Employee Benefits In An Insolvency

In a judgment rendered in December 2012, the British Columbia Court of Appeal ("BC CA") further clarified an insurer's priority for payment of unpaid health plan contributions. In Re: Ted Leroy Trucking Ltd. the bankrupt had provided health insurance (and disability insurance) to its employees as part of its wage package (the "Health Benefits"). While the Health Benefits were provided by the insurers, in the months leading up to the bankruptcy the insurers had not received payment on account of their premiums. The insurers argued that the failure to remit payment of the premiums constituted an employee claim that enjoys super priority status (i.e. paid out ahead of many other types of claims) in a bankruptcy pursuant to section 81.3 of the Bankruptcy and Insolvency Act ("BIA").