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Old 02-01-2013, 03:20 PM   #1
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Supreme Court rules against pension holders


OTTAWA - The Supreme Court of Canada has ruled against the pension plan members of a bankrupt Ontario company, saying they do not have priority over secured creditors.

The landmark pension ruling on Friday is a major boost for companies with pension obligations that face tough restructuring issues. It is a setback for workers whose employers fall on hard times and have to wind up once-lucrative pension plans.

The ruling centres on the financial hardship of Indalex, a Toronto-based aluminum company that sought bankruptcy protection in 2009 with shortfalls in its two pension plans.

Pensioners are usually at the end of the line to be paid when the assets of a failed company are sold, but the Ontario Court of Appeal changed that in a 2011 ruling on the Indalex case.

The Supreme Court, by a 5-2 margin, overturned that decision.

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