USSC Pensioners Lose Appeal on Creditor Claims

Pensioners at US Steel Canada lost another court battle to put their pension claims ahead of US Steel’s debt claims.

A ruling by the Ontario Court of Appeals on Friday, upheld a decision made by Justice Herman Wilton-Siegel in March. Pensioners, provincial government, and former Stelco president Bob Milbourne claimed that US Steel, the largest creditor of USSC, had acted unfairly, running US Steel Canada into insolvency to further its own interest. During the court proceedings earlier this year, the issue of “equitable subordination” arose in which unfair behavior by the company could push lower ranked claims ahead of those of senior creditors. Justice Siegel ruled that an equitable subordination principle, a U.S. legal doctrine, could not be applied in a CCAA restructuring and that he had no jurisdiction to do so.