In CCAA proceedings involving several affiliated corporate applicants, the monitor sought court approval of a settlement resolving competing priority claims over estate funds among pension plans, a U.S. bankruptcy trustee, secured lenders, and other creditors.
The settlement provided for partial distributions to pension beneficiaries and retired executives, with the remaining funds payable to the U.S. trustee for the bankruptcy estates of related U.S. debtors.
The court held the settlement was a reasonable and proportionate resolution that avoided costly and protracted litigation over competing statutory deemed trusts and secured claims.
A related motion by the pension plan administrator sought amendment of the salaried pension plan to implement the settlement distribution scheme.
Relying on its broad discretionary authority under s. 11 of the Companies’ Creditors Arrangement Act, the court ordered the amendment where notice had been given and no affected party objected.
