Basically a CCAA process can only begin on the equity owners request, so what was the benefit to shareholders to get nothing
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http://www.vancouversun.com/Deal+reached+Canwest/3194585/story.html
"Vice-president of public affairs for Canwest, defended the $11-million payment on the grounds it was made "outside" the CCAA process, with Shaw effectively agreeing to purchase the outstanding shares in a separate transaction."
"He said the payment was being funded by Shaw and that it did not dilute the amount of money set aside for unsecured creditors, such as suppliers, employees and retirees, when Canwest announced its deal in February."
But Shaw was reluctant to make the payment because of how unsecured creditors would react.If enough take issue with it, they may decide to vote against the deal at the July 19 vote. [Canwest shareholders have never voted on this or the CCAA filing.]
Read more: http://www.vancouversun.com/Deal+reached+Canwest/3194585/story.html#ixzz0rnAMjamy
"Rules within Companies' Creditors Arrangement Act state that "no compromise or arrangement that provides for the payment of an equity claim is to be sanctioned unless it provides that all claims that are not equity claims are to paid in full before the equity claim is to be paid." [Verification of rule needed.]
"Therefore, shareholders are last in line, if in line at all, and some are questioning how and why the ad hoc group is receiving millions of dollars when Canwest and Shaw have set aside only $38 million for unsecured creditor claims, or about 30 cents on the dollar." [? other equity claims, fraud]
Read more: http://www.vancouversun.com/Deal+reached+Canwest/3194585/story.html#ixzz0rn8nhi64
