Earlier this summer an affiliate of Rogers Communications Inc.
acquired all of the issued and outstanding shares of the
corporation carrying on the Mobilicity wireless business in the
context of Mobilicity's Companies' Creditors
Arrangement Act (CCAA) proceeding.
The transaction was unique in part because of the speed at which
it was completed. While Mobilicity undertook a sale process in
early 2014, that process did not result in a completed sale
transaction, leaving the company without a clear path to completion
of the CCAA process until the Rogers transaction emerged and was
completed on an expedited basis.
A typical insolvency sale occurs following a structured and
court approved sale process in which the highest and best offer is
accepted. In certain circumstances, such a process is either not
possible or not warranted. This could be the case if:
evidence is available to show that in
the absence of a current sale process, the proposed transaction has
still resulted in acceptable value for the assets in question;
there is urgency to complete the
proposed transaction immediately and the risk of losing that
transaction is greater than the potential benefit of further
exposure of the assets to the market; and
the transaction has the support of a
large portion of the influential creditors in the insolvency
If the above circumstances exist and one is able to present a
compelling transaction that has significant stakeholder support, a
potential purchaser may be able to avoid an extended formal
A key to this strategy is negotiation with the right parties,
including influential creditor groups whose support will be
essential in moving forward with an expedited transaction.
In most cases the creditor group with the greatest influence
will be the group of creditors that expects to receive some
recovery but not a full recovery. If these creditors are
sufficiently cohesive to negotiate as a group and are supportive of
an expedited transaction, that transaction has a strong chance of
success. This group will have great influence over the
acceptability of a particular transaction and a particular offer
price. Knowing the expectations that this group has about their
potential recoveries will be essential to structuring an offer.
If these creditors are not a cohesive group, negotiating an
expedited transaction will be exceptionally difficult irrespective
of how interested the insolvent seller may be in completing such a
In the case of the Mobilicity transaction, each of the above
factors came together in a manner that allowed a transaction that
could be completed on an expedited timeline with the support of all
key stakeholder groups. Norton Rose Fulbright Canada LLP was
counsel to the Mobilicity Group in this successful transaction.
Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global legal practice. We provide
the world's pre-eminent corporations and financial institutions
with a full business law service. We have more than 3800 lawyers
based in over 50 cities across Europe, the United States, Canada,
Latin America, Asia, Australia, Africa, the Middle East and Central
Recognized for our industry focus, we are strong across all
the key industry sectors: financial institutions; energy;
infrastructure, mining and commodities; transport; technology and
innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global
business principles of quality, unity and integrity. We aim to
provide the highest possible standard of legal service in each of
our offices and to maintain that level of quality at every point of
Norton Rose Fulbright LLP, Norton Rose Fulbright Australia,
Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South
Africa (incorporated as Deneys Reitz Inc) and Fulbright &
Jaworski LLP, each of which is a separate legal entity, are members
('the Norton Rose Fulbright members') of Norton Rose
Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein
helps coordinate the activities of the Norton Rose Fulbright
members but does not itself provide legal services to
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should be
sought about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).