Jockeying For Position: The Implications of Indalex on the Invocation of Bankruptcy to Reorder Priority of Distribution in Insolvency
Article originally published in The Six-Minute Debtor-Creditor and Insolvency Lawyer 2012
The insolvency profession is eagerly awaiting the decision of the Supreme Court of Canada in Re Indalex Ltd., on appeal from the Court of Appeal for Ontario. The case deals with a number of controversial issues, including the rights of pensioners in insolvency proceedings, the interplay among federal bankruptcy and insolvency laws and provincial deemed trusts, the fiduciary duties of pension plan administrators, and the use of constructive trusts to reorder priorities in insolvency proceedings, to name but a few. One issue that has gone practically unnoticed is the decision of the Court of Appeal, confirming the view of the judge at first instance in the Ontario Superior Court of Justice, that the invocation of bankruptcy proceedings should not be used to deprive pensioners of priority claims established under provincial law.