Philip Services Completes Cross-border Restructuring

Philip Services Corp. (PSC) and its US and Canadian subsidiaries completed a cross-border US$2 billion restructuring on December 31, 2003. New York-based High River LP invested in excess of US$170 million as part of the global restructuring.

PSC and its US subsidiaries filed for Chapter 11 protection in the US on June 2, 2003. On September 19, PSC and certain of its US subsidiaries commenced ancillary proceedings in Canada under s. 18.6 of the Companies’ Creditors Arrangement Act (CCAA). A number of PSC Canadian subsidiaries also commenced proceedings under s. 18.6 on the same day and Ernst & Young Inc. was appointed interim receiver of certain assets of the Canadian subsidiaries of PSC, with a limited mandate. The restructuring was concluded by a plan of reorganization being approved in the US and a sale by E&Y of substantially all the assets of the Canadian subsidiaries to PSC Analytical Services Inc. and PSC Industrial Services Canada Inc., newly formed subsidiaries of restructured PSC.

PSC was represented in Canada by Stikeman Elliott LLP, with a team led by Daphne MacKenzie (corporate restructurings) and Elizabeth Pillon (insolvency and litigation), and included Lewis Smith, Lisa Houston and Jill Lankin (corporate), Lorna Cuthbert (pension and employment), Larry Cobb (environmental), John Lorito (tax) and Debbie Salzberger; and in the US by Sonnenschein Nath & Rosenthal LLP in New York and Chicago, with a team led by Peter Wolfson and Robert Richards, and included Benjamin Wolff, III, Denise Tormey, Paul Housey, Richard Sadowsky and Pia Thompson.

High River was represented by in-house counsel Marc Weitzen and Yevgeny Fundler; in Canada by Osler, Hoskin & Harcourt LLP, with a team led by Steven Golick (insolvency) and Eden Oliver (corporate), and included Marc Wasserman and Michael De Lellis (insolvency), Jeremy Dacks (litigation), Katy Waugh (corporate), Daniel Kirby (environmental), Evan Howard and Damian Rigolo (pension and employment), Gregory Wylie and Alex Pankratz (tax), Richard Pratt and Robert Antenore (financial services), George Valentini, Adrian Hartog and Jack Cook (real estate) and Peter Franklyn and Anna Balinsky (competition); and in the US by Brown Rudnick Berlack Israels LLP in Boston, with a team led by Jeffrey Jonas (insolvency), and included Andrew Strehle (insolvency and banking), Douglas Cohen (environmental) and Phil Flink, James Bedar and Katherine Haffner (corporate).

The E&Y team was led by in-house counsel Kevin Brennan and Leslea Gordon, and included Shelly Meadows and Jerri Beauchamp. E&Y was also represented by Goodmans LLP, with a team led by Joseph Latham (insolvency), and included Jessica Berry, Adam Larry and Derek Bulas (insolvency), Glenn Ernst (tax), Frederick Myers (litigation), Joel Schachter (corporate) and Ken Herlin (real estate).

Wells Fargo Foothill, Inc., agent for the senior secured creditors, was represented in Canada by Davies Ward Phillips & Vineberg LLP, with a team that included Nicholas Leblovic (corporate), James Doris (litigation and insolvency), Jay Swartz (insolvency), Marc Shewchun (corporate) and Matthew Milne-Smith (litigation); and in the US by Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd. in Chicago, with a team that included Randall Klein and Dimitri Karcazes. Fleet Capital provided replacement financing, and was represented by Vinson & Elkins LLP in Dallas, with a team that included James Markus and Alexis Dixon.