In a second appeal arising from insurance class proceedings concerning participating account transactions implemented in a 1997 life insurance acquisition, the appellants challenged the trial judge’s interpretation of the remedial formula previously crafted by the Court of Appeal.
The court held that the objective of the remedy was to unwind the transactions as of the effective date by restoring the participating accounts and shareholder accounts to the positions they would have occupied had the transactions not occurred, without conferring a windfall.
It concluded that amortization charges could not reduce the merger expense savings deduction, that the 6.91 percent return under paragraph 200(e) had to be calculated on an after-tax basis, and that paragraph 200(e) formed part of the deduction rather than an addition to the amount payable.
The appeal was allowed, the effective date remained December 31, 2011, and the amount repayable to the participating accounts was fixed at $51.6 million subject to updating.
