Bill C-15

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Royal Assent

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	Restructuring Transactions
Restructuring transactions	39.2 (1) Where an order has been made under paragraph 39.13(1)(a), the Corporation may, in addition to and not in lieu of any other of its rights and powers, carry out, or cause the federal member institution to carry out,
	(a) a transaction or series of transactions that involves the sale of all or part of the shares or subordinated debt of the federal member institution;
	(b) a transaction that involves the amalgamation of the federal member institution;
	(c) a transaction or series of transactions that involves the sale or other disposition by the federal member institution of all or part of its assets or the assumption of all or part of its liabilities, or both; or
	(d) any other transaction or series of transactions the purpose of which is to restructure a substantial part of the business of the federal member institution.
Transactions for disposition of assets, etc., or restructuring	(2) Where an order has been made under paragraph 39.13(1)(b), the Corporation, as receiver, may, in addition to any other of its rights and powers, carry out
	(a) a transaction or series of transactions that involves the sale or other disposition by the Corporation as receiver of all or part of the assets of the federal member institution or the assumption by another person of all or part of its liabilities, or both; or
	(b) any other transaction or series of transactions the purpose of which is to restructure a substantial part of the business of the federal member institution.
Completion of transaction	(3) Where the Corporation considers that a transaction or series of transactions referred to in subsection (1) or (2) has been substantially completed, it shall cause a notice to that effect, specifying the date on which the transaction or series of transactions was, in the opinion of the Corporation, substantially completed, to be published in the Canada Gazette.
Negative pledges inapplicable	(4) No restriction on the right of the federal member institution to amalgamate, to sell or otherwise dispose of any of its assets or to provide for the assumption of any of its liabilities, other than a restriction provided for in an Act of Parliament, applies so as to prevent the Corporation, the federal member institution or any other person from carrying out a transaction described in subsection (1) or (2).
Approval by Minister	(5) A transaction referred to in subsection (1) or (2) has no force or effect until it has been approved by the Minister.
Novation	(6) On approval of a transaction referred to in subsection (1) or (2), any person who assumes a liability of the federal member institution under the transaction becomes liable instead of the federal member institution to discharge the liability assumed.
Right transferable	39.21 Where the assets of a federal member institution that is a bank that are sold under a transaction described in section 39.2 include any outstanding security pursuant to section 426 or 427 of the Bank Act, the buyer of the assets may hold the security for the life of the loan to which the security relates and all the provisions of the Bank Act relating to the security and its enforcement continue to apply to the buyer as though the buyer were a bank.
Winding-up	39.22 (1) The Corporation shall apply for a winding-up order in respect of a federal member institution under the Winding-up and Restructuring Act if, in the opinion of the Corporation, a transaction or series of transactions referred to in section 39.2 is not substantially completed on or before the date that is
	(a) sixty days after the making of the order under subsection 39.13(1); or
	(b) the expiration of any extension of that period.
Deeming	(2) For the purposes of the Winding-up and Restructuring Act, the Corporation is deemed to be a creditor of the federal member institution.
Extension	(3) The Governor in Council may, on the recommendation of the Minister, grant one or more extensions of the period set out in subsection (1) for a further period of not more than thirty days but the last extension must expire not later than one hundred and eighty days after the making of the order under subsection 39.13(1).
	Compensation
Definitions	39.23 In sections 39.24 to 39.37,
``assessor'' « évalua- teur »	``assessor'' means a person who is appointed as assessor under section 39.29;
``dissenting offerees'' « pollicités opposants »	``dissenting offerees'' means the persons
	(a) who, immediately before the shares and subordinated debt of a federal member institution are vested in the Corporation by an order made under paragraph 39.13(1)(a), together held at least 10 per cent of the shares of a given class, or at least 10 per cent of the principal amount of the subordinated debt of a given class, of the federal member institution, or the assignees or successors in interest of those persons, and
	(b) who notify the Corporation within thirty days after the date of the notice of the Corporation under section 39.24 of their objection to the offer or to the fact that no offer is being made.
Offer of compensation	39.24 (1) Where an order has been made under paragraph 39.13(1)(a), the Corporation shall, within forty-five days after the date specified in a notice described in subsection 39.2(3) or the making of a winding-up order, give each person who, immediately before the making of the order under paragraph 39.13(1)(a), was the holder of shares or subordinated debt of the federal member institution, or the assignee or successor in interest of that person,
	(a) a notice containing an offer of compensation in an amount or with a value estimated by the Corporation to be equal to the compensation to which that person would be entitled under paragraph 39.32(1)(a); or
	(b) a notice stating that no offer of compensation is being made because the amount estimated by the Corporation to be equal to the compensation to which that person would be entitled under paragraph 39.32(1)(a) is zero.
Offer of compensa- tion - federal member institution	(2) Where an order has been made under paragraph 39.13(1)(b), the Corporation shall, within forty-five days after the date specified in a notice described in subsection 39.2(3) or the making of a winding-up order, give the federal member institution
