Now the media coverage of ABCP retail investors has become a bit of a frenzy.
It has become hard to keep up with it all. Some respected (or at least widely
syndicated) columnists have have even started to write columns and offer
opinions on the topic.
There has been a remarkable twist to the story. Each noteholder has a vote on
the bankruptcy. By most accounts, there are some 1400 retail noteholders that 'own'
only $270 million of this paper, out of $33 billion that is frozen. Each of these
noteholders has a vote. Most of this bad ABCP debt is held by big players in Canada's
financial community. The retail investors outnumber the big guys 15:1.
Collectively, this means creditors that are owed less than 1% of the debt could scupper
the $33 billion Pan-Canadian barge. The banks will not like this. The country's largest
pension fund will not like this. Certain investment dealers across the country should look
for a new line of work.
The barge would sink, and the members of the committee would have to demonstrate
that they know how to swim.
Diane Francis wrote a
blog that later appeared as a column in the National Post. It rates amoung the best.
An estimated 1,500 individual and corporate retail investors have been
left holding the bag on more than $900-million worth of junk credit they should
never have been allowed to buy in the first place had Canada's regulators,
laws and intermediaries done a proper job.
Terence Corcoran, the editor of the Financial Post, saw it in a
different way. He claimed this Facebook group is actually 'a clever group of investors'
… 'Exploiting that leverage (of the CCAA)' … 'to turn the ABCP sinkhole into a gold mine.'
With all due respect Mr. Corcoran, if your idea of a gold mine is breaking even on a
30 day deposit a year after it matures, and only after fighting like hell to accomplish
that, then I will have to change my opinion on your opinions.
Most of the press coverage has been very supportive. The story is getting out there,
and we are happy for it. We thank all of the journalists credited here. Here are some
of the best from last 10 days.
Canadian ABCP investors bullied
Diane Francis
Blog, National Post
March 27, 2008
Investors seek solace in Facebook
Sean Silcoff
Financial Post, March 26, 2008
Credit union's position worries investor
No indemnity for lost investment made through Credential Securities
Fiona Anderson
Vancouver Sun, Saturday, March 22, 2008
Canadian Hog Farmers, Pastors May Block Debt Plan (Update2)
By Doug Alexander and Sean B. Pasternak
Bloomberg, March 20, 2008
Small noteholder stokes revolt against ABCP deal
John Greenwood
Financial Post, Thursday, March 20, 2008
Investors face a Catch-22
Owners with frozen savings can lose money -- or spend money
BY FIONA ANDERSON, Vancouver Sun
Thursday, March 20, 2008