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Bill C-91

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First Reading

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	(d) a dissenting offeree who does not notify the offeror in accordance with subparagraph (c)(ii) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and
	(e) a dissenting offeree must send the shares to which the take-over bid relates to the offeree cooperative within twenty days after the offeree receives the offeror's notice.
Notice of adverse claim	(3) Concurrently with sending the notice under subsection (2), the offeror must send to the offeree cooperative a notice of adverse claim in accordance with section 240 with respect to each share held by a dissenting offeree.
Share certificate	(4) A dissenting offeree to whom a notice is sent under subsection (2) must, within twenty days after receiving the notice,
	(a) send the share certificates of the class of shares to which the take-over bid relates to the offeree cooperative; and
	(b) elect
	(i) to transfer the shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the take-over bid, or
	(ii) to demand payment of the fair value of the shares in accordance with subsections (10) to (19) by notifying the offeror.
Deemed election	(5) A dissenting offeree who does not notify the offeror in accordance with subparagraph (4)(b)(ii) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid.
Payment	(6) Within twenty days after the offeror sends a notice under subsection (2), the offeror must pay or transfer to the offeree cooperative the amount that the offeror would have had to pay to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i).
Amounts	(7) The offeree cooperative is deemed to hold in trust for the dissenting shareholders the amounts it receives under subsection (6), and the offeree cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate.
When cooperative is offeror	(8) A cooperative that is an offeror making a take-over bid to repurchase all of the shares of a class is deemed to hold in trust for the dissenting shareholders the amounts that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i), and the cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate.
Duty of offeree cooperative	(9) Within thirty days after the offeror sends a notice under subsection (2), the offeree cooperative must
	(a) if the payments required by subsection (6) are made and the money or things are deposited as required by subsection (7), issue to the offeror a share certificate in respect of the shares that were held by dissenting offerees;
	(b) give to each dissenting offeree who elects to accept the take-over bid terms under subparagraph (4)(b)(i) and who sends share certificates as required by paragraph (4)(a) the money or thing to which the offeree is entitled, disregarding fractional shares, which may be paid for in money; and
	(c) if the payments required by subsection (6) are made and the money or things are deposited as required by subsection (7) or (8), send to each dissenting shareholder who has not sent share certificates as required by paragraph (4)(a) a notice stating that
	(i) the dissenting shareholder's shares have been cancelled,
	(ii) the offeree cooperative or some designated person holds in trust for the dissenting shareholder the money or other consideration to which that shareholder is entitled as payment for or in exchange for the shares, and
	(iii) the offeree cooperative will, subject to subsections (10) to (19), send that money or thing to that shareholder without delay after receiving the shares.
Application to court	(10) If a dissenting offeree has elected to demand payment of the fair value of the shares under subparagraph (4)(b)(ii), the offeror may, within twenty days after it has paid the money or transferred the things under subsection (6), apply to a court to fix the fair value of the shares of that dissenting offeree.
Application to court	(11) If an offeror fails to apply to a court under subsection (10), a dissenting offeree may apply to a court for the same purpose within a further period of twenty days.
Status of dissenter if no court application	(12) If no application is made to a court under subsection (11) within the period set out in that subsection, a dissenting offeree is deemed to have elected to transfer shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid.
Venue	(13) An application under subsection (10) or (11) must be made to a court having jurisdiction in the place where the cooperative has its registered office or in the province where the dissenting offeree resides if the cooperative carries on business in that province.
No security for costs	(14) A dissenting offeree is not required to give security for costs in an application made under subsection (10) or (11).
Parties	(15) On an application under subsection (10) or (11),
	(a) all dissenting offerees referred to in paragraph (4)(b) whose shares have not been acquired by the offeror must be joined as parties and are bound by the decision of the court; and
	(b) the offeror must notify each affected dissenting offeree of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel.
Powers of court	(16) On an application to a court under subsection (10) or (11), the court may determine whether any other person is a dissenting offeree who should be joined as a party, and the court must then fix a fair value for the shares of all dissenting offerees.
Appraisers	(17) A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of a dissenting offeree.
Final order	(18) The final order of the court must be made against the offeror in favour of each dissenting offeree and for the amount for shares as fixed by the court.
