On June 20, 2008, the Supreme Court of Canada released its
decision, with reasons to follow, regarding BCE's
proposed plan of arrangement. This decision has been eagerly
anticipated due to its impact on the Canadian capital markets,
particularly on the fiduciary duty of directors in the context
of change of control transactions.
In its unanimous decision, the Supreme Court approved the
largest leveraged buyout in Canadian history whereby an
investor consortium led by Teachers' Private Capital,
Providence Equity Partners Inc. and Madison Dearborn Partners
Inc. would acquire, by way of a plan of arrangement under the
Canada Business Corporations Act (the Plan), all the
outstanding common shares of BCE. In doing so, the Supreme
Court overturned the decision issued by the Québec Court
of Appeal on May 21, 2008 and affirmed the trial
judge's approval of the Plan.
In the May 2008 issue of The Material Change
Report, we examined the facts surrounding this case and
the Québec Court of Appeal's unanimous decision
to overturn the trial decision and deny approval of the Plan.
Among other things, the Québec Court of Appeal found
that the board of directors of BCE overlooked the interests of
holders of certain debentures issued by Bell Canada Inc., a
wholly-owned subsidiary of BCE, as it did not take into account
the adverse financial impact of the BCE leveraged buyout on
We will be publishing a further Material Change
Report following the release of the reasons supporting
this decision of the Supreme Court.
Section 8 of the Interest Act, R.S.C. 1985, c. I-15, prohibits any "fine, penalty or rate of interest . . . that has the effect of increasing the charge on the arrears beyond the rate of interest payable on principal money not in arrears."
The Financial Consumer Agency of Canada (FCAC) issued a statement and a new compliance bulletin in response to recent news reports related to allegations that certain employees of banks were pressured to upsell to consumers to meet unrealistic sales targets and keep their jobs.
On February 24, the Supreme Court of Canada heard the appeal in Teva Canada Inc. v. Bank of Montreal. The appeal concerns who bears the loss for cheques payable to fictitious or non-existing payees, which were fraudulently issued by an employee.
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