Olympia & York’s Creditors Voting on Debt Restructuring

The Olympia & York saga takes an important new turn this week as its creditors vote on a plan that could leave the banks and bondholders owning many of O&Y;’s trophy properties in Canada.

Starting Sunday and continuing through Friday, 34 groups of creditors will gather in Toronto to vote on the complex debt-restructuring agreement.

Olympia & York once was regarded as the world’s largest property developer, with massive holdings in Manhattan and other major cities across the United States and Canada.

Michael Barr, director of institutional research at H. Rivkin & Co., said the latest plan is getting a warmer reception because secured creditors have the option to foreclose on the buildings.

Under the debt pact, creditors also can choose to restructure their debts, with the claims payable at the end of five years. Interest payments would be based on available cash flow of Olympia & York Developments Ltd., the parent company of the Canadian property empire.

The plan would leave O&Y;’s owners, the Reichmann family, in control of Olympia & York Developments.