TORONTO — Canwest Global Communications wants its restructuring to be dealt with quickly but the insolvent media conglomerate is facing stern resistance from U.S. investment firm Goldman Sachs, concerned a multibillion-dollar agreement with Canwest could be jeopardized.
On Wednesday, Canwest made its first appearance in a Toronto court since filing for creditor protection under a mountain of debt. Lawyers for the company set out a timetable that could see it exit the restructuring process by the end of January.
A time line that tight could threaten a major agreement forged between Canwest and Goldman Sachs in 2007 when it paired with Canwest to buy Alliance Atlantis Communications Inc. for $2.3 billion, Goldman lawyer Kevin McElcheran told an Ontario Superior Court judge.
McElcheran said the media conglomerate could use it as a way to pressure Goldman to push for changes to the contract between the two companies, under which Goldman kept the rights to the highly lucrative CSI TV franchise, while Canwest kept the specialty cable channels.
Goldman isn’t willing to renegotiate the agreement — which requires that Canwest’s specialty channels meet certain financial targets by 2011 or face being bought back by Goldman — and will fight any attempts to make changes, McElcheran told court.
However, Canwest lawyer Lyndon Barnes said the plan should be taken into action sooner than later to minimize the effect on employees and operations.
“I think it is conceded by everyone that we are working on an aggressive timetable,” he said.
It was the first time that Canwest, and lawyers for its creditors and others, have appeared in court after the owner of Global TV, the National Post and a group of urban daily papers, filed for creditor protection last week.
The company has nearly $4 billion in debt, incurred mostly when it bought Conrad Black’s newspaper assets in 2000 and a group of specialty channels from Alliance Atlantis in 2007.