Canada ABCP holder to seek Supreme Court appeal

Tue Aug 19, 2008 2:56pm EDT
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TORONTO (Reuters) - A mining company that owns asset-backed commercial paper plans to ask the Supreme Court of Canada to hear its objections to a plan to restructure Canada's asset-backed commercial paper market, which was worth C$32 billion ($30.2 billion) before trading stalled last summer.

Howard Shapray, a lawyer who represents Ivanhoe Mines IVN.TO, told Reuters on Tuesday that his client has given the go-ahead for him to pursue an appeal of an Ontario court decision, released on Monday, that supported the restructuring plan.

Various companies including Ivanhoe Mines have argued for months that the ABCP plan illegally takes away their rights to sue banks and brokerages.

The Ontario Court of Appeal dismissed their arguments on Monday, and upheld a June 5 lower court ruling that the plan could go ahead.

Shapray, who is based in Vancouver, British Columbia, said he has "a very strong suspicion" that other companies will join the appeal request, but he added that coordination efforts with other parties are at the early stages.

"My client didn't have any hesitation in saying 'go for it'," Shapray said.

There is no guarantee that the Supreme Court will agree to hear an appeal, but Ivanhoe's intention to request one raises the specter of additional delay for the year-long commercial paper restructuring attempt.

The market for this commercial paper -- asset-backed notes that were issued by third-party trusts, not by the country's big banks -- seized up in August 2007 on credit concerns, freezing investors' funds.

Most of about 2,000 retail investors who own this ABCP are eligible for special repurchase programs.   Continued...