Investors Seek To Shelve Sino-Forest Bankruptcy
Lawyers handling a $9 billion class-action lawsuit against Sino-Forest Corp. will ask an Ontario judge on Friday to terminate bankruptcy proceedings involving the troubled timber company, the Toronto Star reported. When Sino-Forest, which is based in Mississauga but operates in China, sought protection from creditors under the Companies’ Creditors Arrangement Act last month, any pending legal actions were essentially put on hold. But a notice of motion put forward by lawyers for investors that include large multi-employer pension funds is asking the judge to consider that “any talk of restructuring, whether by way of liquidation or otherwise, and suggestion that this CCAA process will address ‘the uncertainty created by the (Muddy Waters) report’ is nothing but a façade.” The Muddy Waters report, which came out last summer, accused Sino-Forest of overstating its assets and sales, calling it a giant Ponzi scheme. “It is our position that the CCAA proceedings has not stayed our action against the defendants other than Sino-Forest,” said lawyer Dimitri Lascaris, referring to several banks and auditors Ernst and Young that are also named the lawsuit. Ernst and Young resigned as auditors last week after Sino-Forest filed for CCAA protection. “It is our intention to press forward with those claims against those defendants vigorously,” Lascaris said. Read more.