Abraham v. Coopers & Lybrand Ltd. Trustee in bankruptcy for Canadian Admiral Corp.
Bankruptcy: Employee Vacation Pay Priority Over Bank Act
Summary
This is a bankruptcy and insolvency case involving employees' claims for vacation pay and pension benefits against a trustee in bankruptcy. The court addressed whether provincial statutory deemed trusts and liens under the Employment Standards Act and Pension Benefits Act have priority over Bank Act security, and whether the claims were barred by limitation periods. The court found the provincial statutory trusts valid and enforceable with priority over Bank Act security, and applied section 178(6) of the Bank Act to grant employees priority for vacation pay accrued in the three months preceding bankruptcy.
Outcome
Provincial statutory deemed trusts and liens found valid and enforceable with priority over Bank Act security; employees entitled to priority for vacation pay.
Award
Priority established for vacation pay accrued in the three months preceding bankruptcy under section 178(6) of the Bank Act; provincial statutory trusts enforced.
Key Factors
- statutory trusts
- priority
- vacation pay
- pension benefits
- Bank Act security
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This is legal information, not legal advice. Ontario Severance is an educational tool. If you are facing a serious employment law matter, consult with a qualified employment lawyer in Ontario.