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Canadian law because the intent of the parties in entering into
the agreements was not to subordinate LTL's rights to the rights
of RBC, BBC, or any other third-party creditor; LIIBV was not a
party to the postponement agreements; the parties did not intend
the agreements to be subordination agreements; and the
postponement agreements were not enforceable as unregistered
securities.
Petitioners' arguments do not convince us to disregard the
postponement agreements for purposes of applying this factor.
The postponement agreements were effective immediately and
provided that Canadian law applied. LTL signed on behalf of its
subsidiaries and agreed to make transfers, deliver assignments
and documents, and do all acts necessary to implement the
agreements. Petitioners' commercial banks relied on the
agreements. Petitioners point out that E. Alan Peters (Peters),
petitioners' Canadian banking law expert, testified that the
postponement agreements were not subordination agreements under
Canadian law. However, Peters also testified that the
postponement agreements were enforceable under Canadian law, and
that they subordinated one creditor's right to payment to that of
another creditor.
Petitioner contends that the postponement agreements had
less effect than inchoate subordination agreements. Petitioners
make too much of this point because the postponement agreements,
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