RE: quest13 do not kill the messanger .check Ah well Drillquip.
I would just like to say all 3 could in fact be wrong and the Resverlogix legal firm that gave the opinion could be wrong as well. I also in all modesty could be wrong as well.
The only one who is never wrong is the Supreme court! Possibly also the legislature when it makes the law; although the legislature has been known to do things that were not intended.
In my working career (with C-I-L) I ran into two such cases where the politicians so badly screwed us (technical jargon) that the Canada revenue agency, which did not want to enforce the law as written in the special case involved, and we and our law firm succeeded in getting the law changed so that we and other companies would not be affected and we would not be essentially forced to close down the operations in question.
I believe that there are two possible circumstances which we as shareholders will face.
1 – in our non sheltered accounts I do not see any tax problem; only a possible loss problem which occurs with any investment.
2 – CRA does force our brokers to move the Zenith shares out; but the question is at what value and when and what will be the tax consequences to us?
A – if the order to move out (which I believe is wrongly feared by your tax advisors) comes after the CRA thinks about it a bit - then we have the fact that given a sale of the RVX shares taking place the company will proceed fairly soon thereafter to list the Zenith shares and there will be no problem at that time.
B – if the order to move out comes after it is apparent that there is no sale taking place then I see the value of the Zenith shares being essentially zero and again I see no tax problem in reality though we might be liable for tax on zero value which I do not see as a problem.
C – even if the shares must be moved out and a sale is simply being delayed beyond a foreseen passage of time then the issue is what is the value of the Zenith shares as there is an in kind distribution from our sheltered account to our regular account. In such a case the board of Resverlogix has already stated that in their opinion the market essentially sees anything but RVX-208 as being valueless. Seeing that we have been so advised I would value them at zero value and file my taxes on that basis.
The intent in any of my messages is not to shoot the messenger. I recognize that you honestly hold the opinion that there is a possible problem to be feared; but I do not believe there to be a problem and I am acting in my belief that there is not a problem and am expressing my own honestly held opinion.