More than a dozen banks and dealers could be protected from lawsuits stemming from participation in Canada's asset-backed commercial paper (ABCP) market, under a restructuring plan covering C$33bn ($33.6bn) of the distressed securities.

Since August, 20 highly leveraged trusts, or conduits, have been frozen in Canada when issuers were unable to roll over maturing paper as a result of turmoil in the US subprime market, investors' diminished appetite for risk and the failure of emergency ABCP liquidity provisions unique to the country.

Under an August 16 deal, known as the Montreal Accord, a group of issuers, investors and banks agreed to a moratorium on claims pending a restructuring of the market. Nonetheless, some lawsuits have already been launched by investors claiming that they were misled about the creditworthiness of the securities.

The committee overseeing the restructuring said it was confident that investors would agree to waive future claims as part of the deal and that this was crucial to securing co-operation of the banks and dealers. Purdy Crawford, the committee's chairman, said that failure to approve the restructuring would bring investors "back to where they are now".

The main proposal under the restructuring plan is to convert ABCP held in the conduits into floating-rate notes with longer maturities of between five and eight years. The securities will be divided into three groups, according to the quality of their underlying assets.

Mr Crawford said that while the deal might mean "some diminution" in value, "the restructuring gives investors a reasonable expectation of receiving the full par value over time". Most of the affected notes are expected to receive triple-A credit ratings, helping to make them more liquid.

The agreement includes a C$14bn credit facility to provide extra collateral in the event of margin calls as the value of the trusts' assets declines. The margin call funding facility will be provided by foreign and Canadian banks, and large ABCP investors, notably the Caisse de dépôt et placement du Québec, the province's public pension plan.

About 11 foreign institutions were active ABCP dealers and asset providers. They sold packages of credit default swaps to the conduits, giving them the right to make margin calls.

A foreign institution, understood to be JPMorgan, has agreed to top up the margin call facility by about C$2bn, in the event other contributions fall short.

The Crawford committee has been advised by JPMorgan, one of the few Wall Street banks not tainted by the credit markets meltdown.

The restructuring is a step towards improving liquidity in global credit markets. But it will not be easy to replicate in places where markets operate under different rules. Many US money market funds are barred from converting short-term paper into medium-term notes, for example.

JPMorgan declined to comment.