Canwest Affidavits

BRACEWELL & GIULIANI LLP 1177 Avenue of the Americas New York, New York 10036-2714 Telephone: (212) 508-6100 Facsimile: (212) 508-6101 Jennifer Feldsher (JF 9773) - and 225 Asylum Street, Suite 2600 Hartford, Connecticut 06103-1534 Telephone: (860) 947-9000 Facsimile: (860) 246-3201 Evan D. Flaschen (EF 6973) Ilia M. O'Hearn (IO 6211) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------------- X In re: : Chapter 15 : CANWEST GLOBAL COMMUNICATIONS CORP., : Case No. 09 - 15994 : Debtor in a Foreign Proceeding. : --------------------------------------------------------------------- X In re: : Chapter 15 : CANWEST TELEVISION GP INC., : Case No. 09 - 15996 : Debtor in a Foreign Proceeding. : --------------------------------------------------------------------- X In re: : Chapter 15 : CANWEST GLOBAL BROADCASTING : Case No. 09 - 15997 INC./RADIODIFFUSION CANWEST GLOBAL INC., : : Debtor in a Foreign Proceeding. : --------------------------------------------------------------------- X In re: : Chapter 15 : CANWEST MEDIA INC., : Case No. 09 - 15998 : Debtor in a Foreign Proceeding. : --------------------------------------------------------------------- X

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In re:

: Chapter 15 : 4501063 CANADA INC., : Case No. 09 - 15999 : Debtor in a Foreign Proceeding. : --------------------------------------------------------------------- X VERIFIED PETITION PURSUANT TO 11 U.S.C. §§ 105(a), 1504, 1507, 1515, 1517, 1519, 1520 AND 1521, COMMENCING CHAPTER 15 CASES AND SEEKING ENTRY OF AN ORDER RECOGNIZING FOREIGN MAIN PROCEEDINGS AND GRANTING FURTHER RELIEF AND ADDITIONAL ASSISTANCE FTI Consulting Canada Inc. is the court-appointed monitor ("Monitor") and authorized foreign representative of Canwest Global Communications Corp. ("Canwest Global"), and its affiliated captioned debtors and participants in proceedings (the "Canadian Proceedings") under Canada's Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the "CCAA"), pending before the Ontario Superior Court of Justice (Commercial List) at Toronto (the "Canadian Court").

The Monitor has commenced these chapter 15 cases to obtain

recognition by this Court of the Canadian Proceedings as foreign main proceedings in order to aid the Canadian Proceedings and Canwest's restructuring by protecting Canwest's television business from U.S. television producers and studios. Canwest's television business is principally owned by five of the twenty-five applicants in the Canadian Proceedings who are debtors in these proceedings:1 Canwest Global, Canwest Media Inc. ("CMI"), 4501063 Canada Inc. ("4501063"), Canwest Television GP Inc. ("Canwest Television"), and Canwest Global

1

All of the applicants in the Canadian proceedings are hereinafter referred to collectively as the "CCAA Entities." Where reference is made to the Canwest enterprise as a whole, which includes the Debtors, the other CCAA Entities and Canwest Global's other subsidiaries, the term "Canwest" will be used.

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Broadcasting Inc./Radiodiffusion Canwest Global Inc. ("Canwest Broadcasting," and collectively with Canwest Global, CMI, 4501063 and Canwest Television, the "Debtors").2 By its counsel, Bracewell & Giuliani LLP, the Monitor files this petition (the "Verified Petition") pursuant to sections 105(a), 1504, 1507, 1515, 1517, 1519, 1520 and 1521 of title 11 of the United States Code (the "Bankruptcy Code") in support of the Official Form B-1 Petitions (collectively, the "Chapter 15 Petitions") of the Debtors as well as the Monitor's "first day" motions filed contemporaneously herewith, including the Monitor's ExParte Motion for Order To Show Case With Temporary Restraining Order and, After Notice and a Hearing, a Preliminary Injunction (the "TRO Motion"). In further support of this Verified Petition and the TRO Motion, the Monitor has also filed a Memorandum of Law (the "Memorandum of Law") and the Declaration of John E. Maguire, Chief Financial Officer of Canwest Global and CMI (including the exhibits thereto, the "Maguire Declaration").3 JURISDICTION AND VENUE 1.

