PROXY BATTLES
PROXY
LITIGATION
IN CANADA
PROXY BATTLES HAVE BECOME
A FIXTURE IN CORPORATE CANADA
AND LITIGATION IS PART OF THE MIX
PHOTO: REUTERS
BY SANDRA RUBIN
SINKING SHARE PRICES are leading shareholders on both sides of the
border to launch proxy battles. But these days, in Canada, it is quite likely to be a US shareholder in the thick of the action, challenging the establishment on a range of issues from board
shake-ups to the right to requisition shareholder meetings.
Canada's capital markets, once as courteous as the Mounties on Parliament Hill, are becoming known for bruising proxy contests.
"The hallmark of recent Canadian proxy battles is they're nasty, brutish and long," says
litigator Orestes Pasparakis, co-chair of the Canadian special situations team at Norton Rose
Fulbright Canada LLP. "Recent developments have encouraged a very aggressive and litigation-focused response.
"Proxy battles have come to Canada with vigor and no company is immune from attack.
What we've seen in the past two years is that even big companies, relatively well-run companies, are being attacked."
While the country has had its share of proxy contests over the years, with a couple of notable
exceptions they were confined to small-cap companies, often junior miners.
Not anymore. Within a 12-month period in 2012–2013, three of Canada's 30 largest companies went through proxy fights. If you take the country's six big banks out of the equation (they
are tightly regulated) that is one in eight, a high proportion.
www.lexpert.ca | LEXPERT • December 2013 | 27
