Toronto lawyer Purdy Crawford and the committee tasked with fixing Canada’s asset-backed commercial paper (ABCP) market received a rough welcome Monday morning as they kicked off a national tour to sell retail investors on a plan to salvage some of the $32-billion in ABCP frozen since August.

He faced dozens of angry and suspicious investors at the Metro Toronto Convention Centre, some of whom may have lost a portion of their entire life savings and were eager to put their questions to the committee.

Investor Walter Kushnir set the tone by addressing Crawford directly, outlining the personal losses he had suffered and lamenting the lack of representation for retail investors in the process. “I didn’t understand 80% of what was said here,” he said. “Why is that? I’ll tell you why. The process was not fair, and the result was not fair.”

Kushnir’s comments reflected the general feeling among retail investors, who had no representation when the proposal to restructure the ABCP market was being discussed. Under the proposal, committee members and institutions involved will not face losses, while retail investors are encouraged to sign an agreement forfeiting their right to sue for damages in the future in a effort to recoup some of their investment. Investors have been warned that those who do not sign the agreement risk losing everything.

An estimated 1,800 retail investors are thought to hold approximately $350 million in paper. The committee has called for new asset-backed notes to be issued in place of the locked-up notes, but retail investors would be looking at five to seven years for the new notes to mature. Alternatively, they could trade them in an as of yet undisclosed secondary market, but would likely fetch little of the original worth of the notes.

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When asked directly by a lawyer representing a group of investors how much they can expect to salvage if they do not sign the deal, Crawford was blunt: “No money is going back to the investors.” He would also not be pinned down on the estimated value of the notes should they be traded on an alternative market, and when an investor described the notes as “ruined,” Crawford replied: “It’s an overstatement to say they are ruined. A perfect plan would get 100% of everybody’s money back today. That is not in the cards.”

Investors will get to vote on the restructuring proposal on April 25. In the meantime, Crawford and the committee will visit Montreal, Calgary, Edmonton, and Vancouver this week to meet with investors and explain the restructuring program.

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