Top court refuses to hear appeal in ABCP case
The Supreme Court of Canada has declined to hear a challenge to a controversial rescue plan for about $32 billion of frozen asset-backed commercial paper (ABCP).
The court's decision not to hear the appeal was handed down at 4:30 p.m. ET after stock markets had closed. As usual, the court gave no reason for its decision.
A group of more than a dozen companies led by Jean Coutu Group filed a brief Sept. 8 asking the court to hear their appeal, arguing the case was of national importance.
They said an Ontario Court of Appeal decision, which upheld a lower court ruling allowing the rescue plan to go ahead, should not be the final word on the case because the affected companies are based in several provinces.
Supporters of the rescue plan told the court earlier that their opponents hadn't raised any issue that would warrant review by the Supreme Court.
About $32 billion of ABCP issued by special non-bank trusts has been frozen for more than a year. Much of it is held by Canadian pension plans, but smaller amounts are held by companies and individuals.
A restructuring plan worked out by a committee headed by Bay Street lawyer Purdy Crawford would issue new notes that will mature in several years and take care of individual investors with less than $1 million in ABCP by enabling them to sell their notes immediately without taking a big financial hit.
Most of the estimated 2,000 individual investors saddled with ABCP are entitled to receive cash for their notes. Those holding more than $1 million worth of notes will get long-term notes that can either be sold at whatever price they can negotiate or be held until they mature.
One of the dissident group's biggest complaints was that the rescue plan would all but remove investors' ability to seek compensation from their financial advisers or others involved with the sale of the ABCP to them — except in cases of fraud.
It also would not compensate mid-sized investors for having to wait to get their money or sell the notes at a discount.
0 comments:
Post a Comment