In CCAA restructuring proceedings, the applicants sought approval of a key employee retention plan (KERP) for 23 management employees and a related charge securing payment obligations.
Unions opposed the motion, arguing insufficient disclosure, excessive compensation, and lack of consultation.
The court held that s. 11 of the Companies’ Creditors Arrangement Act provides jurisdiction to approve a KERP and applied established factors including the importance of management continuity, support from the monitor and secured creditors, and the business judgment of the board.
Finding the participants critical to the restructuring and the process for establishing the KERP robust, the court approved the plan and associated charge.
The court also granted a sealing order over confidential information identifying participants and compensation amounts.