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Compliance December 1, 2011
Supreme Court of Canada to Hear its First Pension Insolvency Case
December 1, 2011 (PLANSPONSOR.com) – The Supreme Court of Canada has agreed to hear an appeal in a case brought by former employees of aluminum processor Indalex Ltd. regarding pension funding.
Reported by Tara Cantore
According to the Global and Mail, the case received a decision by the Ontario Court of Appeal in April, which concluded the former employees had a priority claim on their company’s assets to fund a shortfall in their pension plan.
Indalex’s U.S. parent, Sun Indalex Finance LLC is seeking appeal in the decision to the Supreme Court of Canada, arguing the ruling had “potentially far-researching and profound consequences,” reports the Global and Mail.
Toronto pension lawyer Mitch Frazer said the case will be the first pension insolvency matter heard by the Supreme Court, and it will lay the groundwork for all future restructurings in Canada. Frazer said the decision will be especially important in two areas—clarifying the rights of pension plan members to a priority claim on assets, and clarifying the fiduciary duties of directors who must balance the company’s needs against their new duties to the pension plan.
However, the news report said, lawyer Andrew Hatney, who represented former executives of Indalex, said the Supreme Court’s decision to hear the appeal means retirees will likely wait another year or longer to know whether they will get their pensions improved.
The Supreme Court of Canada has yet to set a date for a hearing on the case.