Sun Indalex v. United Steelworkers Decision

The long awaited decision of the Supreme Court of Canada in Sun Indalex Finance, LLC v. United Steelworkers et al. was released today.

In a decision which divided the Court, the majority allowed the appeals brought by Indalex’s parent and the guarantor of Indalex’s DIP loans. In doing so, the majority upheld the priority of the DIP security over claims for funding deficiencies existing in Indalex’s two pension plans.

In its decision, the Court organized the matters in issue into three main categories:

1. Application of the statutory deemed trust;

2. Priority of pension liability claims under the statutory deemed trust; and

3. Breach of fiduciary duty and constructive trust.