Tuesday, November 03, 2009

 

Uh oh. Rude awakening for Canwest

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Goldman Sachs says Canwest made secret moves to shutter specialty division
THE CANADIAN PRESS/John Woods
CKNW - Nov. 3, 2009

Read the full column HERE.

TORONTO - A legal fight between U.S. investment bank Goldman Sachs and insolvent Canwest Global Communications Corp. is brewing after Goldman filed court documents suggesting creditors of the media conglomerate have been making moves without telling them.

The allegations centre around a numbered company created by Canwest at the request of Goldman to hold the specialty TV assets the Winnipeg-based company bought from Alliance Atlantis in 2007.

Goldman says that company disappeared in the days before Canwest filed for CCAA protection in Canadian courts on Oct. 6, and it believes the decision was made by its U.S. and Canadian creditors.

The Wall Street firm is also concerned that the move could be a way for creditors to tighten their control on the highly lucrative specialty channel assets, which include HGTV, Showcase and Diva.

The specialty channel division was not one of the pieces of Canwest that filed for creditor protection when the conglomerate could not meet repayment obligations for $4 billion in debt.

{Snip) ...

Goldman isn't willing to renegotiate the agreement - which requires that Canwest's specialty channels meet certain financial targets by 2011 or face shifting back into the hands of Goldman - and will fight any attempts to make changes, McElcheran said.

At that time, he suggested the judge should carve out the Goldman Sachs agreement from the rest of the restructuring process.

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