Sunrise REIT initiated an auction process to sell its assets, requiring interested parties, including Ventas and HCPI, to sign confidentiality and standstill agreements.
Ventas submitted the winning bid, and Sunrise signed a purchase agreement containing a 'fiduciary out' clause allowing it to consider superior unsolicited proposals, but also requiring it to enforce existing standstill agreements.
HCPI subsequently submitted a higher bid.
The Court of Appeal upheld the application judge's ruling that the purchase agreement obliged Sunrise to enforce HCPI's standstill agreement, thereby precluding Sunrise from considering HCPI's bid, as it was not a 'bona fide' proposal due to the breach of the standstill agreement.
