Group urges court to okay ABCP restructuring plan

By Frank Pingue

TORONTO, May 12 (Reuters) - The group spearheading a C$32 billion ($31.7 billion) restructuring plan for Canada's nonbank asset-backed commercial paper market said in court on Monday that overwhelming approval should be enough to see the plan through.

The plan still needs the approval of Ontario Superior Court Judge Colin Campbell, who will hear challenges from those who oppose the plan during a two-day sanction hearing expected to wrap up on Tuesday.

The restructuring group's lawyer told the court the plan, approved at a meeting on April 25 by 96 percent of noteholders, wasn't amendable and the only other option would be to liquidate the notes.

"Everyone is in this together," lawyer Benjamin Zarnett told the court. "And the right way to look at this is 96 percent are in favor and 4 percent are against it."

Some companies oppose the plan since it includes legal releases that grant most key ABCP players -- mainly asset providers, liquidity providers, sponsors of the trusts, banks and dealers -- immunity from lawsuits.

The committee that drafted the intricate plan, which took eight months to develop, said the legal releases must remain intact or the deal could fall apart.

Some companies also allege they were misled about what assets were backing the commercial paper.

"Noteholders could not have voted at all if there was not enough information or they could have voted 'no' if they thought there wasn't enough information," Zarnett told the court. "They did neither."