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Crawford Will 'Make a Deal' With Debt Holders


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 restructuring.

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.

Overplay Hand

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 crumbling down.''

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 settlement.

"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 they want.''

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:

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