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157

and 1334, section 1501 of the Bankruptcy Code and the Standing Order of Referral of Cases to Bankruptcy Judges of the United States District Court for the Southern District of New York (Ward, Acting Chief Justice), dated July 10, 1984. This matter is a core proceeding within the

2

The Debtors have requested joint administration of these chapter 15 cases by motion filed concurrently herewith.

3

The Maguire Declaration is attached hereto as Exhibit A. The Maguire Declaration attests that the Maguire Affidavit attached thereto and submitted as part of the Canadian Proceedings setting forth, inter alia, the factual basis for the Canadian Proceedings and the primary background for these chapter 15 cases, is true and correct to the best of Mr. Maguire’s knowledge under penalty of perjury. For matters set forth in the Maguire Affidavit and incorporated by reference herein, Mr. Maguire verifies such matters. For all other matters set forth herein, Paul Bishop, the Monitor's Senior Managing Director of Corporate Finance and duly authorized agent, verifies such matters. Terms not defined in this Verified Petition shall have the meanings ascribed to them in the Maguire Affidavit.

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meaning of 28 U.S.C. § 157(b)(2)(P). Venue in this district is proper pursuant to 28 U.S.C. § 1410. 2.

The statutory predicates for the relief requested herein are sections

105(a), 1504, 1507, 1515, 1517, 1519, 1520 and 1521 of the Bankruptcy Code, Rule 7065 of the Federal Rules of Bankruptcy Procedure and Rule 65 of the Federal Rules of Civil Procedure. BACKGROUND The Debtors' Businesses 3.

Canwest is a leading Canadian media company with interests in free-to-

air television stations, subscription-based specialty television channels and newspaper publishing and digital media operations. Maguire Affidavit ¶ 3. Canwest is a multi-platform media conglomerate which owns and operates television stations and channels, a chain of national and local newspapers and related publishing assets that provide viewers, readers and advertisers throughout Canada with a wide array of entertainment and information programming and extensive local, regional and national coverage of news events. Id. ¶¶ 4 & 5. As of October 1, 2009, Canwest employed approximately 7,400 employees, the vast majority of whom work in Canada. Id. ¶ 9. 4.

The Debtors directly or indirectly hold the assets that comprise

Canwest's television broadcasting business.

See id. ¶ 3.

The Debtors operate eighteen

television stations in Canada (all of which are wholly-owned or partially-owned by the Television Partnership (defined below), which is the Debtors' principal non-debtor affiliate), including: (i) twelve free-to-air television stations which comprise the Global Television Network and (ii) six subscription-based specialty television channels (TVtropolis, Mystery TV,

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DejaView, MovieTime, Fox Sports World, and MenTV).4 Id. ¶ 49. In the markets in which they serve, the Debtors' television stations are extremely popular and well-watched. 1.

The Global Television Network 5.

major

metropolitan

Through the Global Television Network, the Debtors broadcast to the areas

in

Canada,

including

Toronto/Hamilton,

Montreal,

Vancouver/Victoria, Kelowna, Ottawa, Calgary, Edmonton, Quebec City, Halifax, Regina, Saskatoon and Winnipeg. Id. ¶ 51. In each of the markets in which it operates, the Global Television Network ranked second in its extended market area for the Spring 2009 ratings season with audience shares ranging from 4.3% to 9.3%. Id. It is estimated that the Global Television Network reaches approximately 32.2 million individuals or approximately 98% of the Canada's English-speaking television audience. Id. 6.

Indeed, the Global Television Network broadcasts some of the most

popular television programs in Canada, including shows produced in the United States and simulcast by the Debtors to Canadian audiences. Id. ¶ 52. Among the "hit" shows in the Debtors' current program schedule are established programs such as House, Lie to Me, Survivor, Heroes, The Simpsons, Family Guy, The Office, NCIS, Brothers and Sisters, 24, and Bones. Id. The Debtors also broadcast world class sporting events such as the Masters Golf Tournament, the PGA Tour, and the Wimbledon Tennis Championships. Id. 2.

