The Supreme Court of Canada considered a proposed plan of arrangement for a leveraged buyout of BCE Inc. that would add substantial debt to Bell Canada, reducing the trading value of its debentures.
The debentureholders opposed the arrangement, claiming oppression under s. 241 of the CBCA and arguing the arrangement was not fair and reasonable under s. 192.
The Court held that the directors' fiduciary duty is owed to the corporation, not to specific stakeholders, though directors may consider stakeholder interests.
The debentureholders failed to establish a reasonable expectation that their investment grade rating would be maintained.
The Court affirmed the trial judge's approval of the arrangement, finding it had a valid business purpose and resolved objections in a fair and balanced way.