	(a) a notice containing an offer of compensation in an amount or with a value estimated by the Corporation to be equal to the compensation to which the federal member institution would be entitled under paragraph 39.32(2)(a); or
	(b) a notice stating that no offer of compensation is being made because the amount estimated by the Corporation to be equal to the compensation to which the federal member institution would be entitled under paragraph 39.32(2)(a) is zero.
Compensa- tion may be cash or other compensation	(3) The compensation offered under paragraph (1)(a) or (2)(a) may be wholly or partly in cash or wholly or partly in such other form as the Corporation considers appropriate.
Contents of notice	39.25 (1) A notice under subsection 39.24(1) must be accompanied by the prescribed information and state
	(a) that an order has been made vesting the shares and subordinated debt of the federal member institution in the Corporation;
	(b) that each person who held, or is the assignee or successor in interest of a person who held, shares or subordinated debt of the federal member institution has thirty days from the date of the notice to accept or object to the offer or the fact that no offer is being made and to notify the Corporation of that acceptance or objection;
	(c) that, if the offer or the fact that no offer is being made is objected to by the persons, or the assignees or successors in interest of the persons, who together held at least 10 per cent of the shares of a given class, or at least 10 per cent of the principal amount of the subordinated debt of a given class, the compensation to be paid to those persons will be determined by an assessor; and
	(d) that a person who does not notify the Corporation of his or her objection within that period will receive the offered compensation or no compensation, if no compensation is being offered, but will have no right to contest its amount or value or the fact that no compensation is being offered.
Contents of notice	(2) A notice under subsection 39.24(2) must be accompanied by the prescribed information and state
	(a) that the federal member institution has ninety days from the date of the notice to accept or object to the offer or the fact that no offer is being made and to notify the Corporation of that acceptance or objection;
	(b) that, if the offer or the fact that no offer is being made is objected to by the federal member institution, the compensation to be paid will be determined by an assessor; and
	(c) that, if the federal member institution does not notify the Corporation of its objection within that period, it will receive the offered compensation or no compensation, if no compensation is being offered, as the case may be, and will have no right to contest the amount or value of offered compensation or the fact that no compensation is being offered.
Contents of notice	(3) A notice under subsection 39.24(1) may state that a transaction or series of transactions referred to in subsection 39.2(1) has been substantially completed and that the shares or subordinated debt are re-vested on the persons who held those shares or that debt immediately before the making of the order vesting those shares or that debt in the Corporation or, where, after the making of the order, the rights of those persons in respect of those shares or that subordinated debt have been assigned to or have devolved on other persons, those other persons.
Effects of notice	(4) A notice referred to in subsection (3) vests the shares or subordinated debt of the federal member institution on the date of the notice in the persons who held those shares or that debt immediately before the making of the order vesting those shares or that debt in the Corporation or, where, after the making of the order, the rights of those persons in respect of those shares or that subordinated debt have been assigned to or have devolved on other persons, those other persons.
Notice to Corporation	(5) A notice of a person's or a federal member institution's acceptance of or objection to an offer or to the fact that no offer is being made must be sent or delivered to the Corporation in accordance with the regulations.
Publication of notice	39.26 A notice under subsection 39.24(1) shall be published twice in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office or principal place of business of the federal member institution is located.
Securities in registered form	39.27 (1) A notice under subsection 39.24(1) shall be given to persons who, immediately before the making of the order under paragraph 39.13(1)(a), were registered as the holders of shares or subordinated debt by sending or delivering it to them in accordance with the regulations.
Securities in bearer or order form	(2) A notice under subsection 39.24(1) shall be given to persons who, immediately before the making of the order under paragraph 39.13(1)(a), were the holders of shares or subordinated debt in bearer or order form by publishing it in accordance with section 39.26.
Acceptance, etc., of offer	39.28 (1) An offeree is entitled to receive the offered compensation from the Corporation if the offeree, within thirty days after the date of the notice under subsection 39.24(1),
	(a) notifies the Corporation of his or her acceptance of the offer;
	(b) does not notify the Corporation of his or her acceptance of or objection to the offer; or
	(c) notifies the Corporation of his or her objection to the offer but there are no dissenting offerees in respect of the offer.
Acceptance, etc., of offer	(2) A federal member institution is entitled to receive the offered compensation from the Corporation if the federal member institution, within ninety days after the date of the notice under subsection 39.24(2), notifies the Corporation of its acceptance of the offer.
Appointment of assessor where offerees dissent	39.29 The Governor in Council shall, within sixty days after the date of a notice under subsection 39.24(1) or within one hundred and twenty days after the date of a notice under subsection 39.24(2), appoint as assessor a judge who is in receipt of a salary under the Judges Act, if, in the case of a notice under
	(a) subsection 39.24(1), there are dissenting offerees in respect of the offer or the fact that no offer was made; or
