Canada - IFLR1000

Canada 

135 


Chamber of commerce: 

The Toronto Board of Trade 

1 First Canadian Place 

PO Box 60 

Toronto, Ontario M5X 1C1 


Tel: +1 416 366 6811 

Fax: +1 416 366 8406 

Email: info@bot.com 

Web: www.bot.com 

Professional body: 

The Canadian Bar Association 

500-865 Carling Avenue 

Ottawa, Ontario K1S 5S8 


Tel: +1 613 237 2925 / 

+1 613 237 1988 

Fax: +1 613 237 0185 

Email: info@cba.org 

Web: www.cba.org 

Developments in Canadian 

securities law 

Mark Trachuk 

Osler Hoskin & Harcourt 

Toronto 

The courts and securities regulators in Canada 

have demonstrated active oversight in a 

volatile market with several rulings, recommendations 

and proposals related to stakeholder 

protection in the context of capital 

markets transactions. Also, several new practices 

and opportunities have emerged in 

response to critical tax changes and market 

conditions. 

Directors’ duty to a corporation 

In December 2008, the Supreme Court of 

Canada released reasons for its decision in 

BCE Inc v 1976 Debentureholders. The 

Court affirmed the trial judge’s approval of 

the directors’ business judgment that the 

transaction at issue was in the best interests of 

the corporation and did not violate the reasonable 

expectations of the debenture holders. 

The court clarified that directors need to 

follow proper process when exercising their 

business judgment and reaffirmed that the 

directors’ fiduciary duty is owed to the corporation 

and not any particular constituency, 

thereby rejecting the Revlon duty to maximize 

shareholder value in change of control transactions. 

TSX shareholder approval requirements 

In April 2009, the Ontario Securities 

Commission (OSC) released its reasons for its 

decision concerning Hudbay Minerals’ proposed 

acquisition of Lundin Mining through 

an all-stock arrangement that would have 

resulted in just over 100% dilution to 

Hudbay. In January 2009, the OSC overturned 

the decision of the Toronto Stock 

Exchange (TSX) to not require Hudbay shareholder 

approval of the acquisition. 

The OSC considered the level of dilution 

extreme and concluded that permitting the 

transaction to proceed without shareholder 

approval would undermine the quality of the 

marketplace and be contrary to the public 

interest. The OSC’s decision has led to considerable 

uncertainty about the level of dilution 

at which shareholder approval will be 

required in Canada. The TSX has responded 

by proposing amendments to its rules that 

require a listed company to obtain shareholder 

approval when issuing more than 50% of 

its shares in connection with the acquisition 

of another public company. 

Confidentiality covenants 

In January 2009, the Ontario Superior Court 

held that Research in Motion (RIM) was in 

breach of its confidentiality and standstill 

agreements with Certicom in commencing a 

hostile bid for Certicom and enjoined RIM 

from proceeding with its bid. RIM’s standstill 

obligations had expired six months prior to 

the commencement of the bid but its confidentiality 

obligations remained in effect. The 

decision will impact the negotiation of confidentiality 

and standstill agreements as it 

arguably constructs a super-standstill from the 

confidentiality covenant regardless of the 

terms of the standstill. 

Canadian securities regulator 

The Expert Panel on Securities Regulation 

released its report, Creating an Advantage in 

Global Capital Markets in January 2009. The 

report recommended that the federal government, 

co-operatively with participating 

provinces, establish a single national 

Canadian securities regulator. The federal 

government responded by committing several 

million dollars in its 2009 budget to fund the 

Canadian Securities Transition Office, which 

is charged with drafting legislation for a single 

national regulator. 

According to the panel, as systemic failures 

continue to manifest themselves in the capital 

markets, such risks must be managed on an 

increasingly co-ordinated global basis. From 

Canada’s perspective, such management can 

only be done properly through a single 

national securities regulator. 

Spac listings 

In December 2008, amendments to the TSX 

Company Manual permitting the listing of 

special purpose acquisition companies (Spacs) 

on the TSX came into force. Already popular 

in the United States for a number of years, 

Spacs are shell companies that raise equity to 

undertake a yet-to-be-determined significant 

acquisition no later than 18 to 36 months 

after their IPO. The SPAC rules are expected 

to obtain broad support and provide a significant 

new avenue for capital creation and 

acquisition activity in Canada. 

Conversion of income trusts 

In October 2006, Canada’s minister of finance 

announced that income trusts would no 

longer be permitted to deduct income distributions 

for tax purposes commencing in 2011. 

This means that in 2011, most trust structures 

will lose the superior tax efficiencies that 

they currently enjoy, and trusts effectively 

have until 2011 to either be bought or convert 

to a conventional corporate structure. 

