Canadians Turn To U.S. HFs

Date: Tuesday, April 8, 2008
Author: Hedge Fund Daily

Canadian investors stuck with hundreds of millions of dollars in distressed-debt vehicles are turning to U.S hedge funds and private equity funds to help them out of their trap. The Canadians are willing to part with their voting for a restructuring plan if HFs and PE funds take some C$317 million in frozen commercial paper off their hands, Bloomberg News reports. The Toronto-based law firm Juroviesky & Ricci is handling the matter for several hundred individual investors say it has been considering “non-traditional methods” after a group heading the restructuring effort of the $C32 billion mess said it would not buy out individual investors. Bloomberg says there are at least two U.S.-based HFs that have expressed “serious...interest,” but attorney Henry Juroviesky did not name them. Bloomberg did mention that among the 1,800 individual investors holding the commercial paper are Brian Hunter, Ted McFeely and clients of Cannacord Capital and Credential Securities. The law firm reportedly has hired consultancy Blackmore Partners to seek out possible HF and PE buyers interested in taking on the debt.

 “The value to somebody will be in the voting rights and then later acquisition of the paper,” Juroviesky told Bloomberg. Debt holders will get a chance to vote April 25 on the proposal to swap short-term debt n for notes with nine-year maturity dates.