AvenEx Energy Corp AVNDF

Case law requires AvenEx shareholder vote on sale

[kingofcotton]

https://www.stikeman.com/cps/rde/xchg/se-en/hs.xsl/6783.htm

 

Canadian law affords directors a wide degree of latitude when dealing with corporate property. Courts are generally deferential to the diligent and reasonable efforts of directors to act in the best corporate interest. Shareholder approval of property disposition is required by law only where the transaction deals with "all or substantially all" of the corporation's assets. Courts have taken their cue from the broad language of the CBCA and other corporate statutes, and tend to eschew set formulas or precise standards, preferring to consider whether the sale would fundamentally change or jeopardize the continued existence of the corporation, contrary to the expectations and investment purposes of shareholders.

Directors are not prevented from pursuing advantageous transactions merely because the assets involved are large or are central to the business. Instead, the limit on dealing freely with corporate property is placed higher-the assets involved must be of significant size and of such importance to the corporation that the disposition would have to fundamentally change the nature of the corporation, in either shifting its business objectives or preventing it from continuing to operate as a profitable enterprise.