Recovering Value

Abstract

This article describes the unusal way that U.S.-based hedge fund Delaware Street Capital crafted a transaction that brings a Canadian steel company in liquidation back to life. Using techniques unprecedented in Canada, the fund has achieved a result many players had given up on after two years of attempts at restructuring. It is a story of investor persistence, operating leadership skilled at managing crisis, and unusual legal creativity and skills. The team of investment, operating and legal professionals who made it happen discuss the challenges each faced in pulling off an intricate transaction, rescuing the operation from liquidation while dealing with an uncooperative seller, the complexity of working with organized labor, an unenthusiastic lender group opposition, and few legal precedents.