CCRR filing details,
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[Obviously Canwest shareholders would prefer and actual chapter 11 filing be enacted against Canwest, and not Canwest voluntarily giving up ownership.]
"Qutoe," What is the difference between CCAA reorganizations and BIA reorganizations?
Insolvent debtors may also seek to restructure their affairs under the BIA. The essential difference between a restructuring under the CCAA and one conducted under the BIA is that a BIA procedure is primarily a statutory process with strict timeframes, rules and guidelines as set out in the BIA. A CCAA proceeding is more discretionary and judicially driven. Although the proposal process under the BIA provides for an automatic statutory stay of proceedings without a court application (including a stay against secured creditors), the CCAA remains the statute of choice for restructurings of any complexity for debtors that satisfy the minimum C$5-million debt threshold. Debtor companies and other key stakeholders that may support the restructuring process typically prefer the flexibility afforded by the CCAA over the more rigid regime of the BIA."
http://www.blakes.com/DBIC/guide/html/reorganizations_under_the_ccaa.html Blakes
http://www.pwc.com/ca/en/car/what-is-ccaa.jhtml
Quote, "[T]he CCAA presents an opportunity for the company to avoid bankruptcy and allows the creditors to receive some form of payment for amounts owing to them by the company."
[Note, Canwest plan of arrangement prepared before CCRR filing.]
"The Court will issue an Order giving the company 30 days of protection (often referred to as the "Stay") from its creditors to allow for the preparation of the Plan of Arrangement."
[Monitor is not an indepednent third party.]
"A Monitor is an independent third party who is appointed by the Court to monitor the company's ongoing operations and assist with the filing and voting on the Plan of Arrangement. It is not uncommon to see a company's auditors acting as the Monitor."
"The Plan of Arrangement is the proposal that the company is presenting to its creditors on how it intends to deal with debt it owes at the time of the initial filing with the Court. There are no restrictions on what the Plan can entail. It is not uncommon to see offers to pay a percentage on the dollar of debt, either as a lump sum or over a period of time. Plans can include an offer of shares of the company in exchange for the debt outstanding or a combination of cash and shares.
[The 13.5 bonds are unaffected.]
The debtor can identify a particular creditor or group of creditors as "unaffected." Unaffected creditors are included in the Plan and are not to be paid in the normal course. One of the
benefits of the CCAA is that it allows for this flexibility when trying to put together a Plan."
[Canwest shareholders need to vote on this, and exclude the multi voting shares from voting. The one vote Canwest shares have the equity in Canwest, the multi voting shares equity contribution minimal.]
"Ultimately, the company files its Plan of Arrangement and forwards it to the creditors/shareholders. A meeting of the creditors (and shareholders, if applicable) is called to vote on the Plan. For the Plan to be binding on each class of creditors, a majority of the proven creditors in that class, by number, together with 2/3 of the proven creditors in that class, by dollar value, must approve of the Plan presented to them.
If a class of creditors approves the Plan, it is binding on all creditors within the class, subject to the Court's approval of the Plan. If all of the classes of creditors (and shareholders, if applicable) approve the Plan, the Court must then approve the Plan as a final step. Upon Court approval, the company continues forward as outlined under the Plan until it has satisfied the requirements under the Plan."
