{"id":19621,"date":"2012-09-04T12:52:00","date_gmt":"2012-09-04T16:52:00","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=19621"},"modified":"2012-09-04T12:52:00","modified_gmt":"2012-09-04T16:52:00","slug":"ylo-cbca-for-now","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=19621","title":{"rendered":"YLO: CBCA, For Now"},"content":{"rendered":"

Tim Kiladze of the Globe and Mail reports<\/a>:<\/p>\n

Yellow Media\u2019s hopes of amending its restructuring proposal have been smacked down by a Quebec court just days before the company faces a vote on its much-criticized plan.<\/p>\n

Early last week, Yellow Media put together a conference call to threaten that it would seek creditor protection in order to reduce almost $2-billion of debt should stakeholders vote against its current restructuring proposal. Those efforts were shot down just a few days later by judge Robert Mongeon, who delivered his ruling just a few hours before the long weekend started.<\/p>\n

The sequence of events is a bit tricky to follow, but the gist of the story is that Yellow Media\u2019s restructuring proposal has been filed under the Canada Business Corporations Act (CBCA). Last week, Yellow Media chief executive officer Marc Tellier tried to complicate the matter by amending the current resolution to implement the plan through the Companies\u2019 Creditors Arrangement Act (CCAA) if the current effort \u201cappears for any reason impracticable.\u201d
…<\/b>
Judge Mongeon didn\u2019t let that language influence him. \u201cI am of the view that the proposed amendment should not be part of the process currently envisaged under the CBCA inasmuch as it deals only with another proceeding under a different statute and which is, at this time, purely hypothetical.\u201d<\/p>\n

He explained his reasoning in detail. First, the judge noted that even Yellow Media admits that the proposed amendment isn\u2019t necessary to pursue arrangement currently up for debate under the CBCA. Second, the CBCA and CCAA have different tests of admissability and different procedures, so having one proposal technically apply to both would be very tricky.<\/p><\/blockquote>\n

I am, of course, not a lawyer, but it’s my understanding<\/a> that the CBCA is for solvent companies and the CCCA is for insolvent ones. Different admissabilities indeed!<\/p>\n

I have previously recommended that preferred shareholders should vote against the plan<\/a>:<\/p>\n

YLO has four series of preferred shares outstanding: YLO.PR.A, YLO.PR.B, YLO.PR.C and YLO.PR.D. I recommend that preferred shareholders vote against the plan, on the grounds that they are being treated as if they have all be forcibly converted into common at the YLO.PR.A \/ YLO.PR.B rates prior to the conversion of the old common into new securities. That\u2019s reasonable for YLO.PR.A and YLO.PR.B, but not so much for YLO.PR.C and YLO.PR.D, which are not convertible by the company. And, even for the A & B holders \u2013 you\u2019re not getting paid to vote yes, so why give it away? If the company wants a yes vote from you, they should provide a little sweetener; the offer that\u2019s on the table is already a worst-case scenario.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Tim Kiladze of the Globe and Mail reports: Yellow Media\u2019s hopes of amending its restructuring proposal have been smacked down by a Quebec court just days before the company faces a vote on its much-criticized …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-19621","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19621","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19621"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/19621\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}