A plan of arrangement for the restructuring of Canadian Airlines $3.5 billion debt that had been filed with the Court of Queen’s Bench of Alberta on April 25, 2000, has been rejected by the Senior Secured Noteholders who are now moving for the appointment of a receiver over the key operational assets of Canadian Airlines failing repayment of all obligations owed to them. Unsecured Noteholders owed over US$500 million have alerted the courts that they are also dissatisfied with the proposals and will be bringing a number of complaints to the court, including an action for oppression. Under the proposed plan, the Senior Secured Noteholders’ principal would be cut to $162 million and the interest rate reduced, Unsecured Noteholders are being offered 12 cents on the dollar. The plan is supposed to be voted on May 26, 2000 however it appears that further negotiation will take place prior to this time.
Bennett Jones is representing Canadian Airlines in the proceedings with a team led by Patrick Brennan and which includes David Lennox, Neil Stevenson, Alan Rubin, Paul Farion, W. Chipman (Chip) Johnston, Mitchell Williams, Jon Truswell, Kenton Rein, Jason Marino and Debbie Bryden (commercial), Darcy Moch (Tax), John Gulak and John Kousinioris (Corporate) and Martin Kay, Q.C., Anthony Friend, Q.C., and Richard Low, Q.C., on the litigation side. Sean Dunphy, Eliot Kolers (litigation), Ron Ferguson, Josée Gravel (corporate) Simon Romano (Securities) and Robert Hogan (tax) of Stikeman Elliott are acting for Air Canada in the arrangements. Frank Foran, Q.C., and Patrick McCarthy, Q.C., of Borden Ladner Gervais LLP are acting for the monitor, PriceWaterhouse Coopers, in the court proceedings. Robert Chadwick and Geoffrey Morawetz of Goodman Phillips & Vineberg are acting for Senior Secured Noteholders in the court proceedings and Derrick Tay of Meighen, Demers is acting for the Unsecured Noteholders.