Last Friday, Canada's Supreme Court dismissed last-ditch attempt to restructure country's $32 billion ABCP market.
The Supreme Court of Canada issued an order dismissing a challenge by a group of corporate bondholders that are opposing the restructuring plan of the country's ABCP market that was reached in June.
The Sept. 19 ruling brings Canada's ABCP saga "to a near close." This will allow several thousand retail and institutional investors to receive their redemptions by the end of October.
Unlike in the U.S., where settlements with sellers of auction rates were the result of extreme pressure applied by state attorney general investigations in New York, Massachusetts and Missouri, Canada's asset-backed restructuring followed a consolidated piece of litigation that rapidly moved through both the country's insolvency regime as well as the federal court system, in a remarkably swift six months.
Fasken Martineau DuMoulin LLP served as counsel to a group of 20 debtor trusts that included several major U.S. banks and trust companies involved in the financial restructuring.
Fasken corporate partners Xeno Martis, who is based in Montreal, and W. Alfred Apps, who is based in Toronto. Both co-directed the firm's role in the restructuring and commented on the of the impact of the latest decision.
"The Court's ruling may have been typically understated but no one following this case missed the tremendous significance of the judges' decision not to hear the bondholders' appeal, which for all practical purposes, ends this unprecedented saga in Canada's capital markets," Martis said.
Thanks to the courts decisions, Canadian insolvency law now affords one of the most flexible structures for creative corporate restructurings in the world, Apps. said. This is one of the very few 'good- news' stories coming out of the financial world these days.