January 25, 2017
We are pleased to report that on January 24, 2017, after an all-day cross-border hearing, both the Ontario Superior Court of Justice (Commercial List) and the United States Bankruptcy Court released decisions from the bench unanimously sanctioning the Plans of Compromise and Arrangement in their respective jurisdictions. A copy of the Canadian Sanction Order is available here.
The cross-border sanction hearing followed votes by creditors in both jurisdictions in January. The Canadian vote was held on January 17, 2017 and resulted in 99.7% of creditors in number (99.24% in value) voting in favour of the Plan.
In providing his decision, Justice Newbould of the Ontario Superior Court of Justice recognized the hardship faced especially by former employees, pensioners, LTD Beneficiaries, surviving spouses of former employees and their beneficiaries in the length of time it has taken to get to a settlement and the depletion of assets following successful asset recoveries.
Two dissenting LTD Beneficiaries filed submissions requesting that the Canadian Plan be amended in order to set aside CA $44 million while the court reconsiders the 2010 Employee Settlement Agreement, which they alleged violated their Charter rights. The Canadian Court admitted the submissions of the two dissenting LTD Beneficiaries, however, the Plan was sanctioned without further amendments.
Reasons for the decision will follow and we will post a copy of the reasons of both courts as soon as they are released.
Pursuant to the Plan, Canadian Compensation Creditors are expected to receive a recovery currently estimated as CA 45 cents to 49 cents. The initial distribution is anticipated to be made during April 2017. We will continue to update you as information becomes available.