Lump sum retention bonuses found to be post-filing compensation and ordered paid in CCAA proceedings.
In the context of CCAA proceedings for U.S. Steel Canada Inc., three former employees brought a motion seeking payment of lump sum retention bonuses under their severance agreements.
The respondent argued the payments were pre-filing obligations subject to the CCAA stay.
The court found the bonuses were compensation for post-filing services, as they were contingent on the employees remaining available to work during the notice period.
The court exercised its discretion to order payment, finding it fair and equitable as it would not create an unfair priority over other employees and the amounts were de minimus.
James Newton, Laurie Saunders and Robert Cernick v. U.S. Steel Canada Inc., 2015 ONSC 5990