Brookfield Office Properties Inc T.BPO.PR.A

RE:BN controls 100% of BPY. BPY made the Guarantee, not

[SONOFFERGUS]

Ahhhh.

Let me see if I'm getting this.

1. The "most important document" says that BPY and its 8 (8!) subsidiaries provide a guarantee.  A good-looking guarantee with all the bells and whistles and pages of legalese.  A "continuing guarantee," no less!  The lawyers tied that document up TIGHT!!!!
2. BN controls BPY.
3. The "continuing guarantee" provision [see below], which clearly addresses ONLY the particular circumstance where THE OBLIGATIONS OF THE CORPORATION (Brookfield Office Properties Inc.) TO ITS PREFERRED SHAREHOLDERS (that's you and me and the other stooges) ARE VOIDED FOR ANY REASON, INCLUDING BY A BANKRUPTCY TRUSTEE, also applies to extend the guarantee obligation to BN, which is NOT a party to this agreement but somehow is because...reasons.

(To be fair, the continuing guarantee provision is important -- the guarantors can't get out of paying it by having BPO file for bankruptcy or the like.  The only way BPY and subs can get out of it is by being insolvent themselves, and then BPO pref holders are in line with their other creditors.)

So, your "guess, just a guess, good chance" has no legal basis.  Hopes and dreams.  If BN decides to walk away from BPG (BPY/BPO, as you should recall), this guarantee is not enforceable against BN.  The discount of BPO prefs to BN prefs is exhibit A -- Mr. Market gets it.

NOTE THOUGH THAT IF BN MONKEYED WITH BPY (AND THEY DID, AND THEY DO, AND THEY WILL) AND THAT IMPAIRED BPG'S ABILITY TO PAY (SAY THROUGH MISPRICED INTERCOMPANY TRANSACTIONS THAT SIPHONED MONEY OUT OF BPG), OUR LAWYERS WOULD BE ALL OVER THEM -- TOGETHER WITH ALL THE OTHER LAWYERS OF ALL THE OTHER BPG CREDITORS/INVESTORS/LP HOLDERS ETC.

CAN YOU IMAGINE THE CRAZINESS (OOPS) OF BPG FAILING?  IT MIGHT BE THE BIGGEST UNWIND EVER.  WHAT WOULD THAT DO TO BN AND ITS MASSIVE ASSET MANAGEMENT BUSINESS?  HOW MANY CLIENTS WOULD THEY LOSE -- INVESTORS IN BPG WHO ARE SUING THEM, PROSPECTS WHO SEE HOW BN LET BPG INVESTORS TWIST?  

SO, THE ANSWER IS...TRUST FLATT (hi Carena!).  HE'LL CUT OFF HIS RIGHT HAND BEFORE HE LETS BPG FAIL.  THIS HAS BEEN MY PRINCIPAL INVESTMENT PREMISE FROM THE GET-GO.

It's time for you to let go of this.  The BPO prefs are going to be fine because the alternative for BN would be financial hari-kari.  The stooges see this.  As Pierre says, we have a good thing going.  Enjoy your dividends.

...........

2.6 Continuing Guarantee This Guarantee shall apply to and secure any ultimate balance due or remaining due to the Holders in respect of the Class AAA Senior Preference Share Obligations and shall be binding as an absolute and continuing obligation of each Guarantor. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment of any of the Class AAA Senior Preference Share Obligations must or may be rescinded, is declared or may become voidable, or must or may otherwise be returned by the Holders for any reason, including the insolvency, bankruptcy, dissolution or reorganization of the Corporation or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Corporation or any substantial part of its property, all as though such payment had not been made. If at any time the Corporation is precluded from making payment when due in respect of any Class AAA Senior Preference Share Obligations by reason of the provisions of the CBCA or otherwise, such amounts shall nonetheless be deemed to be due and payable by the Corporation to the Holders for all purposes of this Guarantee and the Class AAA Senior Preference Share Obligations shall be immediately due and payable to the Holders. This is a guarantee of payment, and not merely a deficiency or collection guarantee.