|Canadian Investors Push to Delay C$32
By Doug Alexander and Sean B. Pasternak
April 10 (Bloomberg) -- Some Canadian companies saddled with commercial
paper that hasn't traded since August are pushing to delay a vote on a
C$32 billion ($31.5 billion) restructuring plan because they need more
time to study it.
"I think the vote has to be postponed,'' said Peter Linder, a Calgary
lawyer representing seven junior oil and gas companies with more than
C$100 million of the insolvent debt. Linder said he will apply for an
extension "imminently'' in Ontario Superior Court.
A group of institutional investors spent seven months drafting a plan to
restructure asset-backed paper that stopped trading after investors
shunned the debt on concerns about ties to U.S. subprime mortgages. The
plan proposes to swap the 30- to 90-day paper into notes maturing within
nine years. It requires the support of a majority of noteholders, as
well as investors holding two-thirds of the face value of the debt.
Some investors say they only received the 360 pages of documents this
week, and need more time to review them before the April 25 vote.
Investors surrender the right to sue the brokers that sold the debt if
they vote in favor of the plan.
"A request for an extension is reasonable and likely,'' said Colin
Kilgour, a consultant advising investors holding the paper. "An extra
month or so to make sure everyone has the opportunity to review and
understand the situation is prudent.''
The investors' group, led by Toronto lawyer Purdy Crawford, submitted
its plan covering 20 trusts to an Ontario court on March 17, and
received bankruptcy protection for the investments.
Not Enough Time
Crawford's group has "not given the other noteholders enough time and
information to properly respond to this filing,'' said Linder, who
declined to name his clients.
"The material was late coming out,'' Kilgour said. "It's very
complicated and many of the folks, particularly the folks who haven't
had a buyout offer, still need to consider their options.''
Canaccord Capital Inc., a Vancouver-based brokerage, agreed yesterday to
lead a bailout of 1,430 individual investors that may ensure their
support for the plan. Canaccord and unidentified investors agreed to buy
back as much as C$138 million in restructured notes at par. The bailout
applies to 97 percent of Canaccord investors, who hold C$1 million or
less, and excludes 43 clients holding a combined C$130 million.
Universal Uranium Ltd., a Vancouver-based miner with C$1.4 million in
frozen debt, is talking to the companies that aren't covered by the
Canaccord plan to consider legal action.
"My full-time job today is to call around to the 3 percent that's left
over and find out what they're going to do,'' Executive Vice President
Bill Galine said in a telephone interview.
Some individual investors are also looking to postpone the vote,
according to their lawyers. Toronto lawyer Arthur Jacques said he plans
to ask the court for a delay to give his clients more time. Jacques is
collaborating with Juroviesky & Ricci LLP, a Toronto-based law firm
hired by Calgary investors Brian Hunter and Ted McFeely.
David Weiner, a spokesman for the Crawford group, said there are no
plans to delay the vote.
To contact the reporter on this story: Doug Alexander in Toronto at
firstname.lastname@example.org; Sean B. Pasternak in Toronto at +1-
Last Updated: April 10, 2008 13:42 EDT
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