Immediately following the announcement, 

there was a significant flurry of M&A activity 

in the trust sector; but, with the credit crunch 

taking hold in mid-2007, that activity slowed 

to a trickle during the last year. However, 

while still relatively modest, conversion activity 

has picked up and is expected to significantly 

accelerate as we approach 2011. 

Financial hardship exemption 

Prevailing market conditions have placed 

many public companies in critical need of 

cash. Since financing options that require 

shareholder approval take time and may jeopardize 

an issuer’s opportunity to raise capital 

quickly, numerous listed companies in distress 

have relied on the financial hardship exemption 

from the shareholder approval require- 

2010 EDITION www.iflr1000.com

136 

Canada | Capital markets 

ments otherwise prescribed by the TSX rules 

and Multilateral Instrument 61-101. The 

exemption provides relief from the requirement 

for valuations and shareholder approval 

for certain related party financings where the 

issuer is in serious financial difficulty. 

Conclusion 

Securities regulators in Canada have demonstrated 

a willingness to more actively engage 

in market oversight. As new capital markets 

structures and practices continue to emerge in 

response to market volatility, such active oversight 

is expected to continue. 

Capital markets 

Recommended firms 

Tier 1 

Davies Ward Phillips & Vineberg 


Stikeman Elliott 

Torys 

Tier 2 

Blake Cassels & Graydon 

Goodmans 

McCarthy Tétrault 

Tier 3 

Bennett Jones 

Borden Ladner Gervais 

Fasken Martineau 

Ogilvy Renault 

Tier 4 

Cassels Brock 

Fraser Milner Casgrain 

McMillan 

Conservative investment strategies saved 

much of the country’s financial community 

from the substantial losses suffered elsewhere 

in the world. “We’re not recession-proof. I 

think we’re recession-resistant,” is how one 

lawyer describes Canada’s present economic 

health. And while most capital markets 

departments in the US were starved for deal 

flow, Canadian firms received a lower but consistent 

pipeline of transactions to keep them 

busy. 

The capital markets have remained open 

for Canadian financial institutions and commodities 

issuers in particular. The defensive 

investments made in gold through the fall of 

2008, during the freefall of market paranoia, 

exhibits that sector’s ability to sustain activity 

as well. “It was not nearly as deep a recession 

as we feared. There was more activity in traditional 

areas than we might have expected,” 

www.iflr1000.com 

comments one partner. That activity does not 

include IPOs, however, as the Canadian market 

has witnessed a virtual halt in initial public 

offerings along with the rest of the world. 

Recapitalisation is the foremost concern of 

Canadian banks. With their lending capabilities 

contracting considerably in the last year, 

financial institutions took advantage of market 

appetite for common stock and mediumterm 

note offerings throughout the year. 

CIBC (Canadian Imperial Bank of 

Commerce), RBC (Royal Bank of Canada) 

and Scotiabank are only a handful of the institutions 

restoring their balance sheets through 

such transactions. But despite this flurry of 

activity, Canada’s financial law firms were 

forced to rely on a broader base of issuer 

clients than in the past. Several lawyers 

emphasised the importance of mid-market 

clients because of their consistent activity in 

any market. 

Risk aversion has led to the renewed popularity 

of the bought deal structure for issuers. 

Developed nearly two decades ago as what 

lawyers describe as a defensive tactic against 

foreign investment banks, the entire issuance 

is pre-sold to an underwriter before being 

marketed to syndicated investors. Offerings 

for Manulife Financial and the Canadian 

miner Cameco, two of the largest in the market 

this year, operated on the bought deal 

model. Canadian issuers operating bought 

deals have also led a resurgence of the MJDS 

(multijurisdictional disclosure system) with 

the US, allowing issuers to pre-emptively file 

for SEC approval before the transaction 

occurs. 


Capital markets work has long been a specialty 

at Davies Ward. The firm consistently finds 

a role in complex transactions inside and outside 

Canada, thanks to the established practices 

of lawyers like Shawn McReynolds, 

Patricia Olasker and Carol Pennycook. Their 

reputations for high-quality representation 

have afforded Davies Ward the luxury of a 

sprawling client base that ranges from institutional 

clients to insurance providers to commodities 

companies. “I think they’re a fabulous 

firm. Pure excellence. I rank them as one 

of the best firms I’ve ever run across. They 

have a good operating model with a high ratio 

of partners,” says a client. 

