Three recent cases addressing the duties of the board of directors and the treatment of shareholder rights plans may signify a change in the law or its application. On the surface, these cases all point to less interference by Courts and Securities Commissions in the decisions of boards of directors relating to take-overs, and in particular, the use of a shareholder rights plan.
The Supreme Court Of Canada's Decision In BCE Inc.
In Re: BCE Inc., debentureholders of BCE Inc. claimed that the board of directors had unfairly disregarded their interests in approving a potential acquisition of the company under the arrangement provisions of the Canada Business Corporations Act (the "CBCA"). The increased debt from the acquisition would have resulted in lowering the rating of the debentures below investment grade and significantly decreased their market value....
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