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On the Case
Ouellet, Patrick
Woods LLP
(514) 982-2551
pouellet@woods.qc.ca
Partner since 2006,
is known as a hands-
on trial lawyer and an
astute cross-examiner.
Practises in commer-
cial, corporate and civil
litigation and arbitration
in securities, telecom-
munications, class ac-
tions, construction and
shareholder disputes.
Pape, Paul J.
Pape Barristers
Professional
Corporation
(416) 364-8765
pjp@papebarristers.com
Mr. Pape focuses on
commercial, securities,
class action, medical
malpractice and admin-
istrative matters, with a
special emphasis on ap-
peals. He is a Fellow of
the IATL and the ACTL.
He has acted in
a number of cases
of significance.
Pliszka, Peter J.
Fasken Martineau
DuMoulin LLP
(416) 868-3336
ppliszka@fasken.com
Mr. Pliszka, Chair of
Fasken's Product Liabil-
ity Group, is national
counsel on product
liability, class action and
insurance litigation mat-
ters. He specializes in
cross-border litigation,
and is regularly retained
by foreign companies
sued in Canada.
Paliare, OO,
LSM, Chris G.
Paliare Roland
Rosenberg
Rothstein LLP
(416) 646-4318
chris.paliare@paliareroland.
com
Mr. Paliare's practice
embraces trials, hear-
ings and appeals. His
cases engage com-
mercial, administrative,
class action, employ-
ment and professional
discipline matters. He
is a Fellow of the IATL,
ACTL, ISB and is an
Hon. Fellow of COMBAR.
Pasparakis, Orestes
Norton Rose Fulbright
Canada LLP
(416) 216-4815
orestes.pasparakis@norton-
rosefulbright.com
Mr. Pasparakis's
practice encompasses
shareholder activism,
sophisticated securities
disputes and complex
reorganization trans-
actions. He focuses on
high-stakes disputes
that often proceed in
"real time" or on an
urgent basis.
Plumpton, Linda M.
Torys LLP
(416) 865-8193
lplumpton@torys.com
Ms. Plumpton's practice
focuses on competition
litigation, class action
defence, corporate/
commercial disputes
and securities litiga-
tion. Also practises in
the areas of public law,
constitutional law
and employment.
assured that they will be able to convert CCAA proceedings
to bankruptcy proceedings," says David Byers at Stikeman
Elliott LLP in Toronto, who represented Ernst & Young
Inc., the monitor in the CCAA proceedings.
Arguably, the Court of Appeal also limited the extent of
the priority available to pension plan wind-up deficits in
CCAA proceedings. e seminal
case on the issue is the Supreme
Court of Canada's ruling in In-
dalex, which held that the statu-
tory deemed trust that applies in
CCAA proceedings on the wind-
up of a pension plan applies to the
entire wind-up deficiency. What
remained unclear was whether the
deemed trust applied when the
wind-up, which occurred before the
initial order in the CCAA proceed-
ings in Indalex, also applied when the wind-up post-dated
the initial order — as it did in Grant Forest.
e case arose in 2009 when Justice Colin Campbell of
the Superior Court of Justice granted CCAA protection to
Grant Forest Products Inc. GFPI continued to make its con-
tribution under the pension plans it was administering for
its employees.
Following an asset sale, the court granted the Superin-
tendent of Financial Service's request for a wind-up order, a
development that triggered GFPI's obligation to make sig-
nificant wind-up payments as required by the Pension Ben-
efits Act. Campbell ordered that these payments be withheld
from the distribution of proceeds from the asset sale, leaving
insufficient funds to satisfy all the secured creditors.
When GFPI applied for an order that it was not required
to make the wind-up payments, Campbell ruled that the
deemed trust provisions of Ontario's Pension Benefits Act
(similar provisions can be found in other Canadian jurisdic-
tions) do not prevail over the pre-existing security of other
creditors when a pension plan is wound up during the course
of CCAA proceedings.
e Court of Appeal did not explicitly uphold this ruling.
It did, however, distinguish the facts in Grant Forest from In-
dalex, pointing out that the wind-up in Indalex had occurred
before the CCAA proceedings started.
According to a recent Torys LLP bulletin, "Although the
OCA did not expressly affirm Justice Campbell's conclusion
on this point (i.e., that the PBA deemed trust priority only
applied to plans that are wound up before the commence-
ment of insolvency proceedings), they did not question his
findings in any way."
On this view, Grant Forest serves
to contain the impact of Indalex
on secured creditors by limit-
ing the circumstances in which
deemed trusts apply to alter priori-
ties in CCAA proceedings. "is
should give comfort to secured
lenders, especially where secured
credit facilities contain covenants
restricting the commencement of
such wind-up proceedings," the
Torys lawyers write.
Still, the priority issue remains controversial and will
doubtlessly be litigated again. "e Court of Appeal's deci-
sion in Grant Forest in no way limits the application of Indal-
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