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144 Canada | Restructuring and insolvency Leading lawyers Mark Bain Bruce Barker Paul Blundy Davies Ward Phillips & Vineberg The projects group at Davies Ward has traditionally been focused on infrastructure, with a balanced practice between lender and sponsor in the PPP market. In a year when the Canadian government has adopted a similar focus, the firm has received consistent mandates in the sector and peers have taken notice. The recent addition of Nicholas Williams from rival Ogilvy Renault is also viewed by competitors as a significant gain for the practice. As a consequence of these developments, Davies makes the jump into the second tier following strong client and peer feedback. “I’m a sponsor equity investor and basically, for every project that I run, my personal preference is to work with the Davies team whether it’s here in Canada or the US,” says a client. Representing returning client Plenary Health, Davies Ward advised in connection with the developer’s winning bid for a DBFM greenfield medical facility in St Catharines, Ontario. Robert Bauer and Steven Martin advised Plenary in what was the largest PPP deal completed by Infrastructure Ontario upon its closing. “I’ve used Davies on every project I’ve run since 2004. As a result of my using them so much, and their knowledge base, they’re probably one of the best teams for what I do. Very responsive, very good people, and we get along well together. I consider them part of my team,” comments a client. Leading lawyers Robert Bauer Steven Martin Carol Pennycook Nicholas Williams Fasken Martineau Fasken Martineau’s representations of project lenders has earned them a solid reputation in the market with peers. Benefiting from more than the occasional carryover of work from its standard banking practice, the projects group at Fasken has established itself through assignments like lender’s counsel in the redevelopment of the Niagara Health System. Plans for the $759 million public-private greenfield medical facility in St Catharines, Ontario reached financial closing in March 2009. The lending syndicate for the project included TD Securities, RBC Capital Markets, BMO Capital Markets and Société Générale. In the www.iflr1000.com ongoing PPP funding of the construction of 18 new schools throughout the province of Alberta, Fasken is again advising the lending syndicate. With $643 million in committed financing, the international syndicate includes the Sun Life Assurance Company, Manulife Financial, Canada Life, Bank of Ireland, Sumitomo Mitsui Banking, National Australia Bank, TD Bank (Toronto- Dominion Bank) and BMO (Bank of Montreal). Active in both transactions, partners Brian Kelsall and Ella Plotkin have already proved significant to the practice since their arrival at the firm in 2007. All this lending work is not to say that Fasken is a stranger to Canadian project sponsors, however. Closed in February 2009, the firm negotiated an $89 million financing package for RMSenergy Dalhousie Mountain’s development of a wind farm in Nova Scotia. Leading lawyers Jon Holmstrom Brian Kelsall Ella Plotkin Ogilvy Renault The recent departures of Jacques Demers to the private sector and Nicholas Williams to rival Davies Ward are viewed by competitors as significant blows to the projects team at Ogilvy Renault. In their absence much of the onus for the practice’s future has been shifted onto the shoulders of Merie-Anne Beavis, who competitors advertise as a very knowledgeable projects lawyer. Despite this shifting of personnel, Ogilvy’s clients give similar praise for the level of service available through the firm’s projects team. “They’re very high quality and they’re a top notch organisation,” says one client of the firm. Ogilvy represented Dexia Crédit Local and Depfa Bank in structuring the $206 million lending agreements for the PPP making additions to the Royal Jubilee Hospital. Working for the lenders, Ogilvy lawyers negotiated the DBFM project with ISL Health General Partnership and the Vancouver Island Health Authority. In other lender work, Ogilvy represented Manulife Financial, Sun Life Assurance Company, Great-West Life, and Industrial Alliance Insurance and Financial Services in the $200 million financing for the Bruce Nuclear Generating Station A. Leading lawyers Merie-Anne Beavis Robert Borduas Stikeman Elliott Drawing from its strong banking practice, Stikeman Elliott saw a number of lender representations cross over into the projects sector this year. In representing RBC Dominion Securities as the underwriter, Stikeman negotiated the $266 million in bond financing behind the PPP construction of Northwest Anthony Henday Drive in Edmonton. Stikeman also represented Dexia Crédit Local, Depfa Bank and the Bank of Ireland in arranging financing for the development of a new hospital facility in Surrey, British Columbia. One client describes the firm’s work as excellent in M&A and PPPs (public-private partnershships). “They certainly know their stuff. They’ve been extremely helpful, and they were able to save us quite a bit of money compared to the firm we used previously,” says the client. “I’ve worked with them twice as sponsor’s counsel on two PPP projects and looking forward to hiring them again on the next one.” Leading lawyers Michael Allen Erik Richer La Flèche For analysis of the other leading law firms in Canada’s project finance market please visit the website at www.iflr1000.com Restructuring and insolvency Recommended firms Tier 1 Goodmans Tier 2 Bennett Jones Blake Cassels & Graydon McMillan Ogilvy Renault Osler Hoskin & Harcourt Stikeman Elliott Tier 3 Borden Ladner Gervais Davies Ward Phillips & Vineberg Fasken Martineau Fraser Milner Casgrain Gowling Lafleur Henderson McCarthy Tétrault ThorntonGroutFinnigan The restructuring of Canada’s ABCP (assetbacked commercial paper) market occupied much of the restructuring talent at law firms here throughout the last year. In January 2009, the long-negotiated settlement between the concerned financial institutions and investors was finally enacted, prompting an 2010 EDITION