Even in years of decreased activity you can 

expect to see the firm’s fingerprint at the top 

end of the market – like its representation of 

ING Group in that company’s C$2.16 billion 

($1.9 billion) secondary offering. The offering 

was staged to shed ING Group’s 70% stake in 

ING Canada through a syndicate of underwriters 

including CIBC and TD Securities. A 

simultaneous private placement was executed 

through lead co-agents CIBC World Markets 

and Goldman Sachs to complete the sale of 

ING’s stake. 

A public offering for Rogers 

Communications found the firm again acting 

for the issuer in August 2008. Offered in the 

US, the two-tiered issuance of debt securities 

consisted of $1.4 billion in ten-year notes and 

an additional $350 million in 30-year notes. 

Davies Ward served as Canadian counsel in 

the $1.75 billion transaction. 

Davies Ward has also made inroads in the 

infrastructure sector of late. Mandates 

through the firm’s project finance platform 

have also resulted in follow-on work for the 

capital markets department this year. Carol 

Pennycook and Sonny Bhalla advised 

Infrastructure Ontario in a $300 million private 

placement of bonds due in 2013 to a syndicate 

led by TD Securities. Funds raised 

through the sale will go towards public infrastructure 

development projects throughout 

Ontario. 

Leading lawyers 

Shawn McReynolds 

Patricia Olasker 

Carol Pennycook 


The broader corporate practice at Osler offers 

a carryover of issuer and underwriting work 

for the firm’s capital markets group. 

Longstanding institutional clients like the 

BMO (Bank of Montreal) and RBC are combined 

with the diversity of issuer-side clients 

such as mining companies Cameco and 

Kinross Gold Corporation. When asked 

about Osler’s standing in the market, one peer 

remarks: “I absolutely think Osler is a top-tier 

firm without a doubt.” Several peers also recommend 

the counsel of John Macfarlane and 

Desmond Lee, denoting the two as clear leaders 

of the practice. 

Operating in tandem between its Toronto 

and New York offices, Osler advised Cameco 

in its issuance of nearly 30,000 common 

shares in March 2009. Sold in a bought deal 

to a syndicate led by BMO Nesbitt Burns and 

RBC Dominion Securities, Cameco was able 

to sell an additional 3,400 shares through the 

exercise of an over-allotment option in the 

underwriting agreement. All told, the offering 

raised $460 million for Cameco. 

Osler also showed its expertise in the highyield 

market this year by representing the syndicate 

of underwriters for the $1.75 billion 

note offering by Rogers Communications. 

The public offering was issued in two tranches 

of ten-year 6.8% notes and 30-year 7.5% 

notes. The cross-border nature of the offering 

2010 EDITION

Capital markets | Canada 

137 

also exhibited Osler’s abilities to navigate the 

MJDS (multijurisdictional disclosure system) 

agreement with the US. 


Desmond Lee 

John Macfarlane 


The overall strength of Stikeman Elliott’s corporate 

group, particularly in the areas of banking 

and M&A, has brought the firm a broad 

swath of issuer and underwriting representations. 

Another year under the direction of 

Mihkel Voore as co-chair of the firm’s securities 

law group and head of corporate finance in 

Toronto has proved a seamless continuation of 

the firm’s capital markets work. 

Stikeman Elliott served as Canadian counsel 

to returning client TransCanada Corporation 

and its subsidiary, TransCanada Pipelines, in 

three separate cross-border debt and equity 

offerings from August 2008 through January 

2009. Stikeman lawyers have quickly become 

experts at the use of the MJDS (multijurisdictional 

disclosure system) system to access capital 

markets in the US and applied that expertise in 

the transactions. Securing pre-approval for 

issuances in the US through MJDS, the firm 

issued debt securities for $1.5 billion and $2 billion 

for TransCanada Pipelines. An equity 

issuance of common shares equalling $1.16 billion 

was also executed through the same MJDS 

process in November 2008. 

Stikeman Elliott also scored roles advising 

underwriting syndicates in two of the biggest 

offerings this year. First, in the largest share 

issuance by a domestic bank through 2008, the 

firm represented a syndicate led by RBC 

Dominion Securities for the $2.3 billion issue 

of common stock by RBC. Stikeman Elliott 

then advised the underwriters and agents running 

the syndicate for ING Canada’s $2.16 billion 

secondary offering and private placement 

in February 2009. 


Marc Barbeau 

Neville McClure 

Christopher Nixon 

Jeffrey Singer 

Mihkel Voore 

Torys 

The capital markets team at Torys has undergone 

a reshuffling of senior talent in the last 

year. The departure of Geoffrey Creighton to 

IMG Financial Group was offset by the hiring 

of two Ogilvy Renault partners, Charles 

Keizer and Valerie Helbronner, as well as by 

the addition of Daniel Raglan. But for all the 

movement of personnel, Torys maintained its 

top-tier ranking for another year through 

strong issuer representations like Manulife 

Financial and Eagle Credit Card Trust, in 

addition to performances for its standard list 

of underwriting clients. 

