RE: RE: An open letter to Jim Leech and OTPP(i). that solvency clause, as written, should not have been there; (sue the BCE board)
(ii). by invoking it as written, OTPP Consortium is abusing its intent to placate bondholders and not to abort the deal in the event asset valuations declined due to temporary market downturn; (sue OTPP)
To avoid the lawsuits, OTPP should either strike the clause (banks might sue OTPP then) or concede some assets to make the deal go through. If BCE has been buying back a whack of shares and OTPP gives the cash flow to the banks for long enough, KPMG could probably declare the thing solvent. Its the only way to avoid the legal nightmare.
When BCE states they are working with both the OTPP and KPMG I'm sure they are trying not necessarily to change all KPMGs valuations but also how to put more assets on the balance sheet and show them they will have to actually borrow less. ie. figure out a way to make the thing solvent.
If this is what they did, KPMG will OK it and we'll get the $42.75 otherwise no deal.
It really is up to OTPP and BCE. One of the clauses in the contract requires them to do everything in their power to make this deal happen. If OTPP and BCE work to make and make the thing solvent and KPMG still delares it insolvent. Then KPMG is going to get sued. If OTPP and BCE don't make it solvent, then they get sued.
The pressure is on all of them.