Advocate Daily Post
A recent Ontario Superior Court decision may provide companies with more clarity as to how they can defend themselves against dissident shareholders who wage proxy battles in the media, says Toronto corporate finance and securities lawyer Daniel Rothberg.
Smoothwater Capital Partners LP I v. Equity Financial Holdings Inc., is the latest attempt at achieving balance between companies and dissident shareholder groups engaged in proxy fights, says Rothberg, partner with Basman Smith LLP. Until recently, he adds, any party wishing to solicit proxies was required to first prepare and disseminate a proxy circular before any solicitation could take place. This requirement, explains Rothberg, greatly favoured management (who have the company’s resources at their disposal) as generally, only well-organized and well-funded dissident groups could mount serious proxy campaigns.