Manulife Financial hired Torys as issuer’s 

counsel to engineer the issuance and private 

placement of C$2.3 billion ($2.1 billion) in 

common shares. The syndicate underwriting 

the transaction included all Big Six Canadian 

banks. Similarly, Eagle Credit Card Trust 

retained the firm to develop and initiate its 

recent C$1.5 billion note programme. Torys 

designed the issuance to draw its value from a 

pool of credit card receivables co-owned by 

Eagle and President’s Choice Bank. 

Underwriting representations for Torys 

included the syndicate for Scotiabank’s C$1 

billion domestic debt offering in April 2009. 

Following their sale to a syndicate that included 

Scotia Capital, TD Securities, RBC 

Dominion Securities, HSBC Securities and 

Merrill Lynch Canada, proceeds from the tenyear 

notes were used to bolster the bank’s Tier 

2 capital. 

“They’ve endeavoured to stay in touch. 

They’re responsive. They’re a large firm that 

does have a presence in the US and can leverage 

that when required,” says a client. “Of the 

Canadian firms, they are better at trying to 

identify business opportunities.” 


Kevin Morris 

Karrin Powys-Lybbe 


A strong lending practice benefits the capital 

markets partners at Blakes through a host of 

financial institutions already familiar with the 

firm. One peer says that “Blakes has traditionally 

had a strong relationship with CIBC 

(Canadian Imperial Bank of Commerce),” 

going on to note the increasing quality of the 

work that the firm has turned out. 

In March 2009, Blakes represented CIBC 

Capital Trust as the issuer of $1.6 billion in 

debt. The transaction was aimed at reinforcing 

the bank’s Tier 1 capital. “I’ve been using 

them for probably five years ... primarily for 

securities-related work. I think they’re very 

responsive, very creative,” says a client. 

Blakes advised the underwriters for the 

C$511 million ($464 million) cross-border 

equity offering by Canadian Pacific Railway. 

Included in the syndicate were Scotia Capital, 

RBC Dominion Securities and Morgan 

Stanley of Canada. The firm also served as 

Canadian counsel to Bank of America on its 

$10 billion common stock issuance in 

October 2008. 

Another mandate for Blakes was representing 

CIBC World Markets as co-leader with 

Goldman Sachs Canada of an underwriting 

syndicate for an equity offering for Pan- 

American Silver Corp. The February 2009 

common share issuance raised $103 million 

for the mining company. One client singles 

out Ernest McNee for his talents, saying: “I 

find him very effective and very responsive.” 


Frank Arnone 

Pat Finnerty 

Brock Gibson 

Ernest McNee 

Peter O’Callaghan 

Goodmans 

Goodmans maintains a reputation for quality 

capital markets work despite its smaller size 

when compared to rivals. Much of this reputation 

can be attributed to the senior talent 

the firm has amassed over the years. Stephen 

Halperin and Jonathan Lampe, co-heads of 

the firm’s corporate and securities group, 

along with Stephen Pincus who handles REIT 

(real estate investment trust) work, receive 

high praise from competitors. 

In February 2009, Lampe and Neill May 

were hired by Newmont Mining for a dual 

offering of debt and equity worth $1.7 billion. 

Issuing common stock and convertible senior 

notes due in 2012, Newmont’s fresh capital 

allowed the mining company to finance its 

acquisition of the AngloGold Ashanti stake in 

the Boddington mine of Australia. 

When Omers Realty announced its 

upcoming issuance of AAA debt in May 

2008, Goodmans was hired to advise the syndicate 

of underwriters and agents for the 

transaction. The private placement was executed 

in two stages, classifying $400 million 

of Series C notes and $200 million of Series D 

notes that were subsequently sold to the RBC 

Dominion Securities-led investor group. 


Stephen Halperin 

Jonathan Lampe 

Neill May 

Stephen Pincus 


The close relationships established between 

McCarthy Tétrault and its Canadian lending 

clients allow for a high amount of crossover 

work in the capital markets. The close-knit 

structure of the corporate finance group also 

gives added benefit to clients through a group of 

partners knowledgeable across varying transaction 

types and practices. This model of organi- 


138 

Canada | Banking 

sation simplifies transaction teams and decreases 

the ever-important costs of staffing a file. The 

work produced by the model speaks for itself. 

