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LEGAL REPORT/INSOLVENCY protection, it sought interim financing to continue operations while it sought to sell its assets. This type of financing has super priority in these cases, but the court ruling noted that it would not be paid off at the expense of the pension plans. The court granted deemed-trust status to the pension plans, which gave them priority over the creditors. "There is nothing in the record to suggest that giving the deemed trust priority would have frustrated Indal- ex's efforts to sell itself," says the ruling. Andrew Hatnay, a partner at Koskie Minsky LLP who represented the for- mer executives in the case, says com- panies must draw lessons from the rul- ing. "The case sends a wake-up call to restructuring companies that they cannot ignore their underfunded pen- sion plans, which can lead to a loss of pension benefits, and that they should deal with pension underfunding with proper reporting to plan members and the courts and without a conflict of interest," says Hatnay. Because of the company's conduct and uniqueness of the circumstances of the case, the court made a point to note the decision should be seen as par- ticular to the case, rather than a blanket precedent for insolvent companies. But Jane Dietrich, an insolvency partner at Fraser Milner Casgrain LLP, says the decision will still raise significant uncertainty for companies that need to reorganize under the protection of the CCAA. And from an insolvency law- yer's perspective, she says this decision is problematic. "For companies with a defined-benefit pension plan where the deficit is very large, it takes away the ability to have a lender and go forward with them to help restructure their company to save jobs," she says. Dietrich adds one way companies might get around the court ruling is that they would simply elect not to become managers of the registered plans, getting an independent adminis- trator involved. The Ontario Court of Appeal might not be the last stop for the Indalex case. The American parent company, acting as a secured creditor, has indicated it will apply for leave to appeal the case to the Supreme Court of Canada. Dietrich says she hopes the Supreme Court will take it on to clarify the issue, and she doesn't hide the fact that many insolvency law- yers will be rooting for the decision to be overturned. "There is a lot of uncer- tainty," she says. "Hopefully the Supreme Court will grant leave." Rupert Chartrand, a partner at Osler Hoskin & Harcourt LLP, agrees that by granting the pensions deemed-trust priority over the debtors in possession, the court has likely made it more dif- ficult for future debtors to secure DIP financing. Because the court deter- mined Indalex also breached its fidu- ciary obligations as administrator of the plans during the CCAA proceeding, Chartrand says the ruling has opened the door for increased obligations and DO YOU KNOW WHEN BREATHALYZER CERTIFICATES ARE ADMISSIBLE IN COURT? NEW PUBLICATION A GUIDE TO BREATHALYZER CERTIFICATES IN CANADA ALAN PEARSE Gain a better understanding of the admissibility of a Breathalyzer Certificate as evidence and when it can be used to prove a .08 blood alcohol charge in impaired driving cases. This is the only resource that provides you with a comparison of pre and post 2008 Criminal Code amendments side-by-side and analyzes the "Carter" defence and where it can be applied. THIS PRACTICAL GUIDE IS EXTREMELY USEFUL FOR ALL PARTIES INVOLVED: • Crowns can use this practical, in-depth guide to help prepare for the trial ORDER # 804521-69017 $99 1 volume looseleaf 1 supplement per year 978-0-88804-521-8 Supplements invoiced separately Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. • Defence can rely on this guide to advise clients, prepare for trials and use as a reference in court. It will point out where the motorists' Charter of Rights and Freedoms may have been violated when obtaining the certificate. • Judges will find it useful for helping decide technical issues involved in breathalyzer certificates. SAVE TIME WITH MANY HELPFUL FEATURES, INCLUDING MORE THAN 500 CASES This guide is easy-to-use and is organized in the same way an impaired driving investigation unfolds. Each chapter is divided into several sections to help you get the information you need fast. AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.canadalawbook.ca | Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 CANADA LAW BOOK® 44 JUNE 2011 www. CANADIAN Lawyermag.com Untitled-3 1 5/11/11 3:34:20 PM