Ontario court suspends Canwest sale

Justice requests parties to resolve how creditors will be paid

TORONTO -- An Ontario court on Tuesday held up the $2 billion sale of Canwest Global Communication Corp.'s insolvent TV assets to Shaw Communications to resolve how unsecured creditors will be paid out.

Justice Sarah Pepall of the Ontario Superior Court, which is directing Canwest Global through creditor protection, told lawyers for the broadcaster, Shaw and an ad hoc group of disgruntled shareholders to reach an equitable settlement.

"I think it's ridiculous that we're here today," Justice Pepall told a Toronto courtroom as she considers whether to approve the Shaw takeover of Canwest Global's TV assets.

"It's in everyone's interest to resolve the outstanding issues," she added.

Those issues include how to dole out a pool of $38 million pledged to unsecured creditors at Canwest Global, including company retirees and suppliers, that so far are to receive no more than 30 cents on the dollar.

The unsecured creditors include former Canwest Global CEO Leonard Asper, who earlier asked the court to order a new 30-day auction of Canwest Global's TV assets to secure a higher valuation than the $2 billion bid placed on the table in May by Calgary-based cable operator Shaw Communications.

As part of Canwest Global's proposed recapitalization that Justice Pepall must approve for the broadcast to emerge from creditor protection, around $440 million is due to the Canadian media group's primary creditors, with $38 million going to unsecured creditors.

John Douglas, a Canwest Global spokesman, offered no timeline on when current negotiations to properly compensate unsecured creditors may be resolved.
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