A Toronto law firm representing some of the retail investors holding asset-backed commercial paper (ABCP) has announced its clients’ intention to use “non-traditional methods” in an effort to recoup some of their lost investments.
Henry Juroviesky, managing partner of Juroviesky and Ricci, says that after failing to persuade the Pan-Canadian Investors Committee to reimburse investors through moral persuasion, he was now soliciting bids from U.S.-based private equity and hedge funds with the aim of auctioning the retail holders’ voting and economic rights.
“The impression we gleaned from the Pan-Canadian committee was that they felt that they had no moral duties to the class of retail investors, and that a deal, that even if forthcoming, would most likely only benefit the persons needed to secure a successful vote on the restructuring,” he says.
“Accordingly, we felt that in order to maximize value for all our clients, we needed to look at creative ways to enhance the value of their notes,” he adds. “We feel that an auction of all my clients’ economic interests would add significant value to those looking for an alternative to the proposed restructuring.”
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Juroviesky says Blackmore Partners, a cross-border consulting firm representing buyers and sellers in the capital markets, has been retained in order to broker a sale of his clients’ economic stake in ABCP at the highest possible value.
“Blackmore will be qualifying buyers and handling the sales process,” he explains. “We already have preliminary expressions of interests to purchase our clients’ interests, and we are expecting these offers to increase as this process gathers steam.”
Under the structure proposed by Blackmore Partners, all noteholders would authorize Juroviesky and Ricci to vote their proxies for them in a voting trust, and a winning bidder would have the right to direct the voting trust to either vote for or against the Pan-Canadian sponsored CCAA proposal.
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