The CCAA’s "Administration Charge": A Super Priority That Can Trump A Ship Mortgage

An "Administration Charge" under the CCAA

The Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended ("CCAA") permits a court having jurisdiction over proceedings for the restructuring of an insolvent company to make certain orders, to secure payment of the fees of certain officials involved in those proceedings, including the Monitor of the insolvent company appointed for the restructuring proceeding.

A surprising judgment re the "Administration Charge"

The British Columbia Supreme Court recently rendered a surprising (and rather important) judgment about such an Administration Charge in the case of WorldspanMarineInc. (Re).¹ The court held that the Administration Charge attached to the proceeds of sale of a Canadian vessel belonging to the insolvent company, even where the vessel was physically in the United States. In addition, the Court held that the Administration Charge enjoyed a "super priority" that trumped the vessel's ship mortgage