By Doug Alexander
March 26 (Bloomberg) -- A lawyer who
spearheaded a C$32- billion ($31.4 billion) restructuring plan for
Canadian asset- backed commercial paper says he's willing to "make a
deal'' with disgruntled individual investors to win their support.
"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,'' Purdy Crawford said after a speech today to
the Canadian Club of Toronto. "I can't say what the deal will be, I can
just tell you we'll make a deal.''
A group of institutional investors, led
by Crawford, spent more than six months on a plan to convert the
short-term debt into notes that mature within nine years. Noteholders
will vote on the plan on April 25, with majority support needed for the
proposal to succeed.
Some individual investors have said
they'll reject the plan because they can't wait years to get their money
back on investments that were supposed to mature in 30 to 90 days. The
debt holders include more than 1,700 investors who bought C$317 million
in commercial paper from Canaccord Capital Inc. and Credential
Securities Inc., two Vancouver-based brokerages.
"We'll do what we can for those retail
investors,'' Crawford said. Work is already going on, "not by us but by
others,'' Crawford said. He declined to elaborate.
He wouldn't comment on whether the
largest institutional investors such as the Caisse de Depot et Placement
du Quebec should bail out individual investors.
The market for commercial paper sold by
non-bank dealers ground to a halt in mid-August after investors were
concerned about possible ties to U.S. subprime mortgages. Companies and
individual investors have been unable to trade or cash out of their
investments ever since, while Crawford's committee pursued the
A group of individual investors, led by
Brian Hunter and Ted McFeely, has retained Toronto law firm Juroviesky &
Ricci LLP to provide legal advice.
Lawyer Henry Juroviesky said his
clients are "loathe to support a plan that would force them to accept a
longer time frame to access funds they placed in short-term savings
products on the advice of their brokers.''
Juroviesky's goal is to negotiate an
agreement in which investors can sell their notes immediately for the
full value, he said. Hunter said in a March 24 interview that he and
other investors would support the plan if the pension funds and other
large holders agree to buy his debt.
Crawford said he's worried individual
investors may "overplay their hand'' in trying to strike a deal.
"They know they have some power and
they're not going to hesitate probably to use it,'' he said. "My main
concern is that they'll overplay their hand and the thing will come
Murray Candlish, a retired Alberta
farmer who invested C$350,000 in the debt, said he's "a wee bit
surprised'' by Crawford's comments and is "cautiously optimistic'' on a
"Nobody wants this C$32 billion to fall
into the tank,'' Candlish, 51, said. "We're asking for a simple 1
percent of the value of the whole deal to ensure them that they get what
Crawford's group plans to meet
investors in Toronto and Montreal on March 31, followed by meetings in
Edmonton and Calgary on April 1 and in Vancouver on April 2.
National Bank of Canada, which is part
of the group trying to restructure the debt, is "very optimistic that
noteholders will approve the plan,'' Ricardo Pascoe, co-chief executive
officer of the firm's investment bank, said today at an investor
conference in Montreal.
To contact the reporter on this story:
Doug Alexander in Toronto at
Last Updated: March 26, 2008 16: