August 15, 2008
The Ontario Court of Appeal has
announced that its long-awaited decision on the asset-backed
commercial paper workout will be released after markets close on Monday,
Aug.18, at 5 pm.
That's little more than a year since the $32-billion market froze up in
light of the credit crunch and led to a massive restructuring effort by
the Pan Canadian Investors Committee.
The appeal court will rule on whether or not Ontario Superior Court
Justice Colin Campbell was right to OK a restructuring package, which
would see retail investors be paid out, while corporate investors and
pension funds take a hit in their investments in the commercial paper.
At issue is whether or not Justice Campbell was correct in ruling that
the workout could proceed with broad releases that would bar investors
from suing the banks and brokers that sold them the paper and the rating
agency that gave it high grades.
In the U.S., investment banks were forced by regulators to take
similar-type investments, known as auction-rate securities, back onto
their books and reimburse investors for their losses and pay hundreds of
millions of dollars in fines for the way the investments were sold.