The CW Media Segment 7.

In addition, the Debtors also operate a portfolio of 17 specialty

television channels which were acquired jointly with Goldman Sachs from Alliance Atlantis in August 2007 (hereinafter the "CW Media Segment"). Id. ¶ 58. Specifically, the CW Media 4

TVtropolis, Mystery TV and MenTV, which are not wholly-owned by the Television Partnership, are not part of the Canadian Proceedings. Maguire Affidavit ¶ 49.

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Segment consists of: (i) thirteen wholly-owned and partially-owned specialty television channels that are operated by CW Investments and its subsidiaries (including Showcase, Slice, HGTV Canada, History Television and Food Network Canada);5 and (ii) four other specialty television channels in which CW Investments has 50% or less ownership interests and does not operate (consisting of Historia, Series +, DUSK (formerly Scream) and One: the Body, Mind and Spirit Channel). Id. Neither CW Investments nor any of its subsidiaries are applicants in these cases or the Canadian Proceedings, nor is a stay sought in respect of any of these entities. Id. ¶ 59. 3.

Global National 8.

Lastly, the Debtors produce and broadcast Global National, Canada's

only dinner-hour national newscast. Id. ¶ 52. The Debtors' Broadcasting Rights 9.

Substantially all of the Debtors' non-Canadian produced television

programming rights are purchased by CMI or its affiliate, the Canwest Television Limited Partnership (the "Television Partnership"),6 from major television studios, distributors and other suppliers based in the U.S. (collectively with their Canadian affiliates or divisions, the "Providers"), such as, among others, Sony Pictures Television Canada (a branch of Columbia Pictures Industries, Inc.), Twentieth Century Fox/Incendo Television Distribution Inc. (as agent for Twentieth Century Fox Film Corporation, carrying on business in Canada as 5

Until recently, CMI held its interest in CW Investments, consisting of a 67% voting interest and a 35% equity interest, directly through its 100% ownership interest in 4414616 Canada Inc. (“4414616 Canada”). Maguire Affidavit ¶ 59. On or about October 5, 2009, the shares of CW Investments held by 4414616 Canada were distributed to CMI pursuant to a liquidation and dissolution of 4414616 Canada. Id. Goldman Sachs holds the remaining 33% voting interest and 65% equity interest in CW Investments. Id.

6

The Television Partnership is a partnership entered into between CMI, as 99.9% interestholder, and Canwest Television as 0.1% interestholder. The general partner of the Television Partnership is Canwest Television. The Television Partnership is not a "CCAA Applicant" (and therefore, is not a Debtor in these chapter 15 cases) solely because it cannot be an applicant under the CCAA by virtue of being a partnership.

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Twentieth Century Fox Television Canada), and CBS International Television Canada (a division of CBS Canada Holdings Co.). Id. ¶ 53. As of January 1, 2009, all programming rights previously acquired by CMI were assigned by CMI to the Television Partnership. Id. 10.

While the Debtors and the Television Partnership generally do business

with the Canadian affiliates of the Providers, given that most of the Providers have substantial operations in the U.S. (indeed, many are headquartered here), the Debtors are concerned that in the absence of a stay in the U.S., the Providers will attempt to gain an unfair advantage over other creditors and will disrupt the Debtors' reorganization efforts by threatening to shut off service or to terminate their agreements with the Debtors. Given that without the broadcasting content provided by the Providers the Debtors would be unable to broadcast many of their popular shows or worse could even "go dark", preservation of these agreements during these cases and the Canadian Proceedings is paramount to the Debtors and is essential to the Debtors' efforts to reorganize in Canada. Accordingly, the Monitor submits that recognition of the Canadian Proceedings by this Court is warranted and the injunctive relief requested in the TRO Motion, principally to prevent the Providers from altering their services or terminating their agreements with the Debtors and the Television Partnership as a result of the commencement of these cases or the Canadian Proceedings, is justified. EVENTS LEADING TO THE COMMENCEMENT OF THE CANADIAN PROCEEDINGS AND THE RESTRUCTURING TRANSACTION 11.

