New Guidance On Special Committees And Going Private Transactions

Introduction

The Ontario Securities Commission’s (OSC) reasons for its decision in Re The Catalyst Capital Group Inc.  [PDF] have important disclosure and procedural implications for material conflict of interest transactions. Although the OSC did not cease trade the privatization proposal by a group of shareholders led by Hudson’s Bay Company (HBC) executive chairman Richard Baker (the Baker Group), it ordered remedial disclosure to address a number of deficiencies as well as the mailing of a blacklined circular to HBC shareholders. In addition, the OSC was critical of the fact that certain business judgments were made by HBC’s lead director prior to the formation of a special committee.