OTTAWA (Reuters) – The Canadian investors committee that hammered out a restructuring plan for C$32 billion ($30 billion) of asset-based commercial paper, asked the Supreme Court of Canada on Friday not to hear a challenge of the deal.
The ABCP market seized up in August 2007 as part of the broader credit crunch, and a small group of noteholders is objecting to the restructuring, designed to help investors recover at least some of their money.
That group asked the country’s top court on Tuesday to hear an appeal of a lower court decision that backed the restructuring plan. But the investors committee told the Supreme Court in a written submission on Friday that it should not hear the appeal.
“The vast majority of noteholders agreed with the business judgment that the benefit of the plan is worth the cost,” the committee said.
The “cost” of the benefits is a requirement in the plan that investors give up their right to sue banks and brokerages. This is opposed by investors holding less than 3 percent in value of the ABCP.
The market for third-party asset backed commercial paper — notes that were not issued by the country’s big banks — collapsed in 2007 on credit concerns, freezing investors’ funds.
Both sides in the case have asked the Supreme Court to decide quickly.
($1=$$1.06 Canadian) (Reporting by Randall Palmer; editing by Rob Wilson)