www.lexpert.ca/usguide | LEXPERT • June 2018 | 39
O'Neill, a partner with Goodmans LLP
in Toronto. O'Neill led the restructuring
process on behalf of Ad Hoc Committee
of Noteholders and DIP Lenders, who
held the majority of the debt. O'Neill
told Lexpert: "By using Canada's highly
flexible and efficient CCAA process as the
main process, with ancillary proceedings
in the United States under Chapter 15 of
the United States Bankruptcy Code and
under Ley 1116 in Colombia, the company
and its stakeholders were able to complete
a highly complex and multi-jurisdictional
reorganization in approximately 4 months
of court time — a result that could not
have been obtained had other jurisdictions
served as the lead or main jurisdiction."
Many of the players were not familiar
with the CCAA, which had rarely been
employed in Canada prior to the mid
1980s. "Chapter 11 is very much a rules-
based system," says Robert ornton, a
partner with ornton Grout Finnegan
LLP, which served as counsel for PwC, the
court-appointed Monitor. "Whereas, the
CCAA is what we call a principle-based
system, in which principles and guidelines
are set out but a great deal of flexibility is
given to the judge. ere's a fundamental
difference between the two approaches.
In Canada, a judge is usually willing to
approve an outcome if the process was
open and transparent and everybody got
a fair shake. In the United States, they're
more concerned about price. If someone
comes in with a better offer on the court
steps, then it's okay to have top-up bids
come in at the last minute."
e issue of jurisdiction, or COMI (the
Centre of Main Interest of the debtor),
resulted in many "tense negotiations," says
O'Neill, especially during negotiations
with the Colombian regulators. He made
numerous trips to Colombia and, at one
stretch, "worked every day for 30 days" on
the case, which involved about 20 lawyers
at his firm. "We were very insistent that
this be filed in Canada, which we believe
has a much more efficient, predictable and
less litigious Restructuring regime. When
you're dealing with a pre-packaged case, as
we were here, that was very important."
It also took considerable time and effort
to convince the American parties of the
benefits afforded by the CCAA. "ere
was a big battle about which forum this
should be filed in," says O'Neill. "We had
a lot of New York law firms who were
involved in the debt who wanted to file
under Chapter 11." Reyes recalls meetings
in New York "with maybe 60 people in the
room, a bunch of noteholders and banks.
ere were some tense moments and some
harsh words. Had we lost the cooperation
of the majority of one of those groups it
would have been much more difficult
[to achieve a successful outcome] than it
was."Ultimately, all parties agreed that
Canada was, indeed, the COMI, and that
the matter would be best resolved under
the CCAA.
"is was the first time ever that there
had been a three-jurisdiction filing with
those three jurisdictions," says ornton.
It also marked the first time Colombia
had ever recognized a foreign court in a
Restructuring case.
"I think the CCAA served the credi-
tors purposes exactly like they were
hoping it would," says Angela Libby, an
associate with Davis Polk & Wardell
LLP in New York City, which acted as
administrative agents for the Bank of
America. Adds O'Neill: "At the end
of the day, we were proven right to use
the CCAA because the Canadian court
dealt with us very efficiently."
O'Neill attributes a lot of the success
to Frank Newbould (now retired), a
judge of the Ontario Superior Court of
Justice, and to the fact that Toronto has
a dedicated list of commercial judges who
hear CCAAs.
"Justice Newbould is an incredible
judge with immense experience," he says.
Justice Newbould "knows how to separate
