Hicks Morley Advises on One of Lexpert’s Top 10 Deals of 2017
The restructuring of Stelco Inc. has been listed as one of Lexpert Magazine’s Top 10 Deals of 2017 and Hicks Morley, who acted for Stelco Inc. during the restructuring process as Labour and Pension and Benefits counsel, is recognized for the firm’s contributions.
According to an announcement by the Province concerning the restructuring, “This transaction would allow Stelco’s five pension plans — which are underfunded and would otherwise face wind-up at reduced benefits levels — to remain in place without reductions, providing benefits for service accrued prior to December 31, 2017. Pension coverage for service after 2017 would be addressed in separate agreements. The framework also includes provisions for the funding of the pension plans, subject to government approvals. The new company would make various lump sum and ongoing contributions, resulting in $430 million of new contributions to the pension plans over 20 years, $160 million of which is guaranteed directly by Bedrock [Industries Group LLC].”
Stelco had been operating under the protection of the Companies’ Creditors Arrangement Act (CCAA) since being granted an initial stay of proceedings in September 2014. The court approved its restructuring under the CCAA in June 2017. The restructuring plan is supported by a Memorandum of Understanding (MOU) between Bedrock and the Province of Ontario, which sets out a policy framework intended to protect jobs while allowing the continuation of pensions and other post-employment benefits (OPEBs). The MOU also protects the environment while providing the opportunity for Stelco’s lands to be used to create value for pensions and OPEBs.