The Origins of the Dispute
BCE shareholders holding 97.93% of the outstanding BCE
common shares voted in favour of the takeover. A group of
debenture holders (comprised of some of the largest pension
funds and investment firms in Canada) objected to the
transaction, which was proceeding by way of a statutory plan of
arrangement under the Canada Business Corporations Act
(CBCA).
A statutory plan of arrangement is an attractive method for
taking over a company because, among other things, it permits
the acquiror to purchase 100% of the shares of the target
company in one step and, in addition, it permits
reorganizations or modifications to the corporate structure to
achieve tax planning purposes that might not otherwise be
available. However, one of the criteria for a statutory plan of
arrangement is that it requires approval by the Court.
