Introduction

Recently, the Ontario Securities Commission (“OSC”) released its reasons for a September order dismissing an application for exemptive relief from the minimum tender requirement under Canada’s securities take-over bid regime.[1] ESW Capital, LLC (“ESW”), the largest shareholder of Optiva Inc. (“Optiva”), sought the relief in connection with

On January 14, 2021, Laurel Hill Advisory Group (“Laurel Hill”) and Fasken hosted a webinar on ESG (environmental, social and governance) considerations of which companies should be aware for the upcoming 2021 proxy season. The webinar’s panelists were David Salmon of Laurel Hill and Emilie Bundock, Stephen Erlichman and Grant McGlaughlin of Fasken and was moderated by Gordon Raman of Fasken. Set out below are some of the comments made by the speakers on the webinar.

Background

The importance of ESG considerations in today’s corporate governance model has developed over the past 50 years.  In the early 1970’s the Milton Friedman view of corporations was the dominant business mindset.  In a forceful New York Times article he said that business leaders that “believed business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends …[were]… preaching pure and unadulterated socialism”.  Since that time, certainly in North America,  corporations have assumed a central role in the growth of economies.  With that central role has come the recognition that corporations play a greater role in society, as noted in 2017 by Larry Fink, the head of Blackrock.  In his annual letter to CEOs he wrote: “ To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
Continue Reading Proxy Season Preview 2021: ESG Considerations

On January 14, 2021, the Toronto Stock Exchange (“TSX”), Laurel Hill Advisory Group (“Laurel Hill”) and Fasken hosted a conversation on important disclosure and corporate governance considerations for issuers leading into the 2021 proxy season. The panel discussed four discrete areas of recent developments in corporate governance which companies should be aware of before this upcoming 2021 proxy season:

  1. An Update from Proxy Advisory Firms
  2. An Update from the TSX
  3. Diversity Disclosure
  4. COVID-19: Lasting Repercussions

The webinar discussion featured Bill Zawada of Laurel Hill, Valérie Douville of the TSX, and Sarah Gingrich and Neil Kravitz of Fasken and was moderated by Gordon Raman of Fasken.
Continue Reading Proxy Season Preview 2021

Proxy advisory firms Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis) recently published updated guidelines governing shareholder meetings for the 2021 proxy season. The ISS Benchmark Policies for Canadian issuers and Glass Lewis Guidelines focused on key issues, including gender diversity, environmental and social risk oversight, board refreshment, and other corporate governance

Several months ago we asked whether a COVID-19-related impact on a business might constitute a “Material Adverse Change” (referred to as a “MAC,” or a material adverse effect, “MAE”) under merger agreements, and we noted the near complete absence of case law on the issue in Canada (see: “COVID-19 and Material Adverse Change Provisions

The Ontario Securities Commission, like several other regulatory investigators, has extensive power to compel testimony and require the disclosure of documents and information.  A recent decision of the OSC, B (Re) (2020 ONSEC 21), has highlighted a gap in the Commission’s power to compel testimony from a witness where such testimony may constitute a breach of the witness’s contractual obligations to a third party.

The Case

Staff of the Commission is conducting an investigation pursuant to an investigation order issued by the OSC under section 11 of the Securities Act.  Investigation orders empower Staff to issue a summons pursuant to section 13 of the Act, to compel an individual to provide oral testimony under oath and to provide documentary evidence.  Section 16 of the Act prohibits the recipient of a summons from disclosing information relating to the summons or the investigation, subject to narrow exceptions.

Staff served upon an individual, identified only as “B”, a summons under section 13 of the Act.  Although B was prepared to cooperate with Staff, B was concerned that doing so would violate B’s employment contract, which imposes confidentiality over all matters relating to B’s employment without an exception that is relevant to a regulatory investigation.
Continue Reading Recent OSC Decision Raises Uncertainty for Witnesses Responding to a Summons

Further to our earlier post discussing COVID-19 and Material Adverse Change (“MAC”) provisions in merger and acquisition agreements, and the procedural ruling in respect of the dispute involving Rifco Inc. (“Rifco”), ACC Holdings Inc. (“Purchaser”), and the Purchaser’s parent company, CanCap Management Inc. (“CanCap”), each of Rifco, the Purchaser and CanCap, (collectively, the “Parties”) settled

In late May 2020, BDO Canada and Fasken hosted a conversation with leading private equity (PE) firms on the slumping market conditions around the COVID-19 crisis. The panel identified two discrete steps in the PE response:

  1. Navigating current market conditions
  2. Emerging from these conditions to thrive

The webinar discussion featured Chad Danard of TriWest Capital Partners, Sameer Patel of Angeles Equity Partners, and Ted Mocarski of Novacap.

1.     Navigating current market conditions

The PE-portfolio company relationship

PE investing is a relationship-driven business. During times of uncertainty, strong integration between the firm and portfolio company is especially critical. To lead portfolio companies through a pandemic, PE firms have found it helpful to increase the frequency of communication touchpoints with management teams. This allows them to proactively address market softness and liquidity constraints.

In the near term, companies and firms can expect to switch from offensive to defensive strategies. Instead of focusing on growth opportunities, PE firms will add value by leveraging their past experience in economic downturns and offering advice related to capital preservation.
Continue Reading Private Equity Point of View: Navigating Through, and Emerging From, the Crisis

Further to our earlier post discussing COVID-19 and Material Adverse Change (“MAC”) provisions in mergers and acquisitions agreements and the hearing held last week in connection with an application for the final order (“Final Order Application”) in respect of the proposed plan of arrangement (the “Arrangement”) involving Rifco Inc. (“Rifco”), an alternative auto financing company

Further to our earlier post discussing COVID-19 and Material Adverse Change (“MAC”) provisions in M&A Agreements that addressed the lack of relevant Canadian court decisions and the associated uncertainty in their interpretation, Canadian capital market participants are watching with keen interest the dispute between Rifco Inc. (“Rifco”), an alternative auto financing company that trades on