Additional powers	(19) In connection with proceedings under this section, a court may make any order it thinks fit, including an order to
	(a) fix the amount of money or things that are required to be held in trust under subsections (7) and (8);
	(b) order that the money or thing be held in trust by a person other than the offeree cooperative;
	(c) allow a reasonable rate of interest on the amount payable to each dissenting offeree from the date the offeree sends or delivers the share certificates under subsection (4) until the date of payment; and
	(d) order that any money payable to a shareholder who cannot be found be paid to the Receiver General, in which case subsection 327(3) applies.
Distributing cooperative	176. (1) If a shareholder holding shares of a distributing cooperative does not receive a notice under this Part, the shareholder may, within ninety days after the date of the end of the take-over bid or, if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after learning of the takeover bid, require the offeror to acquire those investment shares.
Obligation to acquire	(2) If a shareholder requires the offeror to acquire shares under subsection (1), the offeror must acquire the shares on the same terms under which the offeror acquired or will acquire the shares of the offerees who accepted the take-over bid.
	PART 12
	SECURITY CERTIFICATES, REGISTERS AND TRANSFERS
	Interpretation
Definitions	177. (1) The definitions in this subsection apply in this Part.
``adverse claim'' « opposition »	``adverse claim'', in respect of a security, includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security.
``bearer'' « porteur »	``bearer'' means the person who is in possession of a security that is payable to bearer or endorsed in blank.
``broker'' « courtier »	``broker'' means a person who is engaged in whole or in part in the business of buying and selling securities and who, in the transaction concerned, acts for, or buys a security from, or sells a security to a customer.
``delivery'' « livraison » or « remise »	``delivery'' means voluntary transfer of possession.
``fiduciary'' « représen- tant »	``fiduciary'' means a trustee, guardian, committee, curator, tutor, executor, administrator, representative of a deceased person, or any other person acting in a fiduciary capacity.
``fungible'' « fongibles »	``fungible'', in relation to securities, means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit.
``genuine'' « authenti- que »	``genuine'' means free of forgery or counterfeiting.
``good faith'' « bonne foi »	``good faith'', with respect to a transaction, means honesty in fact in the conduct of the transaction.
``good faith purchaser'' « acquéreur de bonne foi »	``good faith purchaser'', with respect to a security in bearer form or order form or a security in registered form issued to the purchaser or endorsed to the purchaser or endorsed in blank, means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of the security.
``holder'' « détenteur »	``holder'' means a person who is in possession of a security that is issued or endorsed to the person or to bearer or in blank.
``issuer'' « émetteur »	``issuer'' includes a cooperative that
	(a) is required by this Act to maintain a securities register; or
	(b) directly or indirectly creates fractional interests in its rights or property and issues securities as evidence of the fractional interests.
``overissue'' « émission excéden- taire »	``overissue'' means the issue of securities in excess of any maximum number of securities that the issuer is authorized by its articles or a trust indenture to issue.
``purchaser'' « acquéreur »	``purchaser'' means a person who takes an interest in a security by sale, mortgage, hypothec, pledge, issue, reissue, gift or any other voluntary transaction.
``security'' or ``security certificate'' « valeur mobilière » ou « certificat de valeurs mobilières »	``security'' or ``security certificate'' means a document issued by a cooperative that is
	(a) in bearer, order or registered form,
	(b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment,
	(c) one of a class or series or by its terms divisible into a class or series of documents, and
	(d) evidence of an investment share, participation or other interest in or obligation of a cooperative,
	but does not include
	(e) a membership share or a document evidencing a membership share, or
	(f) a member loan or a document evidencing a member loan.
``transfer'' « transfert »	``transfer'' includes transmission by operation of law.
``trust indenture'' « acte de fiducie »	``trust indenture'' means a trust indenture as defined in section 266.
``valid'' « valide »	``valid'' means issued in accordance with the applicable law and the articles of the issuer, or validated under section 196.
Negotiable instruments	(2) Except when a transfer is restricted and noted on a security in accordance with subsection 183(2), a security is a negotiable instrument.
Registerable form	(3) A security is in registered form if it
	(a) specifies a person who is entitled to the security or to the rights it evidences, and its transfer is capable of being recorded in a securities register; or
	(b) bears a statement that it is in registered form.
Order form	(4) A debt obligation is in order form if, by its terms, it is payable to the order of a person specified with reasonable certainty in it or to a person to whom it is assigned.
Bearer form	(5) A security is in bearer form if it is payable to bearer according to its terms and not by reason of an endorsement.
Guarantor for issuer	(6) A guarantor for an issuer is deemed to be an issuer to the extent of the guarantee, whether or not the obligation is noted on the security.

Bill C-91

PART 12

SECURITY CERTIFICATES, REGISTERS AND TRANSFERS

Interpretation