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Highlights
CORPORATE LAW
BCE and Directors' Duties: a Fork in the Road
Jeffrey G. MacIntosh
Jeffrey MacIntosh examines the decision of the Supreme Court of Canada in Re BCE Inc., which confirms the fundamental alteration of Canadian corporate law begun in 2004 by the Supreme Court's decision in Peoples Department Stores Inc. (Trustee of) v. Wise. Peoples and BCE reject the principle of "shareholder primacy," under which directors' duties, though formally owed to "the corporation," are in substance owed to the shareholders. Thus, directors of both public and private companies are no longer permitted to focus on shareholder welfare in their decision-making process. Rather, they must decide what is in the best interests of the corporation itself, ranking shareholder interests no higher than those of any other corporate constituency. The author notes that Peoples and BCE have important implications for board decision-making procedures. Properly crafted, such procedures can permit directors to continue to focus on shareholder interests, while reducing to a minimum any potential liability to other corporate constituencies. The Supreme Court's decision also has important implications for the negotiating and drafting of corporate contracts, particularly those with key constituencies such as bondholders and employees. Finally, corporate counsel must ensure that directors, senior officers, and other corporate spokespersons carefully tailor their communications with the outside world so as not to give rise to "reasonable expectations" from which extra-contractual rights against the corporation may arise.
LEGISLATION (QUEBEC)
Quebec's New Securities Transfer Act Impact on
Current Commercial Practices
Daniel Bourque
With the adoption of An Act Respecting the Transfer of Securities and the Establishment of Security Entitlements (the "Quebec STA"), Quebec has now joined Ontario, British Columbia, Alberta and Newfoundland in implementing legislation largely identical to that in force in the United States. The Quebec STA creates new legislation and amends the Civil Code of Quebec in an effort to provide certainty to the rules that govern the transfer of securities and the taking of security interests in them. Daniel Bourque provides a general understanding of the Quebec STA and an awareness of the impact it will have on current commercial practices. The Quebec STA is very similar to its Ontario counterpart and uses the same concepts and terminology. The author notes that the Quebec STA provides for a one-year transition period that expires on December 31, 2009. This is of special importance for secured parties who hold movable hypothecs or pledges of securities.
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Board
Jeffrey G. MacIntosh
Editor-in-Chief
Faculty of Law, University of Toronto
Graham P.C. Gow
McCarthy Tétrault LLP
Kathleen L. Keller-Hobson
Bennett Jones LLP
Martin Elliot Kovnats
Aird & Berlis LLP
C. Ian Kyer
Fasken Martineau DuMoulin LLP
Alison R. Manzer
Cassels Brock & Blackwell LLP
Neill May
Goodmans LLP
Rosemary Newman
Davies Ward Phillips & Vineberg LLP
Lydia Salvi
Cassels Brock & Blackwell LLP
Jeffrey Singer
Stikeman Elliott LLP
Philippe Tardif
Borden Ladner Garvais LLP
Chris Van Loan
Blake, Cassels & Graydon LLP
Robert M. Yalden
Osler, Hoskin & Harcourt LLP
Ava G. Yaskiel
Ogilvy Renault LLP |