A $52 billion takeover of Canada’s largest telecommunications company, BCE Inc., appears to be back on track, after being approved by the Supreme Court of Canada earlier today. “The decision of the [Quebec] Court of Appeal is set aside and the trial judge’s approval of the plan of arrangement is affirmed,” the Supreme Court judges said in a 7-0 decision, allowing the leveraged buyout to go ahead, despite legal objections from bondholders. “We’re pleased with the Supreme Court’s decision,” said Deborah Allan, on behalf of the Ontario Teachers’ Pension Plan and its private equity partners. “We’re continuing to work to complete an acquisition of BCE.” The ruling sets an important precedent in favour of the property rights of business owners, confirming that the duty of corporate directors is to maximize value for shareholders, rather than balancing the demands of multiple interested parties. Although this principle has long been promoted by the business community, this is the first time it has been definitively solidified in Canadian law. “The business world has always said that, but it really has never got the imprint of the Supreme Court of Canada, or even superior courts in Canada like the courts of appeal,” said Richard McLaren, a business law professor at the University of Western Ontario. “It looks like the idea that some account should be taken of other stakeholders within the corporate entity, principally bond-holders in thi ...
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A $52 billion takeover of Canada’s largest telecommunications company, BCE Inc., appears to be back on track, after being approved by the Supreme Court of Canada earlier today. “The decision of the [Quebec] Court of Appeal is set aside and the trial judge’s approval of the plan of arrangement is affirmed,” the Supreme Court judges said in a 7-0 decision, allowing the leveraged buyout to go ahead, despite legal objections from bondholders. “We’re pleased with the Supreme Court’s decision,” said Deborah Allan, on behalf of the Ontario Teachers’ Pension Plan and its private equity partners. “We’re continuing to work to complete an acquisition of BCE.” The ruling sets an important precedent in favour of the property rights of business owners, confirming that the duty of corporate directors is to maximize value for shareholders, rather than balancing the demands of multiple interested parties. Although this principle has long been promoted by the business community, this is the first time it has been definitively solidified in Canadian law. “The business world has always said that, but it really has never got the imprint of the Supreme Court of Canada, or even superior courts in Canada like the courts of appeal,” said Richard McLaren, a business law professor at the University of Western Ontario. “It looks like the idea that some account should be taken of other stakeholders within the corporate entity, principally bond-holders in thi ...