Today was the second day of the 'Comeback' hearing for the creditor protection of Canada's three large tobacco companies (Imperial Tobacco, Rothmans, Benson and Hedges and JTI-Macdonald). From the long list of things to discuss that had been circulated ahead of the meeting, only a handful had been aired yesterday.
And with a large cast of creditors with positions to be considered, one might have thought that the day would be full with debate and legal argument. As it turned out, very little happened in open court.
The morning began with lawyers representing the dozen or so interests being ushered to meet (in private) in another court room. A half hour or so later, they emerged and spent an equivalent period caucusing (in private) in the hallways.
It was clear that an agreement was being put into action (in private). Word was out that a deal was being hammered out. Body language became more relaxed. Coats were gathered and about half of the teams began to drift away.
Around noon Justice McEwen came into court, outlined some signposts for the way forward and went through and signed (in public) the changes that each of the tobacco companies was proposing for the Order that would allow it to continue to operate under CCAA protection.
Here is what we were told:
* the items that were not discussed at this session will be picked up again at the next hearing on April 25th.
* on the week of April 15th, Justice McEwen intends to issue his ruling on the Quebec Class Action Plaintiffs' request to alter the order with respect to the companies' ability to seek leave to appeal of the Court of Appeal judgment against them or otherwise manage the impact of the CCAA order on executing that judgment.
* the CCAA orders protecting all three companies have been extended to June 28th.
* a hearing will be scheduled for the end of June (likely June 26th).
By the time the train left Toronto, the 'amended and restated' orders were on the Monitor's websites for Imperial Tobacco and JTI-Macdonald, (The one for RBH was posted somewhat later). These new orders are only modestly altered from the initial versions that were approved (in private) over the past month. Many of the adjustments are housekeeping changes or bring the orders for the three companies into alignment with each other. All now expire on the same day, for example, and they all adopt similar language with respect to the role of Mr. Winkler.
So there it seems it will sit for the next 3 weeks. The 'status quo', as defined in these orders, will continue for a while longer.
The open part of today's hearing was merely an affirmation of the deal that had been brokered in private amongst the parties. The real business was done in private. This, I expect, will be the pattern that continues -- especially when there is an officer of the court whose job it is to hold private meetings with parties and to try to strong arm them into reaching agreements.
Whatever the merits of such an approach for private business, it fits more awkwardly when more than half the parties are governments and when the policy implications are so profound. The status quo that is being maintained, after all, is the same one that is currently responsible for 45,000 annual deaths.
