There's something compelling from a generational perspective about the latest chapter in Catalyst Paper's bid to carry on as an industrial force in B.C.
A determined bunch of pensioners with shrewd lawyers played an important role in getting the company's restructuring plan approved Monday, the second time around.
The first restructuring plan presented to creditors failed last month because a couple of U.S. investment funds tried a power play. Catalyst's plan to continue operating three mills in Powell River, Port Alberni and Crofton was obviously in the best interests of the workers, the communities and Vancouver Island. But the hedge funds holding some of Catalyst's debt tried to block it, just to squeeze a few more cents on the dollar out of the process.
It's just an assumption on my part, but I picture some youngish MBAs executing this hardball manoeuvre with a certain attitude. No hard feelings if your mills close and get sold for scrap, and communities suffer. It's just business.
They blocked the approval of the plan last month by a thin margin and it looked like their mercenary approach had won. Catalyst Paper showed little inclination at first to contest the result. It put itself up for sale as the process dictated. A breakup of the company - with huge uncertainty for thousands of people - became a real possibility.
Except the pensioners decided to fight back. They are retired salaried staff of all the predecessors that have owned Catalyst properties in years gone by - MacMillan Bloedel, Fletcher Challenge, B.C. Forest Products, et al.
Those names have faded into history. But the pensioners sure haven't.
They weren't even directly involved in the first vote on the plan. Under the rules governing the process, pensioners weren't considered an affected party. So they weren't considered creditors, so they didn't have a vote.
Nonetheless, if it failed, their pensions would be cut 35 per cent, since the company would wind up with a huge deficiency in its pension plan. It put the pensioners in the strange position of only being considered players after the game was already lost.
So they executed an ingenious move. They surrendered all their extended health benefits and granted the company much more time to replenish the pension fund. Those moves meant forgoing a million dollars worth of value, including significant health-insurance coverage. But it qualified them as unsecured creditors, which gave them some voting power.
They also campaigned intensely for a second vote.
And behind the scenes, they launched their own power play. They threatened to apply for an order that would have deemed their pensions a "deemed trust." It's a contentious issue in pension law, now before the Supreme Court of Canada, that could effectively put pensioners at the front of the line in any insolvency cases, ahead of all other lenders.
The threat, combined with the benefits for the company in their concessions, changed the equation for the hedge funds. As well, one creditor changed its mind and another came on board. The final part of the campaign to win the second attempt came Friday, when some other members of the small holdout group agreed to give in, if Catalyst paid their legal costs.
It all paid off Monday, when secured and unsecured creditor groups each voted 99 per cent in favour of the plan.
There were some other chapters in this story. Catalyst CEO Kevin Clarke wrote an angry letter about the B.C. government's lack of action on the eve of a meeting with Premier Christy Clark. She pulled an important cabinet minister, Pat Bell, off the file and delegated deputy finance minister Peter Milburn and Liberal MLA Colin Hansen to resolve problems.
Catalyst Paper still faces a lot of uncertainty. But it has won some property-tax breaks from the communities and some concessions from the unions. Now it has shed a large share of the debt it was carrying ($700 million) and has a fighting chance to carry on.
A lot of interests came together, but the retirees' decision to give something up in order to get something back looks to be a key move.
It gives a new meaning to the term "seniors' moment."
Their "moment" consisted of several weeks of hard work executing some innovative strategic thinking that paid off in a big win for everyone.