Jane Dietrich

In a liquidating CCAA proceeding, the court considered whether a deemed trust under the Pension Benefits Act arose in respect of pension plan wind-up deficiencies, giving priority over secured creditors.

Applying the Supreme Court's decision in Indalex, the court held that no deemed trust arose because the pension plans were not wound up prior to the CCAA Initial Order.

The court granted the second lien lenders' motion to lift the stay of proceedings to allow a bankruptcy petition to proceed, concluding that imposing a provincial deemed trust priority in the middle of an insolvency proceeding would undermine the predictability and flexibility of the CCAA regime.

On a cross-border insolvency recognition motion under ss. 44-49 of the Companies’ Creditors Arrangement Act, the moving party sought recognition of U.S. Chapter 11 proceedings as foreign main proceedings and requested ancillary relief, including enforcement of first-day orders, appointment of an information officer, and an administration charge.

The court held that Chapter 11 proceedings qualified as foreign proceedings and accepted that the moving party was a foreign representative, subject to possible further U.S. court developments.

Applying a centre of main interests analysis that can rebut the registered-office presumption, the court found the Canadian debtors’ centre of main interests was in the United States.

Mandatory and discretionary relief under Part IV of the statute was granted, including the requested supplemental orders and a capped administration charge.

The Chapter 11 Debtors brought a motion under section 49 of the CCAA for recognition and implementation of several orders made by the U.S. Bankruptcy Court, including a Final DIP Facility Order.

The Information Officer noted that the Final DIP Facility Order contained a partial 'roll up' provision that would not be permissible under section 11.2 of the CCAA in a domestic proceeding.

The court held that recognition of the foreign orders was necessary for the protection of the debtors' property and creditors' interests, and that the public policy exception under section 61(2) of the CCAA should be interpreted restrictively and did not apply to prevent recognition.