RE:RE:RE:Directors' Discretion in the Sale of Corporate AssetsGreat finds Moab!
many quotes from the judgements that reflect exactly the shareholders direction:
" The law as it relates to the general duties of the directors of a company is well known. The directors of a company have an obligation to act honestly and in good faith in the best interests of the corporation: s. 134(1)(a)
Business Corporations Act, R.S.O. 1990, c. B.16 (the
"OBCA”). Further, in discharging their obligations, the directors must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances: s. 134(1)(b). If the actions of the directors unfairly disregard the interests of a shareholder, unfairly prejudiced those interests, or are oppressive to them, s. 248 of the
OBCA comes into play and allows the court to grant any remedy it thinks fit.
[2]"
The appleant : "
In the case at bar, the directors of Pandemonium Production Corp. (“Pandemonium”) (the “Directors”) lost sight of the corporation’s best interests, and pursued defensive tactics with the sole intention to defeat the proposed bid of Charon Entertainment Inc. (“Charon”)." May be current managgement playbook: (way too much detail but this is only a part)
https://www.uwindsor.ca/law/library/sites/uwindsor.ca.law.library/files/appellants_factum_-_final_0.pdf
"
Astoreth advised the Special Committee that there was a way for them to significantly dilute the majority’s holdings. However, they also had to get creative to make it happen in time for it to have any effect on Charon’s bid. 27. In 2008, Pandemonium had issued, by private placement, convertible unsecured notes (“Convertible Notes”) amounting to $28 million and maturing on December 31, 2012. Conveniently, many of these noteholders (the “Noteholders”) were already parties friendly to Pandemonium. These parties included relatives of Mr. Devore, existing shareholders, Pandemonium’s legal counsel, suppliers and customers and others with business relationships with Pandemonium.
28. Astoreth advised the Special Committee that the conversion of the Convertible Notes into common shares would be financially advantageous, as it could increase the total number of outstanding common shares by almost 30 million. Unfortunately, this option was not available until December 31, 2012. " I also found in conection with 2 addition case:
Limits to the BJ rule and Judicial Deference |
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A disqualifying conflict of interest, bad faith, or no informed decision (Maple Leaf Foods v Schneider, OCA, 1998) -
A board that merely “rubber stamps” the recommendations of others (Ford Motor v OMERS, OCA, 2006) • Reports of independent advisers based on false assumptions or incomplete/inaccurate facts (UPM- Kymmene Corp, OCA 2004) • Unnecessary haste combined with a lack of independence and experience (UPM-Kymmene Corp, OCA 2004) |