	(b) subsection 39.24(2), the federal member institution notifies the Corporation that it objects to the offer or the fact that no offer was made.
Notice to dissenters	39.3 The Corporation shall, in accordance with the regulations, send or deliver to each of the dissenting offerees or the federal member institution, as the case may require, a notice of
	(a) the appointment of the assessor;
	(b) the right of each of the dissenting offerees or the federal member institution to appear before and be heard by the assessor in person or by counsel; and
	(c) the fact that each of the dissenting offerees or the federal member institution will be bound by the assessor's determination as to the amount of compensation to be paid to
	(i) the dissenting offeree for the shares or subordinated debt of the class in respect of which there are dissenting offerees, or
	(ii) the federal member institution,
	as the case may be.
Determi- nation by assessor	39.31 (1) The assessor shall determine the amount of compensation to be paid to the dissenting offerees for the shares or subordinated debt of the class in respect of which there are dissenting offerees or to the federal member institution, as the case may be.
Factors to consider	(2) The assessor shall take into account such matters as the assessor considers relevant, and in all cases the assessor shall deduct the benefit derived from any special financial assistance provided directly or indirectly to the federal member institution by the Corporation or the Bank of Canada and the value immediately after re-vesting, as determined by the assessor, of any shares or subordinated debt re-vested in the dissenting offerees.
Amount of compensation	(3) The amount of compensation to be paid to dissenting offerees is
	(a) where the assessor determines that the Corporation has carried out or caused the federal member institution to carry out a transaction or series of transactions that involves the sale of all or part of the shares or subordinated debt of the federal member institution, or an amalgamation of the federal member institution, the amount that is equal to the portion of the consideration received under the transaction or transactions that is attributable to the value under the transaction or transactions of the shares or subordinated debt held by the dissenting offerees immediately before the making of an order under subsection 39.13(1);
	(b) where the assessor determines that the consideration obtained for the shares or subordinated debt or for the assets of the federal member institution that were sold or otherwise disposed of in a transaction or series of transactions referred to in subsection 39.2(1) was unreasonable in the circumstances, the amount equal to the value that the shares or subordinated debt that were held by the dissenting offerees immediately before the making of an order under subsection 39.13(1) would have had on the completion of the sale or other disposition had such consideration been reasonable, as determined by the assessor; or
	(c) in any other case, zero.
Amount of compensation	(4) The amount of compensation to be paid to a federal member institution is
	(a) where the assessor determines that the consideration obtained for the assets of the federal member institution that were sold or otherwise disposed of in a transaction or series of transactions referred to in subsection 39.2(2) was unreasonable in the circumstances, the amount by which the value of the consideration if it had been reasonable, as determined by the assessor, would have exceeded the value of the consideration obtained; and
	(b) in any other case, zero.
Compensa- tion	39.32 (1) In a case referred to in subsection 39.31(3), each of the dissenting offerees is entitled to payment from the Corporation of
	(a) the amount of compensation for the shares or subordinated debt of the class in respect of which there are dissenting offerees that were held by that dissenting offeree immediately before the making of the order under subsection 39.13(1);
	(b) if the assessor determines that it is just and reasonable that interest be paid, interest on the amount payable under paragraph (a) from the day on which the order was made under paragraph 39.13(1)(a) at the rate that is determined by the assessor to be just and reasonable; and
	(c) if the assessor determines that it is just and reasonable that costs in the proceeding before the assessor to make the determination referred to in section 39.31 be awarded to the dissenting offeree and against the Corporation, an amount that the assessor determines to be just and reasonable to award in respect of those costs.
Compensa- tion	(2) In a case referred to in subsection 39.31(4), the federal member institution is entitled to payment from the Corporation of
	(a) the amount of compensation;
	(b) if the assessor determines that it is just and reasonable that interest be paid, interest on the amount payable under paragraph (a) from the day on which the order was made under paragraph 39.13(1)(b) at the rate determined by the assessor to be just and reasonable; and
	(c) if the assessor determines that it is just and reasonable that costs in the proceeding before the assessor to make the determination referred to in section 39.31 be awarded to the federal member institution and against the Corporation, an amount that the assessor determines to be just and reasonable to award in respect of those costs.
Costs of Corporation	39.33 If the assessor determines that it is just and reasonable that costs in the proceeding before the assessor to make the determination referred to in section 39.31 be awarded to the Corporation and against some or all of the dissenting offerees or against the federal member institution, the amount that the assessor determines to be just and reasonable to award in respect of those costs constitutes a debt payable by those dissenting offerees or the federal member institution to the Corporation and may be recovered as such in any court of competent jurisdiction.
Determi- nations binding	39.34 (1) The determinations of an assessor under sections 39.31, 39.32 and 39.33 are final and conclusive and, except for judicial review under the Federal Court Act, are not subject to appeal to or review by any court.

Bill C-15

Restructuring Transactions

Compensation