Lexpert US Guides

40 | LEXPERT • June 2018 | www.lexpert.ca/usguide each of the companies. In Canada, the process is just simpler. We can file any number of companies in one order, even if there are foreign ones. We have one affidavit. One appearance. And orders made on the first day are final. You don't have to keep going back." He estimates the process under the CCAA "took half the time and cost a third of the money." Brendan O'Neill, who had previously spent six years working as a restructuring lawyer in New York, couldn't agree more. "Chapter 11 can take too much time and cost too much in legal fees," he says. "We had suppliers who were threatening to cancel contracts if the matter wasn't resolved. And every dollar out the door was a dollar out of our jeans." He calls the Pacific Restructuring, "a triumph for Canada and its Restructuring laws. at's the real story here. We needed the most efficient process possible and we were convinced the CCAA was the best way for that to happen. On a domes- tic level, the CCAA is a good forum for Restructuring. On an international level, if you have a Canadian parent, the CCAA is also an excellent forum. It's a point of pride that the CCAA was able to handle this just like it handled Nortel and many other significant transactions. It's an option I definitely suggest others consider when applicable." "Under Colombian law, a Superintendent was appointed, who potentially had the power to take over the company and run it as a Receiver would. If that occurred, "you lose a lot of control and that's very bad for business," Brendan O'Neill, Goodmans LLP Insolvency the wheat from the chaff. He kept this on track while being firm but fair to everybody." One of the matters Justice Newbould ruled on was an attempt by EIG Global Energy Partners "to launch a hostile takeover of the bonds," says O'Neill. "ey tried to derail the trans- action and buy up all the bonds and tried any number of things. [But Newbould] didn't allow it. He said we weren't going down that road. He really was a big part in saving the company." In mid-2016, following an auction, Pacific selected a proposal by Canada's Catalyst Capital Group Inc., which had the support of more than 75 percent of the company's noteholders and lenders, well in excess of the two-thirds majority required. Achieving a support agreement that could be taken to the CCAA as a package the company and its creditors had agreed to, and said they were willing to vote in favour of, was "very challenging," says O'Neill. He referred to it as "financial emergency room surgery." Angela Libby agrees: "It was one of the most complex and challenging matters I have ever seen," she says, adding that the complex- ity, however, helped motivate the parties towards reaching a solution. "When you have that interplay between the various jurisdictions and legal issues and a very big capital structure, it can have the effect of driving consensus because people realize that rather than getting caught up in inter- creditor disputes, you need to collectively work together to make sure you're coming up with the best solution." Under the final agreement, a debt- for-equity plan was arrived at. Almost all of Pacific's debt was cancelled and all previous shareholders were removed. "Basically, what people got in exchange for their debt were shares in the new company," says O'Neill. ere was an immediate need for $500 million to keep the company operating, which was raised equally from bondhold- ers and from Catalyst, "which led the operational restructuring of the company," he says. ere were also changes made to Pacific's corporate governance, a new Board of Directors was named and a new CEO and CFO appointed. In June 2017, to help create a new start for the firm, Pacific changed its name to Frontera Energy Corporation. "I think my client was very happy with the outcome," says Tony Reyes. "e company was able to keep functioning and a lot of jobs were saved." Reyes was also particularly pleased with the decision to file the matter under the CCAA. "Under Chapter 11, you might have a dozen orders, some interim, and you have to go back to get final orders and you have to separate proceedings for

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