Indalex Limited (Re)

2001 ONCA 265 (Released 7 April, 2011)

Companies' Creditors Arrangement Act – Pensions – Priorities – Fiduciary Obligations – Funding Pension Plans

This decision considers the obligations of a company acting as both employer and pension administrator where the company becomes insolvent.  Indalex Limited ("Indalex") obtained protection from creditors under the Companies' Creditors Arrangements Act ("CCAA").  At the time, Indalex provided two pension plans, the "Executive Plan" and the "Salaried Plan", and was the sponsor and administrator of both.

During the CCAA proceedings, the court authorized Indalex to borrow funds pursuant to a DIP credit agreement and granted the DIP lenders a super-priority charge in Indalex's property.  A few months after obtaining CCAA protection, Indalex moved for approval of the sale of its assets on a going-concern basis, and for approval to distribute the sale proceeds to the DIP lenders.  The result was nothing would remain to