Ainsworth Lumber Completes US$1.2 Billion Recapitalization

On July 30, 2008, Ainsworth Lumber Co. Ltd., a leading manufacturer of engineered wood products, including oriented strand board (OSB), completed a US$1.2 billion recapitalization transaction pursuant to a plan of arrangement under the Canada Business Corporations Act. The transaction involved the exchange of US$824 million of debt for new equity and warrants and US$150 million of new senior unsecured notes, and the issuance for cash of US$200 million of new senior unsecured notes.

Ainsworth was represented in Canada by Blake, Cassels & Graydon LLP with a team led by Bill Sirett, which included Steve McKoen, Kathleen Keilty, Ryan Goodman and Greg Smith (corporate and securities), David Zacks, Neal Wang and Samantha Richer (banking), Robert Kopstein, Janette Pantry and Kirsten Kjellander (tax), Jason Gudovsky (competition), Caroline Findlay and Selina Lee-Andersen (forestry), Greg Umbach and Jennifer Williams (real estate), Sue Grundy and Milly Chow (restructuring and insolvency) and Bill Kaplan and Sean Boyle (litigation).

Ainsworth was represented in the United States by Skadden, Arps, Slate, Meagher & Flom LLP with a team that included Christopher Morgan, Ryan Dzierniejko and David Beeston (securities), David Armstrong (banking), Joseph Nisa (competition), Van Durrer II (restructuring and insolvency) and Eric Sensenbrenner and Aaron Feinberg (tax).

The special committee of the board of directors of Ainsworth was represented by John Smith and Michael Lee of Lawson Lundell LLP. UBS Securities Canada and Barclays Capital acted as financial advisors to Ainsworth.

HBK Master Fund L.P., an Ainsworth noteholder and backstop party, was represented in Canada by Bennett Jones LLP with a team that included Kevin Zych, Raj Sahni and A.L. Friend, QC, (restructuring), Jeffrey Kerbel, Ian Goldberg and Kristopher Hanc (corporate and securities) and Stephen Bowman and Daniela Evtimova (tax). HBK was represented in the United States by Kramer Levin Naftalis & Frankel LLP with a team that included David Feldman and Joshua Brody (restructuring) and Eric Wise, Ernest Wechsler, John Bessonette, Elan Daniels, Theodore Sica, Robert Wollin and Alyssa Katz (corporate).

Tricap Partners II L.P., a noteholder and backstop party, was represented in Canada by Torys LLP with a team that included Tony DeMarinis and Adam Slavens (restructuring), Cornell Wright, Michael Siltala, Jay Holsten, Omar Wakil, Jennifer Lennon and Jon Reay (corporate and securities), Amanda Balasubramanian and Nadine Rockman (banking), and Corrado Cardarelli and Richard Johnson (tax). Tricap was represented in the United States by Paul Weiss, Rifkind, Wharton & Garrison LLP with a team that included Alan W. Kornberg, Raphael Russo, Margaret A. Phillips, Stanislav Grigoryev and Rebecca Zubaty.

Certain other noteholders and backstop parties were represented by Goodmans LLP with a team that included Rob Chadwick, Melaney Wagner, Tim Heeney and Carrie Smit.

The note trustee, The Bank of New York Mellon, was represented in the United States by Seward & Kissel LLP (Andrew Silverstein and Issac Yedid) and in Canada by Lang, Michener LLP (Peter Reardon and Sheryl Seigel).

Concurrently with the recapitalization, Ainsworth amended three credit facilities representing approximately US$175 million in senior secured and unsecured debt. The syndicate of senior secured lenders under the Goldman Sachs facility was represented by Fasken Martineau DuMoulin LLP with a team that included Jon Levin, John Elias, Don Weaver, Ian Cassie, Kevin Clinton and KC Miu and by McDermott Will Emery LLP with a team including John Sullivan, Vladimir Rossman and Laura Gardner.

The Bank of New York Mellon (the new administrative agent and collateral agent under the Goldman Sachs facility) was represented by Jonathan Thalheimer of McGuire, Craddock & Strother, P.C.; BNY Trust Company of Canada was represented in-house by George Bragg; and Goldman Sachs was represented by Andrew Faye of Latham & Watkins LLP.

GE Canada Finance Holding Company was represented by Kevin McElcheran and James D. Gage of McCarthy Tétrault LLP. Deutsche Bank Luxembourg SA was represented by in-house counsel Frieder Bauer and David Mellgard.