Restructuring and insolvency | Canada 145 exchange of the original $32 billion in nonbank commercial paper for longer-term notes. Unlike the neighbouring US market, the ABCP matter was one of the few restructuring matters to take place in the financial sector. Instead, it has been the ailing forestry sector providing many of the marquee filings. Filings in 2008 for Tembec and Pope & Talbot have given way to filings by Ainsworth Lumber and Smurfit-Stone Container Corporation in the new year. Insulation from the write-downs suffered by financial institutions abroad hasn’t meant Canadian banks are any more willing to assume lending risks. In fact, the avoidance of losses like those seen in New York and London may have only made them more discerning. This has created a scenario where banks have to reconcile risk aversion with the uncertainties of recouping investments through foreclosure and subsequent liquidation. “Banks are becoming hesitant to put bullets into companies” says one restructuring partner. The scarcity of available financing has also impacted on filing options for debtors in Canada recently. A previous, if not typical, emphasis on CCAA (Companies’ Creditors Arrangement Act) proceedings has given way to a flurry of filings under the CBCA (Canada Business Corporations Act). Ainsworth Lumber and Tembec, two of the largest filings this year, followed the CBCA model, which supporters tout as an alternative to CCAA court costs and the restraints of courtappointed monitors. Disadvantages do exist, however, as CBCA does not provide restructuring protections for a company and the process largely favours entities restructuring debt holdings. One positive impact of the economic downturn may be the growing experience of courts across the Canadian provinces in handling restructuring and insolvency matters, levelling what had been an emphasis on filing in Toronto. “You just decide to file where it makes the most sense,” says one partner. The restructuring of multinational companies has also led courts in the US and Canada to conduct simultaneous restructuring proceedings, placing an emphasis on cross-border experience for Canadian law firms. Paper-maker Smurfit-Stone stands as the most recent example of this type of co-ordinated proceedings. Goodmans Goodmans sets the standard for restructuring and insolvency work in Canada. “They have the biggest and deepest insolvency practice in Canada,” says a peer. “They definitely deserve to be in a class by themselves.” Goodmans’ restructuring practice is the exception to its smaller physical presence as a firm. A stable of talent, led by Jay Carfagnini, has established the firm’s reputation for handling the most complex and urgent matters for both debtors and creditors. “They have a number of good senior lawyers, including Jay Carfagnini. They’re all first-rate lawyers,” says a competitor. Another remarks of Carfagnini: “The best kind of lateral big thinker and bigpicture lawyer is Jay Carfagnini at Goodmans.” The resolution of the $32 billion assetbacked commercial paper (ABCP) market restructuring stands as the foremost example of Goodmans’ abilities. Representing the financial institutions making up the Pan- Canadian Investors Committee, the firm negotiated what is the largest debt restructuring in Canadian history through the exchange of short-term paper for note holdings with longer maturities. But even with one of the larger roles in the ABCP matter, Goodmans was able to land representations in other high-profile cases throughout the year, such as AbitibiBowater and Ainsworth Lumber. Working for the bondholders committee of AbitibiBowater, Goodmans lawyers aided in the development and implementation of a $1.4 billion refinancing in the face of approaching debt maturities. Similarly, the noteholders of Ainsworth Lumber hired the firm in connection with the wood products company’s recapitalisation process. This reorganisation under the CBCA led to the issuance of $200 million in senior unsecured notes and an $824 million debt exchange. Leading lawyers Jay Carfagnini Robert Chadwick Brendan O’Neill Joseph Pasquariello Bennett Jones Bennett Jones is renowned in the Canadian market for its representations of creditors and noteholders. Rick Orzy and Kevin Zych are recognised by peers as unquestioned leaders of the overall practice, present on files for Ainsworth Lumber, Nortel Networks, Quebecor World and Smurfit-Stone Container Corporation in the last year. But despite this flurry of recent activity, peers note an increasing number of conflicts of interest that have sent work to rival firms. In the CCAA proceedings for Quebecor World and Smurfit-Stone, Bennett Jones landed the roles of advising the committees of unsecured creditors for both companies. Filing for protection in January 2008, printer Quebecor World is attempting to restructure an estimated $3 billion in debt commitments. One year later, in January 2009, the paper maker Smurfit-Stone entered into simultaneous CCAA and Chapter 11 proceedings in Canada and the US with the hope of refinancing the company’s $4 billion in debt holdings. Noteholder work includes Bennett Jones’ advice to the cross-border noteholder group in the Nortel Networks bankruptcy. With an estimated $4.5 billion in outstanding debt, the telecom products manufacturer filed for Canadian and US bankruptcy protections in January 2009. Leading lawyers Rick Orzy Kevin Zych Blake Cassels & Graydon Drawing from a highly-regarded banking practice, peers agree that Blakes has built one of the foremost DIP (debtor-in-possession) financing platforms in Canada. The ongoing CCAA proceedings of Pope & Talbot exemplify this, with Blakes advising Ableco Finance as the lender. Following Pope & Talbot’s inability to produce a plan of arrangement, Blakes has advised Ableco in securing its $250 million investment from the lumber company through asset sales of land holdings and pulp and saw mills. Susan Grundy is recommended by peers for her influential presence on files such as Pope & Talbot and Smurfit-Stone Container Corporation. Retained by JPMorgan Securities in early 2009, Blakes is advising the bank in its role as DIP lender for Smurfit-Stone. Following Smurfit-Stone’s CCAA and Chapter 11 filings in Canada and the US, Blakes helped establish a $750 million cross-border financing package of term and revolving credit facilities. Similar lending work is being done by the firm in the cross-border insolvency proceedings for Progressive Moulded Products. Blakes again represents JPMorgan Chase as administrative agent for a syndicate of lenders. Leading lawyers Susan Grundy William Kaplan Steven Weisz Ogilvy Renault Large debtor filings like Quebecor World and Nortel Networks have given the restructuring group at Ogilvy Renault a busy year. And the sudden rush of activity hasn’t gone unnoticed by peers. “Ogilvy is on a bit of a tear at the moment,” says one competitor. As leader of 2010 EDITION www.iflr1000.com
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