A Nova Scotia judge approved an application Wednesday to protect Atlantic Canada’s largest newspaper company from its creditors as SaltWire Network Inc. tries to emerge from insolvency with a restructuring plan.
Nova Scotia Supreme Court Judge John Keith also appointed a monitor to oversee the process under the Companies’ Creditors Arrangement Act, which allows financially troubled companies to avoid bankruptcy while drafting a survival plan that ensures creditors receive some payment for what they are owed.
The emergency court hearing was beset by legal wrangling because SaltWire wanted a different monitor than the one suggested by the private equity firm Fiera Private Debt, which has claimed in court documents it is owed $32.7-million, plus almost $600,000 of accrued interest.
SaltWire Lawyer Maurice Chiasson argued that Fiera’s suggestion, a monitor from Toronto-based KSV Restructuring Inc., would be a bad choice because the company has acted as Fiera’s financial adviser since October and has no presence in Atlantic Canada.
Mr. Chiasson asked the judge to appoint a monitor from Grant Thornton’s Halifax office, but Justice Keith rejected that request, deciding KSV would lead the restructuring because SaltWire had earlier entered into a contractual agreement with Fiera regarding the process.
As well, the judge dismissed SaltWire’s claim that KSV had been difficult to work with as Fiera’s financial adviser, saying that strain was natural and he was confident KSV could maintain its impartiality and independence as a monitor.