Toronto Legal Blog

Commercial litigation: Sears Canada payout problems

Shareholders in Sears Canada were paid millions of dollars while the company was floundering in 2013. An  insolvency monitor appointed by the court has found that those payments are accompanied by unresolved concerns. The findings could lead to major commercial litigation in Canada. 

The monitor is preparing, in fact, to ask the Ontario Superior Court to begin a suit against a hedge fund and investment company owner regarding the payment of $509 million to company shareholders. Eddie Lampert and his hedge fund, ESL Investments, were major shareholders in Sears Canada. Lampert is chairman of Sears Holdings in the U.S. The monitor alleges that Lampert and two former directors of Sears Canada had influence on the payout decision.

Mergers and acquisitions: Energy outfits ink billion-dollar deal

A $5.5 billion agreement has just been signed between Encana Corp. and Newfield Exploration. In the mergers and acquisitions deal in Canada, Encana will not only be getting all of Newfield's shares of common outstanding stock, but will also take on more than $2 billion of Newfield's net debt. This marks Encana's most ambitious acquisition to date.

Together, Encana and Newfield churn out 577,000 barrels of oil-equivalent per day. Three-hundred thousand barrels of that are liquids. The deal will be closing in the first quarter of next year at which time the company is planning to hike dividends by 25 per cent with an expansion of share buyback to $1.5 billion.

Business and commercial: Lack of cannabis on legal market

Apparently there isn't nearly enough legal cannabis available for consumers. In business and commercial news, since cannabis use became legal earlier in October, supplies have been limited in Ontario, which, experts say, may push many back to the black market for their pot purchases.  The provincial government is citing unbelievably high demand and labour rumblings at Canada Post for the issues.

Ontario received more online orders for marijuana within 24 hours of legalization than all other provinces combined, according to the Ontario Cannabis Store (OCS). Despite the large numbers of orders, the OCS says it will be able to meet the demand and has already increased capacity to meet that demand. Meanwhile, Canada Post began rotating strikes at many of its outlets, slowing down shipments.

Mergers and acquisitions: 2 Ontario hydro companies ink deal

Guelph Hydro Electric Systems Inc. (Guelph Hydro) and Alectra Utilities Corporation will be joining forces. In mergers and acquisitions news, the Ontario Energy Board (OEB) gave the go-ahead for the merger to take place. The potential union met all the specifications of the OEB's no harm test.

There are conditions that have to be met upon the Jan. 2019 closing, but if all goes as planned, the City of Guelph will get an almost 5 per cent ownership of Alectra in addition to a permanent seat of the company's board of directors. The utility will serve more than one million customers. The promise of higher dividends will allow Guelph to put more money into other services and infrastructure areas. 

Business and commercial: New NAFTA rules affect dairy farmers

The American government has added yet another restriction onto Canadian dairy farmers -- concessions regarding skim milk and other milk products. The move affects the business and commercial world of Canada's dairy farmers. In fact, experts say new North American Free Trade Agreement rules could really affect the dairy industry's growth in Canada and the ability the industry has of getting rid of excess product.

Canada has opened almost another 4 per cent of the dairy market in the country to Americans as part of the new deal. But the deal also imposes added restrictions onto Canadian dairy farmers in being able to export certain dairy products like skim milk and milk powders and proteins. The United States was instrumental in getting rid of the Class 7 pricing system to bring their dairy products in line price wise with their Canadian counterparts.

Mergers and acquisitions: Top drilling company eyes third largest

The largest drilling company in the nation is making a bid for the third largest. When it comes to mergers and acquisitions headlines in Canada, Calgary's Precision Drilling Ltd. is making them by looking to acquire Trinidad Drilling Ltd. to a tune of $540 million. The all-share offer was spurred on by Trinidad Drilling's attractive American rig fleet.

Precision Drilling says its primary objective isn't in acquiring other firms, but the company's CEO said this deal was too sweet to pass up. Since both companies have focused on North America and the Middle East, it is hoped that this acquisition will sustain Precision's growth. The white knight offer is backed by Trinidad Drilling and it has suggested to its shareholders to support the offer. Meanwhile, Trinidad Drilling has also advised its shareholders to continue to reject a hostile takeover bid by Ensign Energy Services Inc.

Mergers and acquisitions: REIT closes multi-million-dollar deal

A major real estate investment trust recently closed on a multi-millon dollar property in a high-profile Calgary business centre. True North Commercial Real Estate Investment Trust (REIT) of Canada has been busy in the world of mergers and acquisitions by securing the 148,000-square-foot property for $26.75 million, which closed in September. The property sits on more than 11 acres close to Calgary International Airport and to the city's main highway. 

The building is fully occupied by a single tenant with a remaining lease of more than five years on average. The property also has 531parking spots. A portion of the financing for what REIT is now calling The Calgary Property, came from publicly traded shares. There is also a first mortgage on the property for more than $17 million at an interest rate of 4.02 per cent over four years.

Commercial litigation funding on the upswing in Canada

Getting into a legal battle can be incredibly hard on the pocketbook for a business owner. But those battles can also be quite lucrative and that's why some investors are choosing to fund litigation in hopes of sharing in the possible proceeds. Some business owners in Canada find it difficult to pay for expensive lawsuits, but there are some investors who will wager on commercial litigation cases like those regarding patents and trademarks or contract disputes and will step up to the plate to foot the bill.

With the promise of making a pretty penny, litigation funding in Canada has been increasing in popularity. There are also litigation funder companies in existence, which the courts began to allow in 2015 under the stipulation that litigation funders avoid creating an environment that could incite litigation. Litigation funders will give advances for legal fees, and pay various other costs when the case is successful.

Mergers and acquisitions: Gold mine looking for new owner

A Canadian gold company is searching for a new owner. Gold Mine Inc. is working with an investment bank to find parties interested in inking a deal amid its growing costs and operating issues. It is not averse to a mergers and acquisitions-related deal and is looking at all options including the divestment of certain mines it owns and operates in Canada and the United States. New Gold has struggled to make targets at its main mine in Ontario. 

Shares in New Gold stock did jump, however, after the company recently named a new CEO. New Gold stocks were some of the most traded on Bay Street over the last week or so. The mergers and acquisitions of gold mines around the world has dropped this year from 259 in 2017 to 204 at the same point this year.

Business and commercial: Americans subject to Canadian ridicule

Canadians who are world-renowned for being nice, but apparently they aren't being particularly kind to American citizens who are living and working in Canada. According to a Canadian newspaper, when it comes to the business and commercial world, Canadians have an ax to grind against their neighbours to the south, and it isn't helping to entice talented business-minded Americans to cross the border for work. And it's not boding well either for Canada's reputation for having amicable citizens.

A recent Swiss study showed this trend started emerging after the last presidential election in the States. Canadians traditionally like to set themselves apart from their American cousins and that sometimes involves not-so-flattering anecdotes or stories about Americans. A recent survey of American white-collar workers in Canada shows that these people are getting tired of the anti-American jokes and comments from their Canadian co-workers, which have become more blatant over the last while.

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