Fasken Martineau comments on the Supreme Court's decision regarding BCE Inc. June 20, 2008 Today, the Supreme Court of Canada unanimously overturned the Quebec Court of Appeal’s decision which had threatened to derail the acquisition of BCE Inc., the largest leveraged buy-out transaction in Canadian history. Although the reasons for its decision have not been released, the Supreme Court of Canada’s unanimity strongly suggests that it took serious issue with the Quebec Court of Appeal’s reasoning. As a result, one might speculate that the Court’s rationale will be based on the finding of the trial judge that the debentureholders had no reasonable expectation of being protected in the event of a change of control. Rather, the Court may say that the debentureholders would reasonably have expected that, on a change of control, their covenants, as drafted, would have been honoured. The court might then conclude that there was ample evidence the covenants were being honoured so there was no basis to halt the plan of arrangement or to give precedence to the interests of the debentureholders over the interests of the shareholders. In any event, public market participants will welcome the Court’s willingness to hear the appeal and render its decision on an expedited basis as indicative of a commitment on the part of the Court to be responsive to, and take a leadership role in respect of, matters of commercial significance. In that regard, Fasken Martineau hopes that the Court’s reasons, when released, will provide guidance to directors as to their fiduciary duties in the context of change of control transactions generally and plans of arrangement in particular.

Related Lawyers Richard J. Steinberg Aaron J. Atkinson Jonathan A. Levin Daniel Batista Related Practice Securities and Mergers & Acquisitions Related Office Toronto