E. Snow

The applicant corporation sought court approval of a plan of arrangement under s. 182 of the Ontario Business Corporations Act involving the acquisition of its shares by another corporation.

Applying the framework in BCE Inc. v. 1976 Debentureholders, the court considered whether statutory procedures were followed, whether the application was brought in good faith, and whether the arrangement was fair and reasonable.

The court concluded that the arrangement had a valid business purpose, had been approved overwhelmingly by shareholders, and provided a significant premium to shareholders.

The court declined to rely on a fairness opinion contained in the management proxy circular because it constituted opinion evidence that failed to meet the admissibility requirements under the Rules of Civil Procedure, as it did not disclose the analytical basis for the opinion.

The arrangement was nevertheless approved on the basis of other admissible evidence.

The applicant corporation sought an order under s. 133(3) of the Canada Business Corporations Act to extend the time for calling its annual shareholders’ meeting.

The application was brought on an ex parte basis because the meeting was scheduled for the following day and the corporation intended to postpone it while issuing an amended management information circular after regulatory comments.

The court declined to proceed ex parte, finding that shareholders and the Director under the CBCA were persons affected by the requested order and should receive notice.

The court also held that the applicant had failed to disclose a material fact, namely the existence of ongoing plan of arrangement proceedings that would be considered at the same shareholder meeting.

Directions were issued requiring notice to shareholders and the Director and adjourning the application.