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"The case sends a wake-up call to restructuring companies that they cannot ignore their underfunded pension 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." ANDREW HATNAY, KOSKIE MINSKY LLP liabilities on CCAA debtors. But Hatnay argues that although many people seem upset over the fact the court gave pri- ority to pensions over creditors, the law protecting pensions in such cases has been on the books for quite some time. "The legal foundations of the case are not new," says Hatnay, adding the deemed trust has been in the Ontario Pension Benefits Act for decades and both Ontario's and Canada's highest court have made it clear in several cases that a pension plan administrator owes a fiduciary duty to plan members. "This case is not so much a shift in the law, rather it is existing law applied to the facts of this case." At the end of the day, Indalex is the latest in a series that involves wrangling over pensions in insolvent companies. And concerns over underfunded pension plans exist even in companies that don't have insolvency problems. It's a legal area where business, labour, and government often find themselves entangled. The United Steelworkers says in many past cases, employees and pen- sioners have suffered drastic reductions PROFESSIONAL DIRECTORY in their pensions, as corporate assets were distributed first to creditors ranked ahead of pension plans, so the ruling is a welcomed precedent to protect the income of retired workers. "This is a remarkable victory for these workers and pensioners," says Ken Neumann, USW's national director for Canada. "We hope this ruling sets a precedent to help protect the pensions of many other Canadians and convince our federal government to finally pass legislation to enhance the rights of pension plan members in bankruptcy cases." ntitled-5 1 Supreme Court of Canada Counsel and Agency Services Henry S. Brown, QC Brian A. Crane, QC Guy Régimbald Martin W. Mason Graham Ragan Matthew Estabrooks Eduard J. Van Bemmel, Law Clerk 4/6/09 4:20:13 PM montréal ottawa toronto hamilton waterloo region 160 Elgin StreetSuite 2600OttawaOntarioK1P 1C3T 613-233-1781 calgary vancouver moscow london www.CANADIAN Lawyermag.com JUNE 2011 45 ntitled-5 1 12/13/10 3:13:40 PM