On September 4, 2002, Vancouver based 360networks successfully completed the Canadian portion of its North American restructuring plan, when the Supreme Court of British Columbia granted the Final Order under the Companies' Creditors Arrangement Act and section 191 of the Canada Business Corporations Act in respect of certain Canadian subsidiaries of 360networks inc. The plan had been overwhelmingly approved by the secured and unsecured creditors of the filing companies at meetings held on August 27, 2002. A similar order is being sought in the U.S. Proceedings in relation to a parallel U.S. plan involving U.S. subsidiaries at a hearing tentatively scheduled in New York for October 1, 2002.

Pursuant to the plan, approximately US$1.2 billion of secured notes will be cancelled and replaced by a package of consideration consisting of U.S. $215 million of new secured notes, US$135 million of cash and approximately 80% of equity in restructured 360. Unsecured creditors in both the U.S. and Canada holding claims in excess of U.S. $350 million in total will receive the balance of the equity together with employees pursuant to an incentive program, with smaller creditors receiving cash in lieu of equity.

In addition to being one of the first successful large-scale restructurings in the telecom industry, the Canadian plan is notable for including a series of corporate transactions which have the effect of excluding 360networks inc., the publicly traded Canadian parent company of the 360networks group, and the unsecured debt of approximately $1.3 billion outstanding from that company to unsecured bondholders, from the reorganization plan. It is intended that the parent company will be placed into receivership upon the implementation of the Canadian and U.S. plans which is anticipated to occur in October.

The 360 group of companies is represented by Michael A. Fitch, Q.C., Robert A. Millar, Alison Z.A. Campbell, Brent J. Lewis, John F. Grieve and Kibben Jackson on the restructuring side and Peter H. Stafford, Georald S. Ingborg and Melody D. Schalm on the corporate side, all of Fasken Martineau, Vancouver.