As discussed in detail in the Maguire Affidavit, the Debtors derive most

of their revenue from the sale of commercial air time to national, regional and local advertisers. Id. ¶ 57. Generally, demand for advertising on the Debtors' networks is driven by advertisers in the packaged goods, automotive, retail and entertainment industries. Id. Recently, however, the unprecedented downturn in the economic and advertising environment, particularly in the

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business sectors of the Debtors' largest advertising clients, caused a significant and precipitous decline in the Debtors' advertising revenues (a decline that is shared across the media industry in Canada and around the world) and negatively impacted the cash flow positions of the Debtors and the other CCAA Entities. Id. ¶ 10. As a result, certain of the Debtors and other CCAA Entities have defaulted on their credit facilities, note indenture and guarantee obligations. Id. This, in turn, caused a liquidity crisis at other CCAA Entities, preventing them from satisfying their obligations as they came due. See id. ¶¶ 11-12. 12.

Prior to the commencement of these cases, and after certain defaults

with respect to CMI's 8% senior subordinated notes due 2012 (the "8% Unsecured Notes"), the CCAA Entities entered into a series of negotiations with key creditor constituencies, including an ad hoc committee of holders of the 8% Unsecured Notes. See id. ¶¶ 12-22. Ultimately, these negotiations bore fruit and the parties agreed to a consensual restructuring plan for the CCAA Entities in which the CCAA Entities will "equitize" their debt through a plan of arrangement or compromise under the CCAA, with creditors receiving common shares of restructured Canwest Global (the "Restructuring Transaction"). Id. If approved, such plan of arrangement or compromise will allow for a going concern emergence for a substantial number of Canwest's businesses and continued employment for many of Canwest's employees. Id. ¶ 20-22. COMMENCEMENT OF THE CANADIAN PROCEEDINGS 13.

To effectuate the Restructuring Transaction, on October 6, 2009, the

CCAA Entities, including the Debtors, commenced the Canadian Proceedings. That same day, to assist the CCAA Entities and provide them with a "breathing spell" while they reorganize, the Canadian Court approved an Initial Order (as it may be amended or extended from time to time by the Canadian Court, the "Initial CCAA Order") that, among other things, stayed NEWYORK\39508.15

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proceedings against the Debtors and the Television Partnership until November 5, 2009 (or such later date or dates that may be provided for in further orders of the Canadian Court) and prohibited the Providers from terminating or failing to perform under their agreements with the Television Partnership, without further leave of the Canadian Court. See Initial CCAA Order (attached hereto as Exhibit B) ¶¶ 2 & 15-18. In addition, the Canadian Court expressly authorized the Monitor in the Initial CCAA Order to seek the relief requested in these cases from this Court in aid of the Canadian Proceedings. Id. ¶ 66. 14.

The Monitor is not aware of any other foreign proceedings within the

meaning of Bankruptcy Code § 101(23) with respect to the Debtors. CENTER OF MAIN INTERESTS OF THE DEBTORS 15.

The center of main interests, or "COMI," for each of the Debtors is in

Canada. The Debtors are companies organized under Canadian federal or provincial law and all have registered offices in Canada.

Maguire Affidavit ¶ 36.

Therefore, pursuant to

Bankruptcy Code § 1516(c), in the absence of evidence to the contrary, the Debtors are entitled to the presumption that their COMI is in Canada. 16.

Even without the presumption, however, the fact that the Debtors' COMI

is in Canada is manifest.

As set forth in the Maguire Affidavit, the Debtors conduct

substantially all of their operations in Canada.

