TORONTO - A heated battle between Canwest Global Communications Corp. and its investment partner Goldman Sachs grew a little more tense on Tuesday when a Canwest lawyer suggested the fight over its specialty television assets could actually hinder the restructuring of the entire company.
Lyndon Barnes told a judge presiding over the media conglomerate's court-supervised restructuring that a disagreement with Goldman over the ownership of its division that holds specialty TV assets is a move by Goldman to gain an unfair advantage in the process.
"It will affect not only people involved, but it's having a detrimental effect on the restructuring," he said.
The media conglomerate filed for creditor protection for portions of its business earlier this fall after it was unable to meet repayment obligations for $4 billion in debt.
Goldman Sachs claims that after filing with the courts, Canwest shifted the TV assets within its operations without consulting Goldman -- which holds a stake in a number of highly lucrative specialty channels which the two companies acquired from Alliance Atlantis in 2007.
The New York-based investment firm has suggested the move could be a way for Canwest's creditors to tighten their control on the specialty channels, which include HGTV, Showcase and Diva.
A lawyer for the Wall Street investment bank said that Goldman wasn't intentionally trying to slow the restructuring process down or complicate the matters facing Canwest by taking its concerns up with the court.
Goldman wants to "undo the manipulation," lawyer Kevin McElcheran told the judge.
The U.S. investment firm also wants to reverse a $426-million payment Canwest made to noteholders before it filed for creditor protection.
In documents filed with the court, McElcheran said Goldman wants the judge to ensure that any future discussions between the two companies be under the stipulation that Goldman retains as much of a say as they had before Canwest filed to put parts of its business under creditor protection.
"This is a necessary first step to any fruitful discussions between the applicants and the (Goldman Sachs) parties," the filing said.
Canwest lawyer Barnes said that Goldman is looking out for "just themselves" instead of other creditors as well.
"They don't like what happened -- most creditors don't like what happened," he argued.
Barnes added that unlike other creditors who are owed unpaid bills or other debts, "Goldman hasn't lost anything at the moment."
