RE: Shareholders vote on Elbow River sale required Does anyone have the name of any responsible individual at the Alberta Securities Commission who is responsible for any inquiry into whether Avenex management has improperly transferred Elbow River out of Avenex without subjecting it to shareholder approval?
The Alberta Corporations Act requires a shareholder vote on the sale of...substantially all of a corporation's assets. Subsequent Canadian case law has interpreted this to mean that the sale must change either the corporation's main focus or its profitability.
The transfer of Elbow River meets both legal tests. Elbow River was the source of all of Avenex's profits. The sale of Elbow River also fundamentally changes the focus of the company. Instead of being a profitable Oil by Rails business with a substandard set of oil and gas assets, Avenex after the sale becomes only a substandard set of oil and gas assets. Fundamentally this changes the business focus.
An administrative court should block this illegal transfer of assets out of the corporation. And if the asset sale has closed the sale should be reversed as an illegal transfer of assets out of the corporation.
If you were the buyer Parkland, I would think you would want to block the sale as well and not partake in a transaction that might be subject to a court battle and ASC inspection and action.