Types of disputes in which valuations occur
There are a number of different types of cases in which evidence of the valuation of shares may be received by a Court:
1. Events triggered under unanimous shareholders agreements, in which case the basis of the valuation should be defined by the terms of the agreement.
2. Shareholder dissent rights are triggered by a variety of significant corporate changes, under both the CBCA (s. 190) and the ABCA (s. 184):
(a) amendment of articles to add, change or remove provisions restricting issue or transfer of shares;
(b) amendment of articles to add, change or remove restrictions on businesses corporation may carry on;
(d) continuance under laws of another jurisdiction;
(e) sale, lease or exchange of all or substantially all of the corporation’s property.
Dissenting shareholders in these circumstances are entitled to have their shares purchased by the corporation at their “fair value”.
3. Compulsory purchase or “squeeze-out” provisions are triggered in a takeover bid by the tender of 90% or more of the shares of any class of shares to which the bid relates, other than those held by the bidder, under both the CBCA s. 199 and the ABCA s. 187-198. The purchaser is in these circumstances entitled to acquire the remaining shares at their “fair
4. The Court has the option to order that shares be purchased where there has been “oppression of the minority”, triggered under CBCA s. 242 or ABCA s. 234 by corporate conduct which is “oppressive or unfairly prejudicial to or unfairly disregards the interests of any security holder, creditor, director or officer”.
5. Under Ontario Securities Commission Policy 9.1, an independent valuation must be prepared in a number of circumstances- takeover bids by insiders, their associates or affiliates, bids by the issuer to re-acquire shares, going private transactions, and various types of related party transactions. In the context of Policy 9.1, “value” is defined to mean “fair market value, unless the context dictates otherwise”.
6. Matrimonial property disputes.
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