Group Telecom Initiates $1.5B Restructuring

On June 26, 2002, GT Group Telecom Inc. and its subsidiaries, GT Group Telecom Services Corp. and GT Group Telecom Services (USA) Corp., initiated proceedings under the Companies’ Creditors Arrangement Act (CCAA) to facilitate a financial restructuring with their creditors. The Ontario Superior Court of Justice made an order on that date granting the Group Telecom companies a stay of proceedings and permitting the companies to continue to operate their businesses while they pursue a restructuring. In connection with the CCAA proceedings, an order was sought and obtained under s. 304 of the U.S. Bankruptcy Code granting an injunction against any U.S. creditor proceedings. Group Telecom is Canada’s largest independent facilities-based telecommunications carrier, with a national voice, data and private enterprise network.

Torys LLP is acting for Group Telecom in Canada and the U.S., with a team that includes Tony DeMarinis, Scott Bomhof, Marc Lavigne, Jamie Feehely and Barnali Choudhury (restructuring), James Scarlett (corporate), John Laskin and Patricia Jackson (restructuring litigation), Corrado Cardarelli, John Unger and Ron Nobrega (tax) and Christina Medland (pension, benefits and employment) in Canada, and Bill Gray, Alison Bauer and Edie Walters (restructuring) in New York. The Torys team is working with Group Telecom’s in-house counsel Mark Hemingway.

Group Telecom’s secured lenders, Lucent Technologies as a lender and agent for other lenders in its syndicate, Canadian Imperial Bank of Commerce as a lender and agent for a banking syndicate, and Cisco Systems Capital Canada Co. as a lender and agent for other lenders in its syndicate, are represented by Sheryl Seigel and John Abraham (restructuring and banking) of Fasken Martineau DuMoulin LLP, Kevin McElcheran and James Dube (restructuring) and David Kee (banking) of Blake, Cassels & Graydon LLP, and Ross Walker and Shayne Kukulowicz (restructuring) of Fraser Milner Casgrain LLP.

In the U.S., the secured lenders are represented by Joseph Lubertazzi, Jr., and Lisa DeRose of McCarter & English, LLP in Newark, New Jersey. In Canada, Geoff Morawetz and Rob Chadwick of Goodmans LLP are acting for the court-appointed monitor, PricewaterhouseCoopers LLP. The monitor is represented in the U.S. by Jeffrey Cymbler and Rochelle Weisburg of Angel & Frankel, P.C. in New York.