On April 7, 2011 in the context of a liquidating CCAA that achieved a going concern sale of the debtor's business, the Ontario Court of Appeal held that:

  1. an Ontario statutory pension deemed trust has priority over a court-ordered DIP charge even though the order said that the DIP charge primed statutory trusts;
  2. the deemed trust is the entire pension plan deficiency where the plan is in wind-up, dramatically increasing the amount of the priority deemed trust; and
  3. the debtor company, as administrator of the pension plans, breached its fiduciary duty as pension plan administrator such that, even if the deemed trust did not have priority, the court determined that an equivalent remedy was appropriate and effectively imposed a constructive trust (...)

type Bankruptcy Bulletin - April 2011