Law Times

LAW TIMES / MAY 12/19, 2008 BCE ruling shines light on oppression claims BY IAN HARVEY For Law Times takeover in March will have a ripple effect on securities law in Ontario and the rest of Canada, says one of the lawyers involved. Michael Watson of Gowling Lafleur Henderson LLP, which acted for Deutsche Bank AG, says Justice Joel Silcoff 's rejec- tion of Bell Canada bondhold- ers' argument they were "op- pressed" shines a clear light on when that argument can be called into play. "It clarifies several T he Quebec Superior Court ruling which green-lighted the BCE one, that bond or debenture holders are in a very different position than shareholders," he says, noting BCE's safe harbour boilerplate warnings about for- ward-looking statements "slath- ered" through its materials to investors were instrumental in rebuffing the bondholders. The court ruled in favour of BCE on all five points but will likely be appealed. At the core of the dispute was the claim that the buyout by the Ontario Teachers' Pen- sion Fund would see BCE take on more debt that eroded the value of the bonds. Pointing o the 1976 trust points: agreement, bondholders in- voked a claim of "oppression" normally used to protect mi- nority shareholders. However, Watson says, the Marketplace COUNSELLING Dr. Helping legal professionals to overcome depression and stress since 1989. Individual sessions, telephone coaching. Call (416) 766-6185. To advertise call 905-841-6481 Valentin Shulman - Written by top experts in civil litigation and public law, this highly regarded procedural guide is the only resource you need to gain a solid understanding of Ontario's civil and administrative procedural law. This handy resource contains all of the relevant legislation and rules of procedure you need to prepare for court. It consists of: Courts of Justice Act, Evidence Act, Limitations Act, 2002, and the Legislation Act, 2006, with annotations of the most relevant case law. Statutory Powers Procedures Act Important new OAP developments Order your copy today! court ruled bondholders are not shareholders and must look at the contract which forms the basis of the relation- ship with the company. He also notes that last month the Ontario Court of Appeal shrugged off a play to bring an oppression claim into a landlord-tenant conflict in J.S.M. Corporation Ltd. v. The Brick Furniture Warehouse Ltd. (2008 ONCA 183), very much in line with the narrow interpretation of when such arguments may be applied il- lustrated in the BCE case. In BCE the court clearly FOCUS PAGE 15 Looking for an easier way to attract attention? ruled that when an offer for the company is tabled, the role of the directors clearly shifts from focusing on the perfor- mance of the company and contractual obligations to the overriding concern of maxi- mizing shareholder value, the risk to bondholders notwith- standing, Watson says. LT it's easy. Annual Practice 2008-2009 Ontario The Late Honourable James J. Carthy, W.A. Derry Millar and Jeff G. Cowan www.canadalawbook.ca www.lawtimesnews.com CARTHY_Ontario Annual Practice (LT 1-2x4).indd 1 LT0414 5/7/08 12:11:05 PM

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