Law Times

April 30, 2012

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CAREER CHANGE Hospital GC goes solo for first time Follow on www.twitter.com/lawtimes $4.00 • Vol. 23, No. 15 Untitled-3 1 P3 SPEEDING OFFENCES Charter s. 11(b) should not apply P7 FOCUS ON Aboriginal Law COVERING ONTARIO'S LEGAL SCENE • WWW.LAWTIMESNEWS.COM the Ontario Court of Appeal accepted the settlement reached in the asset-backed commercial paper crisis and one that Superior Court Justice Colin Campbell, the judge who initially approved the deal in that matter, will have to answer in deciding whether to do so in relation to three agreements between Hollinger Inc. and each of Torys LLP, KPMG, and various outside directors of the company. But the broad third-party releases built into the ABCP plan Courts grappling with third-party releases H 5/5/10 3:55:30 PM L AW TIMES BY JULIUS MELNITZER For Law Times ow far should a court go in granting third-party releases to facilitate complex, multiparty litigation brought in the context of Companies' Creditors Arrangement Act restructurings? It' s a question that has remained open ever since proved to be the sticking point. The releases operated in favour of most market participants, including ABCP sellers and liquid- ity support and asset providers, all of whom were third parties in relation to the debtor trusts. Without these releases, the plan was a no go as they were the ABCP matter, aggrieved bondholders asked the Ontario Court of Appeal to overturn it. The Court of Appeal took a surpris- ingly long time to release its decision, which it finally did in late August 2008. Although seemingly holding its nose as it did so, the court concluded that the CCAA did give Campbell the power to approve the releases and that he had acted within his discretion in doing so on the facts of this case. Undaunted, the dissidents sought leave to appeal to the sine qua non without which the note holders behind the plan weren't prepared to extend the market-funding facilities at the heart of the restructuring. Less than a month after Campbell' s sanction order in the See Releases, page 5 ntitled-4 1 P9 April 30, 2012 12-03-20 10:44 AM Lawyer concerned about bar orders that raised eyebrows during ABCP matter There's a fundamental difference between the ABCP and Hollinger matters when it comes to the question of third-party releases, says Jason Squire. Photo: Robin Kuniski All eyes on Nortel privilege ruling this week BY KENDYL SEBESTA Law Times C The recent ruling has sent a chill, says Edward Prutschi. legal community over concerns that another ruling in prosecu- tors' favour this week could set a dangerous precedent for the treatment of privilege. "Th is is most defi nitely not a rown attorneys involved in the Nortel fraud trial have cast a deep chill across the province's common occurrence and it rep- resents a very aggressive move by the prosecutor, Prutschi, a partner at Adler By- tensky Prutschi Shikhman. "It's of grave concern, and I think it's a case where a very bright line should be drawn." Crown attorneys in the high- " says Edward profi le trial of former Nortel Net- works CEO Frank Dunn success- fully argued earlier this month that his lawyers, McCarthy Té- trault LLP's Tom Heintzman and Junior Sirivar, were eligible to testify about documents present- ed to the company's audit com- mittee in March 2004. Th e Crown argued that be- cause third parties were present during those proceedings, tra- ditional solicitor-client privilege didn't apply. Th e Crown is also pushing to have records from that meeting subpoenaed, admitted into evi- dence, and used to refresh a wit- ness' memory. Defence counsel have raised concerns that doing so would violate litigation and solicitor-client privilege. proceedings, Dunn, former chief fi nancial offi cer Douglas Beatty, and former controller Michael Gollogly were under investiga- tion by Nortel for accounting ir- regularities. Each has denied the charges against him. Superior Court Justice Frank At the time of the committee Marrocco has reserved his de- cision on the records until lat- er this week but has ordered Heintzman and Sirivar to testify in the meantime. Th e decision came as a shock to many in the province's legal community who worry about the precedent it could set. "Th is is a highly unusual prac- tice and one that judges typi- cally frown upon," says Adam See Legal, page 5 www.lawtimesnews.com KPI_LT_Mar26_12.indd 1 12-03-20 10:58 AM PM #40762529

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