Jon Willing, Ottawa Sun
The city is close to protecting that $300,000 needed to decommission the Plasco demonstration plant on Trail Rd. It seems the city will agree to hold off on trashing the demo facility agreements for six months if it can secure that cash. Here’s city clerk and solicitor Rick O’Connor explaining the draft settlement in a memo to council today (I added the link to his previous memo).
I am writing to advise that the City has been working on a settlement related to the $300,000 Letter of Credit currently being held by the City for the decommissioning of the Plasco Demonstration Facility. The settlement involves the City, Plasco, the Monitor and the Bank of Nova Scotia and is aimed at insulating these funds from the legal proceedings that are ongoing pursuant to the federal Companies’ Creditors Arrangement Act (CCAA).
At the Council meeting of February 25th, 2015, as part of the consideration of the Environment Committee’s report entitled, “Update on Plasco Long-Term Waste Conversion Agreement”, City Council approved Recommendation 4 as follows:
“Approve that the City Manager be given delegated authority to terminate the Lease for the Plasco Demonstration Facility and any related agreements and take any necessary action in relation thereto, subject to the concurrence of the City Clerk and Solicitor, in the event that (a) one or more events occur which permit the City to terminate the Lease and any related agreements, or (b) if the City and Plasco agree on terms for termination which are within the existing legal and financial parameters previously approved by Council. [Emphasis added.]”
Members of Council should be aware that materials filed by Plasco in court in Toronto earlier today, including a draft form of settlement agreement, do not reflect the current terms on which the City would settle this matter. The City’s lawyers, Borden Ladner Gervais LLP, have responded to these materials.
If a settlement is reached, the signed settlement agreement (the “Decommissioning Security and Escrow Agreement”) would thereafter be filed in court in Toronto in anticipation of the Court’s consideration and approval of it on Wednesday, April 29th, 2015.
Under the proposed Decommissioning Security and Escrow Agreement, the Bank of Nova Scotia would monetize a GIC which it holds as a condition of having issued the Letter of Credit and transfer $300,000 from it to be held by the City’s lawyers, Borden Ladner Gervais LLP, for the benefit of the City as the decommissioning security, under the terms of the Decommissioning Security and Escrow Agreement.
The City has agreed to hold in abeyance, subject to certain conditions in favour of the City (e.g. Plasco continuing to comply with all of its obligations under the Demonstration Site Agreements) the termination of the Demonstration Facility Agreements for a six-month period of forbearance. Environmental Services was consulted on this matter and was of the opinion that the proposed concession was manageable from an operational perspective in light of the protection which would be provided to the City during this period.
After the expiration of the six-month period of forbearance, the City can return to Court to seek the termination of any Demonstration Facility Agreement or, should there no longer be a stay of proceedings by the Court under the CCAA, the City can terminate any Demonstration Facility Agreement in accordance with its terms and without further legal proceedings.
I am of the opinion that the above noted arrangement is in the best interests of the City and is consistent with a prior commitment made by City staff as set out in my previous Memo dated March 3rd, 2015.
I will continue to update Members of Council with respect to any further developments on this matter.
M. Rick O’Connor