National Bank of Canada moved Wednesday to refute the allegations made in motions presented in the Ontario Superior Court of Justice by a group of corporate clients that invested in non-bank asset-backed commercial paper (ABCP).
“The bank believes that the difficulties in the ABCP market stem from a global liquidity crisis that erupted last summer and that it is going well beyond its legal obligations to protect its clients during this crisis,” National Bank said in a news release.
“The bank is acting entirely in good faith on this matter since, like many other financial institutions, it had itself acquired ABCP and is therefore affected like its clients,” it added.
An Ontario Superior Court has extended the bankruptcy protection period for the currently frozen $32 billion in ABCP until after noteholders vote on a proposed restructuring plan.
The court extended the protection until May 30.
A committee chaired by Bay Street lawyer Purdy Crawford has been working since last August on hashing out a restructuring plan for the frozen notes. The controversial proposal has been tabled and noteholders are scheduled to vote on the plan April 25.