RPT-Bay Street Week Ahead-The small guy cracks the ABCP whip
April 6th, 2008 | by admin |(Repeats Friday’s column)
By Robert Melnbardis
MONTREAL, April 6 (Reuters) - Irate investors saddled withsome C$350 million of frozen asset-backed commercial paperinvestments want all of their money back, and signs are thatBay Street will have to placate them to prevent the collapse ofits workout plan for all C$33 billion of the strange stuff.
Eight months after the ABCP market choked on creditconcerns, a committee headed by lawyer Purdy Crawford that wasset up to craft a solution has heard a barrage of complaintsabout its plan from small investors.
A quick cross-country roadshow on the plan, known as theMontreal Accord, seemed to wear down even the stoic 76-year-oldCrawford, who as chief executive of former tobacco andfinancial services conglomerate Imasco was one of the fewbusiness chiefs brave enough to answer his own officetelephone.
He prefaced the investor meetings in Toronto, Montreal,Calgary, Edmonton and Vancouver by saying the committee did notcreate the ABCP crisis, but was working hard to fix it.
That did not stop retail investors from blasting thecommittee for working behind closed doors to craft a deal thatwould benefit giant players such as Quebec pension fund managerCaisse de depot et placement while keeping smaller individualand corporate investors out of the loop.
Even though as a group they represent only 1 percent of thevalue of the ABCP that falls under the plan, retail investorsget one vote each just like everyone else, and they faroutnumber the big corporate players. For the restructuring planto pass, a majority of investors at an April 25 meeting need tovote for it.
But by voting in favor of the deal, small investors wouldgive up the right to sue their brokers and banks in return fora promise to get an unknown amount of money back sometime downthe road.
