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Goldman Sachs Group Inc. is seeking leave to appeal a lower court's ruling that allowed Shaw Communications Inc. to proceed with its bid to purchase a controlling interest in Canwest Global Communications Corp

Goldman Sachs Group Inc. is seeking leave to appeal a lower court's ruling
that allowed Shaw Communications Inc. to proceed with its bid to purchase a
controlling interest in Canwest Global Communications Corp., alleging that
the restructuring process has been

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TORONTO — Goldman Sachs Group Inc. is seeking leave to appeal a lower court's
ruling that allowed Shaw Communications Inc. to proceed with its bid to
purchase a controlling interest in Canwest Global Communications Corp.,
alleging that the restructuring process has been "corrupted."
According to documents to be filed Wednesday, the Wall Street investment bank
describes the restructuring of Canwest as "error-infected," and is asking the
Ontario Court of Appeal to "intercede now before it is too late to put this
restructuring back on course. . . ."
In a bluntly worded 29-page filing, Goldman claims the proceedings under the
Companies' Creditors Arrangement Act (CCAA) have "involved a remarkable abuse
of the CCAA's process and a total failure of Canwest's corporate governance
for the purpose of extracting the most value possible for the noteholders,
rather than an effort to produce the most viable restructuring consistent
with applicable CCAA protocols and the interests of other constituencies."
As a result, Goldman has asked the appeal court to set aside the approval of a
proposal by Shaw Communications Inc., which offered $95 million for at least
20 per cent of Canwest Media Inc. (CMI), which holds the company's television
and specialty channels. Under the Shaw terms, the Calgary-based cable giant
would own 80 per cent of the voting shares.
Goldman and Toronto-based Catalyst Capital Group had bid $120 million for 32
per cent of CMI, but that proposal was rejected by the major creditor group
that owns most of Canwest's senior debt and a court-appointed monitor on Feb.
19. That same day, Justice Sarah Pepall granted Shaw the right to proceed
with its bid.
However, Shaw's deal is conditional on the repudiation of the 2007 shareholder
agreement between Canwest and Goldman that saw both companies acquire 13
specialty channels from Alliance Atlantis Communications for $2.3 billion.
Goldman has protested vehemently that it has been excluded from Canwest's
restructuring efforts because the ad hoc committee of senior debt holders are
seeking a "commercial objective" through the CCAA by trying to undermine the
investment bank's claim over the highly profitable channels.
According to the legal documents, Goldman claims Canwest's debtholders
have "functionally held a hammer over Canwest's directors" and are "dictating
every move, rather than the directors fulfilling their fiduciary duties to
manage Canwest's affairs to achieve the best restructuring plan for the long
term."
Goldman has asked the appeal court to direct Canwest to consider other
proposals that were "wrongly" rejected, and to negotiate with Catalyst, whose
offer Goldman argues is "clearly superior" to Shaw's bid because it offers
comparable net value to Canwest's creditors and avoids costly, protracted
litigation.
© Copyright (c) Canwest News Service -
http://www.canada.com/news/Goldman+Sachs+tries+stop+Shaw+from+controlling+Canwest/2663522/story.html

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