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ResidualCo in a CCAA reverse vesting transaction declared a former employer for WEPPA benefits.
In a CCAA proceeding, Synaptive Medical Inc. underwent a reverse vesting transaction where its unwanted assets and liabilities, including the employment contracts of 48 terminated employees, were transferred to ResidualCo.
Synaptive and ResidualCo sought a declaration that ResidualCo is a 'former employer' under the Wage Earner Protection Program Act (WEPPA) so the terminated employees could access WEPPA benefits.
The Attorney General opposed, arguing the employees never provided services to ResidualCo.
The court granted the declaration, finding that under the common employer doctrine and the purpose of WEPPA, ResidualCo qualifies as a former employer, and the court has jurisdiction to make this determination for both CCAA and bankruptcy purposes.
CCAA court approved holdback release and narrowed tax liability protection.
In CCAA proceedings arising from a major construction project, the monitor sought an order authorizing release of a contractor-specific holdback notwithstanding the continued construction of the project and the resulting technical inability to satisfy the timing requirements of the construction lien regime.
The court held that s. 11 of the CCAA gave it jurisdiction to deem compliance with statutory preconditions where doing so usefully furthered the remedial objectives of the restructuring, caused no demonstrated prejudice, and preserved the substantive rights of affected stakeholders.
The court also held that it could protect the monitor and CRO from potential personal liability under specified tax statutes for implementing the court-authorized payment, but revised the proposed wording to grant a narrower and more direct liability shield.
The holdback release order was approved with modifications, including removal of an unnecessary overlapping protection.
