OTTAWA, Feb. 6, 2013 /CNW/ - "Retirees have once again been told to go
to the back of the line so that banks and hedge funds can collect their
winnings," says Communications, Energy and Paperworkers Union President
"It's almost criminal that Canada's bankruptcy laws continue to force
pensioners into poverty," says Coles, referring to the recent Supreme
Court decision that 170 former employees of Indalex Limited would be
stripped of the $6.7 million to cover their pensions that had been
awarded earlier by the Ontario Court of Appeal.
On Feb.1, the Supreme of Court of Canada rejected an Ontario Court of
Appeal decision that gave the underfunded pension plan primary access
to money from assets sold during bankruptcy restructuring. Though the
Supreme Court agreed that the aluminum company breached its fiduciary
responsibility to the pensioners, it said CCAA rules, which define
pensioners as unsecured creditors, override provincial pension laws.
Indalex Limited sought Companies' Creditors Arrangement Act (CCAA)
protection in 2009 and as a result 170 of its former employees saw
their pensions slashed in half.
"Over the past few years, tens of thousands of retirees, many in the
forest industry, have seen their pensions wiped out by this biased
legislation," adds Coles. Enough is enough. Legislators must act to
stop this crime against pensioners."
He pointed to the 800 retirees of Fraser Papers, CEP members, who lost
between 30% and 40% of their pensions when the company filed for
protection under CCAA four years ago. The company's secured creditors,
including Brookfield Asset Management, CIT Bank, CIBC and the
Government of New Brunswick, were paid the $110 million owed to them.
The unsecured creditors, which included $219 million owed to the
pension plans, received little.
"To rub salt in the wound, the principal shareholder that took Fraser
Papers into CCAA, Brookfield Asset Management, maintained a dominant
ownership position in the restructured company. This $150 billion
corporate behemoth used bankruptcy protection to wipe out its pension
"Pensions should be legally considered as deferred wages with priority
over other creditors," says Coles, adding that Canada Pension Plan
coverage should also be expanded.
CEP is the largest union in several key sectors of the economy,
including forestry, energy, communications and media.
SOURCE: COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA
For further information:
Dave Coles (613) 299-5628