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Failed attempt to privatize Sears Canada teaches that it pays to respect shareholders and independent directors

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June 11, 2007


On June 4, 2007, Fasken Martineau partner Jon Levin was quoted extensively in an article discussing the need to respect minority shareholders in The Deal, a special M&A supplement in the Globe and Mail .

Levin advised the Special Committee and new independent directors of Sears Canada during the attempted and failed privatization of Sears Canada by majority shareholder Sears Holdings.

"You've got to respect the minority shareholders, the independent directors and the process they undertake," Levin is quoted as saying. "The primary lesson of the case is that it is not enough for the transaction to be technically legal - it must also comply with the spirit in the law. The other key lesson: insiders, particularly controlling shareholders, will be held to a higher standard." According to Levin, other companies will now think to themselves "We're not going to make the same mistakes that Sears Holdings made."