December 01, 2011
The Supreme Court of Canada will make a "seminal" decision about the rights of pension-plan members to make a claim on a bankrupt company's assets to cover pension shortfalls.
The ruling will be the first pension insolvency case heard by the Supreme Court, and will lay the groundwork for all future restructurings in Canada, said Mitch Frazer. "This will be the seminal case in insolvencies dealing with pension issues," he said.
Mitch 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.
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