Sino-Forest Completes Restructuring Transaction

Sino-Forest Corporation (“Sino-Forest”) completed a restructuring transaction pursuant to a plan of compromise and reorganization under the Companies' Creditors Arrangement Act (Canada) (“CCAA”) and the Canada Business Corporations Act (the “Plan”) which was approved by its creditors and confirmed by the Ontario Superior Court of Justice.

The implementation of the restructuring transaction involved, among other things, Sino-Forest transferring substantially all of its assets to a newly formed entity (“Newco”) owned by the affected creditors of Sino-Forest in exchange for a release of the claims of affected creditors against Sino-Forest and its subsidiaries. The affected creditors of Sino-Forest were comprised primarily of holders of approximately US$1.8 billion of outstanding notes issued by Sino-Forest. Under the Plan, Sino-Forest's outstanding shares were cancelled on March 4, 2013 and Sino-Forest has ceased to be a reporting issuer under Canadian securities laws.

The assets transferred pursuant to the restructuring transaction included all of the shares of Sino-Forest's directly owned subsidiaries which owned all of the business operations of Sino-Forest. The assets transferred to Newco did not include certain litigation claims of Sino-Forest against third parties which were transferred to a litigation trust (the “Litigation Trust”) established to pursue such claims, certain cash amounts used to fund the Litigation Trust, and certain cash reserves established under the Plan.

Sino-Forest became the subject of class action litigation and securities regulatory inquiries in mid-2011 following publication of a third party research report that, among other thing, asserted that the company's public disclosure was not accurate. Following an internal investigation led by an Independent Committee of the Board, Sino-Forest initially sought and obtained protection from its creditors pursuant to the CCAA on March 30, 2012, in accordance with a restructuring support agreement entered into with an ad hoc committee of its noteholders (the “RSA”). The RSA provided for the material terms of a transaction which would involve either a sale of Sino-Forest to a third party or a restructuring under which the affected creditors of Sino-Forest would acquire substantially all of the assets of Sino-Forest. In accordance with the RSA, Sino-Forest sought and obtained an order from the Court under the CCAA approving a sale solicitation process pursuant to which Sino-Forest's financial advisor, solicited from third parties offers to purchase substantially all of Sino-Forest's assets. In July 2012, Sino-Forest announced that none of the bids submitted pursuant to the sale solicitation process constituted acceptable bids under the sale process procedures and announced that Sino-Forest was proceeding to implement the restructuring transaction contemplated by the Plan.

Sino-Forest was represented by Bennett Jones LLP with a team including Kevin Zych, Raj Sahni and Sean Zweig (restructuring); Robert Staley, Michael Eizenga, Derek Bell, Alan Gardner, Rebecca Huang, Jonathan Bell, Preet Bell and Amanda McLachlan (litigation); Gary Solway and Kris Hanc (corporate/securities/M&A); Claire Kennedy and Anu Nijhawan (tax) and Adam Kalbfleisch (Investment Canada Act); with King & Wood Mallesons, including Helena Huang (corporate/restructuring) and Jonathan Lee (corporate) and Tony Dong (tax), serving as counsel in the People's Republic of China and Hong Kong. Linklaters served as Hong Kong counsel.

The Board of Directors of Sino-Forest and the Independent Committee of the Board of Directors of Sino-Forest were represented by Osler, Hoskin & Harcourt LLP with a team including Jean Fraser, Chris Murray (corporate); Edward Sellers (restructuring) and Larry Lowenstein, Geoffrey Grove (litigation) and Shelley Obal (research). Malleson Jaques (as it then was), including Stuart Valentine, and Jun He, including Kirk Tong, served as Hong Kong and PRC Counsel, respectively, to the independent committee.

The Ad Hoc Committee of Noteholders of Sino-Forest was represented by Goodmans LLP with a team including Robert Chadwick, Brendan O'Neill, Logan Willis and Caroline Descours (restructuring); Tim Heeney, John Connon and Gail Jaffe (corporate); Jeffrey Citron (finance); Carrie Smit and Mitchell Sherman (tax) and Benjamin Zarnett and Julie Rosenthal and Caterina Costa (litigation) and Joel Schachter (Investment Canada Act); with Hogan Lovells serving as Hong Kong and US counsel. The Hogan Lovells team was led by Neil MacDonald and included Allan Wardrop, Stuart Tait, Shantay Cong and Derrick Lau (Hong Kong finance); Tim Fletcher, Charles Butcher and Kitty Lam (Hong Kong corporate and commercial); Chris Winckler, David Cohn and Greg Hafkin (US law); Jason Kaplan and Roberta Chang (tax) and Roy Zou and Hongjie Gao (PRC corporate and commercial).

The Monitor in the CCAA proceedings was FTI Consulting Canada Inc. The Monitor was represented by Gowling Lafleur Henderson LLP with a team including Derrick Tay and Jennifer Stam (restructuring); Clifton Prophet (litigation); Stephen McKersie (corporate) and Ash Gupta (tax).