Case information

None.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Bankruptcy and insolvency – Jurisdiction – Determination that a judge supervising reorganization has no jurisdiction to apply the doctrine of equitable subordination – Whether the Court of Appeal erred by dismissing the Union’s appeal – Whether the Court of Appeal erred by holding that there is no authority under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (CCAA) for the court to apply the doctrine of equitable subordination – Whether the Court of Appeal’s decision narrows the scope of court’s authority under the CCAA, contrary to this Court’s jurisprudence – Whether the Court of Appeal’s decision has created uncertainty about the court’s jurisdiction under Canada’s different insolvency statutes and incentives for creditors to initiate insolvency proceedings – Whether the status of equitable subordination in Canadian insolvency law remains unsettled after thirty years of jurisprudence, and requires this Court’s guidance.

U.S. Steel Canada Inc. is in CCAA protection. Its American parent is United States Steel Corporation. After U.S. Steel Canada obtained a CCAA protection order in the Superior Court of Justice, the supervising judge made a claims process order, establishing a procedure for filing, reviewing and resolving creditors’ claims against U.S. Steel Canada. One of the claims involved approximately $2.2 billion of debt against U.S. Steel Canada by its American parent company. The applicant Union and a number of other stakeholders advanced various objections to these claims.

The CCAA judge had to decide which objections should be dealt with within the CCAA process, outside it, or not at all. One such objection before the judge was based on the doctrine of equitable subordination, developed in American insolvency law and now codified in the U.S. Bankruptcy Code. The Union sought, among other things, an order subordinating U.S. Steel claims in whole or in part to its claims, based on the conduct of U.S. Steel in relation to the Canadian plants, pensioners, pension plan members and beneficiaries.