The Canadian television broadcasting

operations that are owned directly or indirectly by the Debtors and the Television Partnership, which include the Global Television Network and all of Canwest's subscription-based specialty television channels, are headquartered at 121 Bloor Street East and 81 Barber Greene Road in Toronto, Ontario, Canada. Id. Furthermore, the following additional factors make clear that the Debtors' corporate hub and COMI is also in Canada, including:

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a)

Canwest Global is a public company continued under the Canada Business Corporations Act, R.S., 1985, c. C-44. Id. ¶ 25;

b)

Canwest Global operates out of Canwest Place, 31st Floor, 201 Portage Avenue, Winnipeg, Manitoba, Canada. CMI, 4501063 and Canwest Television are, directly or indirectly, wholly-owned subsidiaries of Canwest Global, are companies formed under the laws of Manitoba and all operate from the same address in Canada as Canwest Global. Canwest Broadcasting, which is 99.9% owned by the Television Partnership, is a company formed under the laws of Quebec and operates there;

c)

the books and records of each of the Debtors are maintained in Winnipeg, Manitoba, Canada and Toronto, Ontario, Canada;

d)

the corporate tax returns of each of the Debtors are filed in Canada;

e)

corporate governance of each of the Debtors is conducted from Canada (meetings of Canwest Global's Board of Directors are primarily held in Canada and all of the directors and executive management of each of the Debtors are residents in Canada);

f)

the assets of each of the Debtors are primarily located in Canada;

g)

certain of the Debtors own real property assets located in Canada;

h)

substantially all of the employees of the Debtors are located in Canada and are paid on Canadian payroll;

i)

the compensation and benefits paid to substantially all of the employees of the Debtors are regulated in Canada;

j)

the human resources functions of each of the Debtors are administered in Canada;

k)

Canwest Global's subordinate voting shares and its non-voting shares are publicly traded on the Toronto Stock Exchange;

l)

66 2/3% of each of the Debtors' voting shares must be held by Canadian persons; and

m)

all of Canwest Global's multiple voting shares are held by Canadian persons.

Id. ¶ 247.

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RELIEF SOUGHT 17.

By this Verified Petition, the Monitor seeks the following relief:

a)

recognition pursuant to section 1517 of the Bankruptcy Code of the Canadian Proceedings as "foreign main proceedings" as defined in section 1502(4) of the Bankruptcy Code;

b)

extension of the relief automatically available upon recognition to the Debtors pursuant to Bankruptcy Code section 1519, and on a permanent basis pursuant to sections 1520 and 1521 of the Bankruptcy Code;

c)

additional relief in the form of injunctive relief enjoining suits against the Monitor, the Debtors and the Debtors' current, former and future officers and directors outside of the Canadian Proceedings while the Debtors concentrate their efforts to reorganize in Canada;

d)

additional relief through approval of the TRO Motion, preventing on a preliminary basis, and after notice and a hearing, on a permanent basis, the Providers from terminating, altering or failing to perform their obligations to the Debtors as a result of the filing of these cases and the Canadian Proceedings; and

e)

such other and further relief as is appropriate under the circumstances pursuant to sections 105(a) and 1507 of the Bankruptcy Code. BASES FOR SUCH RELIEF

18.

For the reasons set forth herein and in the Memorandum of Law, the

Canadian Proceedings and the Monitor are entitled to recognition under section 1517 of the Bankruptcy Code. The Canadian Proceedings are (i) foreign proceedings within the meaning of Bankruptcy Code section 101(23) and (ii) foreign main proceedings within the meaning of Bankruptcy Code section 1502(4). As described above, the Debtors' registered offices, as well as their places of business are located in Canada, which is the Debtors' center of main interests within the meaning of Bankruptcy Code section 1516(c).

The Monitor is a foreign

representative within the meaning of Bankruptcy Code section 101(24).

Moreover, the

Chapter 15 Petitions and this Verified Petition meet the requirements of Bankruptcy Code section 1515.

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19.

In addition, the requested relief is consistent with the goals of chapter

15. The Monitor is informed and submits that granting the relief sought herein and in the TRO Motion will aid the Canadian Proceedings, best assure an opportunity for the Debtors to conduct an orderly reorganization of their financial affairs and maximize enterprise value for the benefit of all parties in interest. Consolidating all proceedings before the Canadian Court will make administration of these mega-cases easier and help ensure the just treatment of all holders of claims against and interests in the Debtors. See Bankruptcy Code § 1501(a)(3) (among the objectives of chapter 15 is to contribute to the fair and efficient administration of cross-border insolvencies). 20.

