Goldman appeal slowing Canwest recap

With the L.A. Screenings and Shaw's deadline getting closer, broadcaster looks to court for 'certainty' on its future

Canwest Global has secured agreement from an Ontario court to expedite hearings on a Goldman Sachs & Co. motion to annul Shaw Communications’ bid for control of the broadcaster should it successfully restructure.

The fast-tracking decision Wednesday from Ontario Court of Appeal Justice Harry LaForme follows Canwest in a March 19 filing with the appeals court arguing it is unable to ‘materially advance’ its recapitalization or finalize terms with creditors as long as the U.S. investment bank’s appeal, filed on March 9, is left hanging in the air.

Canwest argued the motion has stirred uncertainty in the market that could lead suppliers to renegotiate contracts with the broadcaster, exacerbate an exodus of top executives, and impact the broadcaster’s buying at the upcoming Los Angeles Screenings.

‘With certain of next season’s foreign television programming rights to be determined in or around May 2010, the [Canwest Media] entities need certainty regarding whether the Shaw transaction will proceed as soon as possible,’ the court filing argued.

To retain senior newspaper executives, especially after Canwest LP head Dennis Skulsky signaled his departure, Canwest asked the court for permission to pay out around $5 million to retain existing managers to avoid hiring and training replacements.

Canwest also reminded the court that time was of essence as Shaw’s recapitalization offer needs completion before Aug. 11, by which time necessary regulatory and creditor approvals must be secured.

‘Shaw may not agree to extend the outside date and the Shaw transaction would automatically terminate,’ Canwest told the Ontario court.

In its own court filing, Goldman Sachs accused Canwest Global of trying to keep the Wall Street financier at bay as the Canadian broadcaster restructures.

‘This motion is yet another example of applicants’ practice of failing to cooperate,’ Goldman Sachs managing director Gerald Cardinale told the Ontario court.

‘Applicants’ gamesmanship has typified the entire bankruptcy proceeding from the outset,’ he added.

The Court of Appeal for Ontario will next hear motions in the Canwest Global restructuring on March 29.