Gaurav Gopinath
Gaurav Gopinath
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In Canada v. Canada North Group Inc., 2019 ABCA 314, the Court of Appeal of Alberta (the “ABCA”) upheld the decision of the Court of Queen’s Bench of Alberta (the “Lower Court”), which held that the Companies’ Creditors Arrangement Act (the “CCAA”) permits courts to subordinate statutory deemed trusts in favour of the Crown to court-ordered insolvency priming charges.

Priming charges (or “super-priority charges”) are created by court order pursuant to discretion granted under sections 11.2, 11.51 and 11.52 of the CCAA to facilitate a debtor’s access to interim financing for the purpose of completing a restructuring or arrangement process. They rank ahead of claims held by secured creditors who would otherwise rank in priority, and may even supersede prior-granted priming charges if the court so orders.1

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