Moreover, recognizing the Canadian Proceedings would not be

manifestly contrary to the public policy of the U.S. under Bankruptcy Code section 1506. In fact, granting recognition will promote the public policy of the U.S. of respecting foreign proceedings as articulated in, inter alia, Bankruptcy Code sections 1501(a) and 1508. Thus, the conditions for recognition of the Monitor and the Canadian Proceedings under Bankruptcy Code section 1517 have been satisfied. 21.

Finally, the Canadian Proceedings and the facts of these cases support

the Monitor's request for additional assistance to the Debtors to the extent such relief cannot be granted directly pursuant to sections 105(a), 1519, 1520, and 1521 of the Bankruptcy Code. Indeed, proceedings under the CCAA have uniformly been found to meet the requirements for additional assistance set forth in section 1507(b) of the Bankruptcy Code, including: (1) just treatment of all holders of claims against or interests in the debtor's property; (2) protection of claimholders in the U.S. against prejudice and inconvenience in the processing of claims in such foreign proceeding; (3) prevention of preferential or fraudulent dispositions of property of

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the debtor; and (4) distribution of proceeds of the debtor's property substantially in accordance with the order prescribed by this title.7 Accordingly, granting additional assistance to the Debtors to aid the Canadian Proceedings is warranted and justified. CONCLUSION WHEREFORE, the Monitor respectfully requests that this Court (a) grant the relief requested in the Verified Petition and enter an order in the form attached hereto as Exhibit C recognizing the Canadian Proceedings as "foreign main proceedings" and the Monitor as the "foreign representative" of the Debtors in respect of such proceedings; (b) by separate order, grant the relief requested in the TRO Motion; and (c) grant such other further relief and additional assistance as this Court may deem just and proper.

7

Section 1507(b) provides a fifth element, “the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns,” which does not apply to these circumstances. 11 U.S.C. § 1507(b)(5).

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Dated: October 6, 2009 New York, New York Respectfully submitted,

By: /s/ Jennifer Feldsher _________ BRACEWELL & GIULIANI LLP Jennifer Feldsher (JF 9773) 1177 Avenue of the Americas New York, New York 10036-2714 Telephone: (212) 508-6100 Facsimile: (212) 508-6101 [email protected] Evan D. Flaschen (EF 6973) Ilia M. O'Hearn (IO 6211) 225 Asylum Street, Suite 2600 Hartford, Connecticut 06103-1534 Telephone: (860) 947-9000 Facsimile: (860) 246-3201 [email protected] [email protected] Attorneys for FTI Consulting Canada Inc. In Its Capacity as Monitor and Foreign Representative for the Debtors

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VERIFICATION Pursuant

to

28

U.S.C.

§

1746,

Paul

Bishop

declares

as

follows:

I am the Senior Managing Director of Corporate Finance and a duly authorized agent of FTI Consulting Canada Inc., which was appointed as the Monitor and authorized to act as foreign representative of the Debtors by the Ontario Superior Court of Justice (Commercial List) at Toronto. I have full authority to verify the foregoing Verified Petition Pursuant to 11 U.S.C. §§ 105(a), 1504, 1507, 1515, 1517, 1519, 1520 and 1521, Commencing Chapter 15 Cases and Seeking Entry of an Order Recognizing Foreign Main Proceedings and Granting Further Relief and Additional Assistance (the "Verified Petition"). I have read the foregoing Verified Petition and am informed and do believe that the facts contained therein are true and correct to the best of my knowledge, information, and belief. As to the matters stated in the Maguire Affidavit (as defined in the Verified Petition), I have relied on the contents of the Maguire Affidavit for those facts. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct to the best of my knowledge, information and belief.

Executed on this ____ day of October, 2009 at ______________________________.

_______________________________ Paul Bishop Senior Managing Director of Corporate Finance FTI Consulting Canada Inc.

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EXHIBIT A

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EXHIBIT B

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EXHIBIT C

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15994