Field Aviation: the release the machinists read

More than half of the sixty-six people in the machinists' bargaining unit at Field Aviation had been there more than twenty years, and two of them started in the 1980s. That is the reason the union's number was as large as it was: the International Association of Machinists and Aerospace Workers calculated that on termination those sixty-six employees would be collectively entitled to approximately $1.7 million in severance pay and pay in lieu of notice, per Factum of the IAM, July 26, 2026, paras. 1, 3–4.

The union did not oppose the sale of the business. It supported every part of the motion but one: it asked the Court to exclude employee claims from the release the directors were about to receive, per Factum of the IAM, July 26, 2026, para. 2.

The proceeding, in outline

Field Aviation Company Inc. and Field Aviation East Ltd. each filed a notice of intention to make a proposal on June 5, 2026 under section 50.4(1) of the BIA, and the purpose was never a going-concern plan — it was a stabilized environment in which to run a stalking horse sale process and wind the business down in an orderly way, per Second Report of the Proposal Trustee, July 22, 2026, paras. 1–2.

The proposal trustee's name changed underneath the mandate. KSV Advisory Inc. was acquired by an affiliate of AlixPartners Restructuring, Inc. effective June 1, 2026, four days before the notices were filed; the name change had not yet been approved by the Office of the Superintendent of Bankruptcy, so KSV Restructuring Inc. was the entity appointed, and the approval came later. The people did not change, per Second Report of the Proposal Trustee, July 22, 2026, para. 1, n. 1.

On June 12, 2026 the Field entities obtained two orders. The first approved an interim financing term sheet dated June 5 between Field Canada as borrower, Field East as guarantor and Wells Fargo Capital Finance Corporation of Canada as interim lender, with Wells Fargo Bank, National Association as agent; extended the time to file a proposal by forty-five days to August 19; consolidated the two proceedings administratively; approved a key employee retention plan and sealed it; approved Riveron Consulting LLC as chief restructuring officer nunc pro tunc; and granted the administration, DIP lender's, directors' and KERP charges. The second approved the sale and investment solicitation process, per Second Report of the Proposal Trustee, July 22, 2026, para. 3.

A process that produced no rival

The teaser went to thirty-eight parties from June 15, 2026. The bid deadline was July 13. To qualify, a bid needed a cash deposit of at least 10% and a value clearing the stalking horse price plus the break fee, the expense reimbursement and a minimum overbid of $300,000, per Second Report of the Proposal Trustee, July 22, 2026, s. 4.1, paras. 1–3.

Four bids arrived. None qualified. Each was for a small piece of the business, and no proposed price exceeded US$250,000; some of them wanted assets the stalking horse agreement already covered. On July 13 the proposal trustee declared the stalking horse agreement the successful bid, per Second Report of the Proposal Trustee, July 22, 2026, s. 4.2, paras. 1–2.

That agreement is with two buyers taking two sets of assets for US$6.5 million in aggregate: De Havilland Aircraft of Canada Limited at US$3.9 million and PAL Aerospace Ltd. at US$2.6 million, each having posted a 10% deposit of US$390,000 and US$260,000 respectively. Their obligations are several and not joint, and the two transactions close simultaneously. A break fee of US$260,000 runs in the bidders' favour, per Second Report of the Proposal Trustee, July 22, 2026, s. 5.1, paras. 1–2(b)–(d), (j).

The arithmetic the union brought

Employees facing a liquidating sale have three places to look, and the union's factum lists them: the Wage Earner Protection Program, the directors' charge up to its maximum, and directors' and officers' insurance up to what the policy will pay, per Factum of the IAM, July 26, 2026, para. 10.

Then it priced each one. If all sixty-six employees received the maximum $9,275 from WEPP against their severance and termination claims, that produces $612,150 of the roughly $1.7 million owed — leaving about $1.1 million. The directors' charge proposed in the motion has a maximum of $725,000, and all vacation pay owed to employees is to be paid out of it. The union told the Court that Field had filed no calculation of what the total vacation entitlement comes to, and estimated from the collective agreement that vacation pay for the bargaining unit alone might run between $200,000 and $300,000 — with roughly as many non-bargaining-unit employees holding similar claims behind them, and possible Canada Revenue Agency claims against the same charge, per Factum of the IAM, July 26, 2026, paras. 11–13.

The conclusion the union drew from its own figures is that once vacation pay and the other claims come out of the charge, there is very likely to be little or nothing left for severance and pay in lieu of notice — nowhere near the $1.7 million, or the $1.1 million that survives WEPP, per Factum of the IAM, July 26, 2026, para. 14.

Which is what made the release matter. Section 251.18 of the Canada Labour Code makes directors of a corporation jointly and severally liable for wages and other amounts where the entitlement arose during their incumbency, and sections 230 and 235 give the pay-in-lieu and severance entitlements the union was counting, per Factum of the IAM, July 26, 2026, paras. 5–9. A release covering the directors would close that route while the charge was being spent elsewhere.