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ARTICLE · 19 NOVEMBER 2010

The Canwest Story

Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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While credit bidding has an established history in Canada, there is little case law on the topic. The Companies’ Creditors Arrangement Act (CCAA) proceedings of the Canwest Publishing Group (Canwest) provide the best and most recent example of the considerations in a credit bid, including the establishment of a fair process for the stakeholders.

CanadaInsolvency/Bankruptcy/Re-Structuring
Pamela Huff
Pamela Huff
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Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Restructuring & Insolvency, November 2010

While credit bidding has an established history in Canada, there is little case law on the topic. The Companies' Creditors Arrangement Act (CCAA) proceedings of the Canwest Publishing Group (Canwest) provide the best and most recent example of the considerations in a credit bid, including the establishment of a fair process for the stakeholders, no matter how unique.

In this case, all three motivations for credit bidding were at play. The senior lenders (owed approximately C$950-million) were prepared to put forward a credit bid as a stalking horse in order to encourage a higher offer in an auction process. If that offer did not materialize, the senior lenders were prepared to own, hold, and sell in the future, to avoid an immediate loss on their investment. The unsecured noteholders (owed approximately US$400‑million) were prepared

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