SUPREME COURT OF CANADA ‑‑ JUDGMENT TO BE RENDERED IN LEAVE APPLICATION

"To finance its purchase, 6796508 Canada Inc. plans to take out a 30 billion-dollar loan which would then be guaranteed by Bell Canada"
[Buyer's subject. Economics of law would prefer the approach that the Court uses the word grants to authorize and legitimaze the adding of debt; and not the word dismiss to approve legitimazing the right to add debt.]



"Declaratory motions dismissed and s. 8.01 of trust indentures declared not to apply to plan; oppression remedies dismissed; plan of arrangement approved in part"
[Fraud to limit BCE Debenture loan agreement to single clause, section 8.01; and avoid the meat of the matter, adding debt to bell canada, that is stricly defined in BCE Debenture loan agreeemtn section 5.09. To grant legal standing to such a large debt 30 billion (equal to more than fifty percent of Canadian fiat currency outstanding, as stated by Bank of Canada), and ignore the other parts of the BCE Debenture loan agreement, specifically sec 5.09 limiting bell canada debt, is currupt. Theft of bank shareholder equity.]

[Sec 5.09 can get through back door, as when the court considers CBCA, that section 5.09 can weight in here. The court must grant an interpretation. Debenture holders own the right of adding debt. BCE sold this be borrowing their billions. To grant the leberage buyout loan is to expropriate this right to limit bell canada debt.]





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SUPREME COURT OF CANADA ‑‑ JUDGMENT TO BE RENDERED IN LEAVE APPLICATION

OTTAWA, 2008-06-02. THE SUPREME COURT OF CANADA ANNOUNCED TODAY THAT JUDGMENT IN THE FOLLOWING APPLICATION FOR LEAVE TO APPEAL WILL BE DELIVERED AT 4:30 P.M. EDT ON MONDAY, JUNE 2, 2008. THIS LIST IS SUBJECT TO CHANGE.

FROM: SUPREME COURT OF CANADA (613) 995‑4330


COMMENTS/COMMENTAIRES: comments@scc-csc.gc.ca


1. BCE Inc, et al. v. 6796508 Canada Inc., et al. (Que.) (Civil) (By Leave) (32647)


Commercial law – Corporations – Court approved arrangement under s. 192(f.1) of the Canada Business Corporation Act, R.S.C. 1985, c. C‑44 (“CBCA”) – What duties do directors owe to creditors, shareholders and other corporate stakeholders when considering a change of control transaction – What is the test for determining whether a plan of arrangement is fair and reasonable in circumstances where the proposed plan does not alter or arrange the rights of creditors, but may affect their economic interest – What standard of review applies to a trial judge’s finding that an arrangement is fair and reasonable – Peoples Department Stores Inc. (Trustee of) v. Wise, [2004] 3 S.C.R. 461.


BCE is a public company that owns Bell Canada. On April 9, 2007, BCE was put “in play” (i.e. it became apparent that there would be a sale of equity and/or voting control). The BCE Board of Directors consulted with its various legal and financial advisors and set up a strategic review process and an auction to privatize BCE. The overriding objective of these processes was to maximize shareholder value while respecting BCE’s legal and contractual obligations. At the end of the process, BCE accepted an offer of 42,75 $ per common share made by 6796508 Canada Inc. To finance its purchase, 6796508 Canada Inc. plans to take out a 30 billion-dollar loan which would then be guaranteed by Bell Canada.


The dispute involves debentures issued by Bell Canada under three trust indentures. The debenture holders are concerned about the potential effect of this leverage buyout transaction on their investment. Pursuant to s. 192 CBCA, BCE and Bell applied to have the plan of arrangement approved. The debenture holders filed contestations, alleging that the plan adversely affected their interests which were not considered by the BCE Board. They also filed motions for oppression under s. 241 CBCA and motions seeking a declaration that their trust indentures gave their trustees a right to approve the transaction.

At trial, the contestations were rejected and the plan approved. On appeal, the court found that the plan had not been shown to be fair and reasonable for all stakeholders in the circumstances.



March 7, 2008 Superior Court of Quebec (Silcoff J.)

Neutral citation: 2008 QCCS 899; 2008 QCCS 9057; 2008 QCCS 906; 2008 QCCS 907

Declaratory motions dismissed and s. 8.01 of trust indentures declared not to apply to plan; oppression remedies dismissed; plan of arrangement approved in part


May 21, 2008 Court of Appeal of Quebec (Robert C.J.Q. and Otis, Nuss, Pelletier and Dalphond JJ.A.)

Neutral citation: 2008 QCCA 930; 2008 QCCA 931; 2008 QCCA 932; 2008 QCCA 933; 2008 QCCA 934; 2008 QCCA 935

Appeals allowed in part; plan of arrangement not approved; oppression remedies dismissed for mootness; judgments on declaratory motions affirmed


May 28, 2008 Supreme Court of Canada Application for leave to appeal and motion for expedited hearing filed by BCE Inc. and Bell Canada

BCE JUDGMENT -- SUPREME COURT OF CANADA

"The trial judge’s approval of the plan of arrangement [Bell Canada borrowing 30 billion] is affirmed."
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[Lot more complicated than affirming judgement. Specifics about arrangement, and leverage buy-out debt rights, need clarificiation. How much debt can be added to Bell Canada? If leverage buy-out investing 5 or more billion of their own currency into buying BCE, debt not 30 billion, unless more debt is being booked to Bell Canada, beyond leverage buyout, for example. Or, if leverage buy-out buyers acquiring BCE shares currencly as less than 42.75, then buyout costs less, reduce size of debt; then not entilted to add 30 billion to Bell Canada balance sheet debt.]

[Not right that the BCE Debenture loan agreement debt clauses ignored. Not to tackle BCE Debenture loan agreement section 5.09 limiting Bell Canada, makes it unclear for banks Bell Canada's debt standing.]





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SUPREME COURT OF CANADA ‑‑ JUDGMENT IN APPEAL

OTTAWA, 2008-06-20. THE SUPREME COURT OF CANADA HAS TODAY DEPOSITED WITH THE REGISTRAR JUDGMENT IN THE FOLLOWING APPEAL.

FROM: SUPREME COURT OF CANADA (613) 995‑4330
COMMENTS/COMMENTAIRES: comments@scc-csc.gc.ca

APPEAL:32647 BCE Inc., et al. v. A Group of 1976 Debentureholders, et al. - and - Director Appointed Pursuant to the CBCA, Catalyst Asset Management Inc. and Matthew Stewart (Que.) Coram: McLachlin C.J. and Bastarache, Binnie, LeBel, Deschamps, Abella and Charron JJ.


The appeals from the judgments of the Court of Appeal of Quebec (Montréal), Numbers 500‑09‑018525‑089 and 500‑09‑018527‑085, dated May 21, 2008, heard on June 17, 2008, are allowed with costs throughout. The decision of the Court of Appeal is set aside and the trial judge’s approval of the plan of arrangement is affirmed.

The cross-appeals from the judgments of the Court of Appeal of Quebec (Montréal), Numbers 500‑09‑018524‑082 and 500‑09‑018526‑087, dated May 21, 2008, heard on June 17, 2008, are dismissed with costs throughout.

Reasons to follow.



[Dissent opinion on costs. Apllication to grant a buyer's subject, is free? BCE had to clarify Bell Canada's debt standing, not fair for BCE Debenture holders to pay this cost. Note if BCE debentures are found to have right to limit Bell Canada Debt, could Debentureholders sue BCE and leverage buyout for claiming right?]