Special Situations Law

The latest developments in Special Situations Law in Canada

A study conducted by global consultancy firm Alvarez and Marsal (A&M) showed that companies with more women on their boards attract fewer activist investors. In particular, the study, which surveyed 1,854 public groups, revealed that companies not targeted by hedge fund activists had on average 13.4 per cent more women on their boards. Despite being a European study, it appears that the push for diverse governance only seems to be getting stronger across the world,…
On July 5, 2018, the Ontario Securities Commission (“OSC”) released its annual Statement of Priorities (the “Statement”) for the financial year to end March 31, 2019. The Statement outlines the most pressing issues that the OSC hopes to address in connection with the administration of the Securities Act, regulations and rules. While investor protection is a major focal point of the Statement, the OSC also addresses a number of issues that pertain to shareholder rights…
A fee-shifting by-law in the shareholder litigation context, “obligate[s] the plaintiff-shareholder to reimburse the corporation’s expenses (including attorneys’ fees and other costs) when the plaintiff [is] unsuccessful in litigation.” Shareholder litigation in the United States operates under the “American Rule” which provides that each party is responsible for their own attorney’s fees. Unlike South of the border, in Canada lawyers’ fees are largely recoverable by the prevailing party. The 2008 financial crisis escalated the number…
In a recent post about Canadian proxy contest trends, we discussed the growing concern with “The Active Passive investor” and potential issues on the horizon given a surge in the use of “withhold” campaigns. As of late, the prominence of withhold campaigns to signal shareholder discontent to boards of directors in North American markets has seen an even sharper rise. “Withhold” campaigns In an uncontested election of directors, management of companies solicit proxy cards or…
Recently, Activist Insight released a report on activist short selling. Activist short selling is when investors publicly bet on a stock going down in value. Among other interesting trends, the report shows that Canada ranks number 3 in the world for activist short campaigns. The data suggest that Canadian companies should be on high alert about the possibility of an activist short play. The global number of activist short campaigns is trending downward 2015 represented…
Shareholder activism has steadily been on the rise in Asia in the past seven years, but is it here to stay? According to a recent report published by J.P. Morgan in May 2018, the numbers seem to support this proposition. As outlined in the report, only 10 shareholder activist campaigns took place in Asia in 2011 — that number ballooned to 106 in 2017. Shareholders of Asian firms have historically been reluctant to engage in…
Bill C-25 received Royal Assent on May 1, 2018. The bill will amend the CBCA by: reforming certain aspects of director elections; creating requirements for public companies to disclose officer and director diversity representation; and introducing the new Notice-and-Access Regime. While some of the CBCA amendments have come into force, many of the amendments – including those described below – will come into force on a future date. As well, certain amendments must await changes…
In late 2014, the Canadian Securities Administrators (CSA) published “comply or explain” rules regarding female representation in director and executive officer positions. The requirements were codified in National Instrument 58-101 (the Disclosure Requirements) and created a positive duty for issuers in participating jurisdictions to disclose the details of female representation, including issuers’ targets, policies, and mechanisms to address female representation in director and executive officer roles. Where issuers do not adopt such mechanisms or consider…
In October 2017, the TSX published updates under section 473 of the TSX Company Manual placing additional disclosure obligation requirements on non-exempted TSX-listed issuers. These updates became effective on April 1, 2018. The TSX’s updates mandate that each TSX-listed issuer (other than Non-Corporate Issuers, Eligible Interlisted Issuers and Eligible International Interlisted Issuers (as such terms are defined in the TSX Company Manual)) will be required to maintain a publicly accessible website. These issuers are also…
Since the introduction of Bill C-45 to legalize the production, distribution and sale of cannabis for recreational use, the cannabis sector (the Sector) has been thriving. Despite many unknowns and uncertainties surrounding the Sector, investors appear unfazed as share prices continue to surge. Some key features of the Sector Even though Bill C-45 has not yet passed and has been the subject of some controversy, investor reticence appears to be at a minimum. However,…