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Head of Canada ABCP plan to woo retail investors

Wed Mar 26, 2008 2:53pm EDT

By Lynne Olver

TORONTO, March 26 (Reuters) - A deal is possible to bring on board disgruntled retail investors who object to a proposal to restructure Canada's C$32 billion ($31.4 billion) non-bank asset backed commercial paper market, the leader of the restructuring effort said on Wednesday.

"Every step of the way, we've made deals and we're not going to be held up by a lack of ability to deal with difficult situations," lawyer Purdy Crawford told reporters after addressing a business lunch in Toronto.

"We'll do what we can for those retail investors," Crawford said, but gave few additional details.

An estimated 1,800 retail investors who own non-bank ABCP that froze up last August have the power to thwart a painfully crafted restructuring, which proposes to convert existing notes from 20 trusts into longer-term notes that would not mature for several years.

A meeting to vote on the ABCP restructuring plan is set for April 25, and each noteholder has one vote, regardless of the size of their investment. A majority must approve the deal for it to proceed to court approval.

Crawford declined to say whether any extra money would be made available to satisfy some retail investors, who argue they can't wait years to recover their funds, or where such funds might come from.

"I don't think they were treated unfairly, but I think they have a very strong perception that they were, and so we have to deal with that," Crawford said.

He said repeatedly that he empathized with them, but added, "if this isn't approved, they'll sure as hell get punished, at all levels."

In his remarks during the Canadian Club lunch, Crawford said that the goal all along has been to avoid a firesale of assets, and he remains optimistic about the "arduous" restructuring process. He said he did not know how much support the plan has among retail investors.

"We knew that these people would be at the table eventually," once the committee of large investors driving the restructuring decided to use the Companies' Creditors' Arrangement Act to complete the plan, Crawford said.

"They know that they have some power ... my main concern is they'll overplay their hand."

Some of the retail investors have banded together and hired law firm Juroviesky & Ricci LLP to try to negotiate a better deal.

Crawford said a series of investor meetings on the restructuring plan will begin next week.

"We'll make our case, and the voters will have to decide, just like a democracy."

($1=$1.02 Canadian) (Editing by Rob Wilson)

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