Twin Butte Energy Ltd TBTEF

RE:Pari Passu

[Oldfart74]

pablo87 wrote: I read the indenture, I can't see any language that states the debbies were subordinated to unsecured creditors. So unless unsecured creditors are now considered "senior debt", can't see us debbies losing that one.

I do believe some more recent debentures have specifically stated that debbies are subordinate to unsecured but that wasn't the case for TBE - honestly I don't think they contemplated bankruptcy at the time (with $100 oil and all).  So they're basically trying to rewrite the debenture. Why? The Buddie system - don't want their supplier friends losing any money whereas who cares (as we found out from the original Reignwood offer) for debentureholders?

Even then, I have a problem with a debenture that subordinates to unsecured.  If the debentureholders had legal representation, who would agree to that? Nobody. It wouldn't be like unsecured would be protesting.  So its a kind of legal incompetence at best that allows such a situation to be created in the first place.  As a matter of fact, most of the private subordinated debt where the lender has representation (such as pension plans - see Cequence debt to CPPIB), the paper looks a lot more like bank paper with covenants, protections, etc... than it does to unsecured.

The only difference between debentures and that pension plan paper? Genuine legal representation.

TBE is one the rare cases where the debenture holders have representation.  Read the motion materials on the FTI website.  Good arguments by Bennett Jones.