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In preparation for the implementation of the plan, which would mean issuing new notes and converting the existing notes into new plan notes, Duchesne says he and his colleagues are confirm- ing information on hundreds of issues, making sure the new custodian has enough information to issue the notes and reviewing the applications for one of the three new master asset vehicle is- sues, the MAV 1. Alfred Apps, an insolvency lawyer with Fasken Martineau DuMoulin LLP in Toronto, who is representing 15 of the 21 issuer trusts that are the debtors in the application, says Canada's largest restructuring proceeding was creative in a number of respects. One of the initial issues lawyers dealt with was the conver- sion of the issuer trustees from federally regulated trust companies into num- bered Canadian corporations, which took place immediately prior to the CCAA filing and was approved by the judge as part of the initial order. "That was the first hurdle to overcome: how do you qualify for CCAA protection?" he says. As there were so many trusts and se- ILLUSTRATION: JOE WEISSMAN the liquidity problem affecting the mar- ket, agreeing to a long-term proposition known as the Montreal Proposal. Agree- ing to a 60-day standstill period during which each party would continue to roll its ABCP and where outstanding third- party ABCP would be converted into floating rate notes maturing no earlier than the underlying assets. The pan-Canadian committee's "plan of compromise and arrangement," cov- ering 20 of the 22 trusts in the Montreal Proposal (the Skeena Capital Trust was restructured last December, and the De- vonshire Trust is under discussion to undergo a separate restructuring) was submitted to the court in mid-March. The plan calls for the original 30- and 60-day notes to be restructured into long-term plan notes set to mature in as many as nine years. The matter has since been subject to a CCAA process before Ontario Superior Court Justice Colin Campbell in Toronto after the trusts were granted protection under the CCAA in March. In addition to the legal negotiations around the standstill agreement, one of the main business issues initially was identifying the noteholders, a difficulty because of confidentiality provisions, says Marc Duchesne of Borden Ladner Gervais LLP in Montreal, lawyers for monitor Ernst & Young LLP. ries of notes, lawyers also had to deal with establishing relatedness in order to file a "consolidating plan," combining the trusts into two new vehicles, as well as ensuring that in so doing, they could have simply one class of creditors, rather than separate classes by each trust. Then came the issue of the numerous retail creditors — those with less than $1 million in ABCP — and how their treatment could be differentiated. Al- though most of the third-party ABCP was held by institutional investors and corporations, each investor was given one vote in the restructuring and there were reportedly as many as 1,800 re- tail investors holding the asset. "This is critical, because under the Companies' Creditors Arrangement Act, you not only have to have two-thirds of the debt voting in favour of the plan, you have to have a simple majority in absolute numbers. And since there were so many retail creditors, if they were not going to www. C ANADIAN Law ye rmag.com JULY 2008 59