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Insolvency in the Telecommunications Industry: A Canadian Perspective

February-23-2003

Lawyer Jay Carfagnini, Melaney Wagner
Area Corporate Restructuring, Communications

Summary

The collapse of the dot-com market in late 2000 through 2001 left few segments of the telecommunications industry unscathed.  Demand for band-width-related services has declined, as has investor confidence in internet and telecommunications companies.  As a result, Canada, like other parts of the world, has experienced a proliferation of high profile bankruptcies and restructurings of telecommunications companies, with more likely to come.  The unique asset base of telecommunications companies, the regulatory framework and the circumstances surrounding the high tech boom and subsequent collapse lead to unique issues faced by insolvency practitioners upon the collapse of a telecommunications company. 

As a starting point for this paper, we propose to examine, in general terms, the bankruptcy and insolvency laws of Canada and how they operate, followed by a general discussion of cross-border insolvency proceedings.  With this background, we will then address some of the specific laws and issues involving an insolvency in the telecommunications industry as they relate to Canada.

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