Representing a syndicate consisting of RBC 

(Royal Bank of Canada), TD Bank (Toronto- 

Dominion Bank), Scotiabank, BMO (Bank of 

Montreal), CIBC (Canadian Imperial Bank of 

Commerce) and National Bank of Canada, 

McCarthy negotiated the underwriting agreements 

behind Manulife Financial’s December 

2008 equity offering. Executed as a bought 

deal, the public offering raised $1 billion in tandem 

with a simultaneous $1.1 billion through a 

separate private placement. McCarthy also 

arranged $3 billion in lending facilities through 

the same syndicate for Manulife. 

As issuers’ counsel, McCarthy represented 

TD Bank in September 2008. Through the 

TD Capital Trust III, McCarthy engineered 

the issue of $1 billion in securities. Later in 

the year, the firm advised BMO in a highyield 

issuance worth C$450 million. Due in 

2017, the notes provided Tier 1 capital for the 

bank at the height of the economic downturn. 


Richard Balfour 

Jean Michel Deschamps 

Byran Gibson 

J Michael McIntosh 

Robert Metcalfe 

Barry Ryan 

For analysis of the other leading law firms in 

Canada’s capital markets please visit the 

website at www.iflr1000.com 

Bank lending 


Tier 1 




Tier 2 


Goodmans 


Tier 3 

Bennett Jones 




Torys 

Tier 4 

Burnet Duckworth & Palmer 


Macleod Dixon 

McMillan 


Financial services regulatory 


Tier 1 




Torys 

Tier 2 




Tier 3 



Goodmans 

The absence of subprime mortgage investment 

exposures and a history of conservative 

management have saved many Canadian 

financial institutions from the losses suffered 

in the US. But the contagions of fear and misperception 

still pose a hurdle, even in Canada. 

While transactional work has suffered, the 

need for regulatory advice remains consistent 

in the jurisdiction. “Banking has actually been 

a bright spot. Transactions are off across the 

board, but, fortunately, Canadian banks are 

relatively strong and can be acquirers,” says a 

partner. Following a flurry of recapitalisation 

transactions in the capital markets, many 

Canadian financial institutions now find 

themselves in an advantageous position. The 

question now is whether they will alter the 

business model that has prevented loss in 

order to improve post-recession market share. 

Banking and finance partners in Canada 

say they began noting the pullback of foreign 

financial institutions from the US and Europe 

as early as the spring of 2008. The speculation 

then, much as it is now, is whether Canada’s 

prominent investment banks and insurance 

companies will try to fill the void. “Who 

knows, it may be the rebound of the investment 

banks in Canada,” says one partner. 

“What we’ve seen previously is a gradual erosion 

of the Canadian investment banks to 

large American banks like JPMorgan, Bank of 

America, and Citi. Maybe since those guys are 

hiccupping at the moment, we’ll see the 

Canadian investment banks re-establish 

themselves.” 

This potential re-development of the 

domestic financial sector is already causing 

some ripples in the legal community as well. 

As the banks examine the events of the past 

year, and the legal advice they received, some 

Canadian counsel see a shake-up of the historic 

relationships that have come to define 

some firm’s finance departments. 

The prospect of any regulatory change in 

Canada is doubtful thanks to the financial sector’s 

limited subprime exposure. In fact, many 

see the Canadian system as a working model 

for the regulatory overhauls under discussion 

elsewhere in the world. This has allowed 

lawyers here a tempered optimism as firms 

find their corporate departments posting better-than-expected 

results through early 2009. 

“We essentially have been busier than ever in 

financial services, mainly because our clients 

and all the banks and insurance companies 

have been busy building capital,” says a partner. 


Blakes has engineered an enviable banking 

group, with a strong team that includes Kevin 

Fougere, Michael Harquail, Dawn Jetten and 

senior counsel James Christie. “I use Blakes 

exclusively,” says a client. “I use them for securities 

work and they’re very effective for that.” 

The firm’s client list includes a mix of foreign 

and domestic financial institutions, such as 

JPMorgan and the CIBC (Canadian Imperial 

Bank of Commerce). 

In fact, JPMorgan recently sought Blakes’ 

counsel in connection with their involvement 

in Teck Cominco’s acquisition of the Fording 

Canadian Coal Trust. Representing a syndicate 

led by JPMorgan, Blakes was able to construct 

a $4 billion senior term loan facility and 

a $5.8 billion senior bridge facility as part of 

an overall $14 billion financing package. The 

transaction was closed in October 2008. 

As part of the simultaneous rights offering 

and private placement of debentures for 

TimberWest Forest Corp, Blakes advised the 

arranger and syndicate negotiating changes to 

the issuer’s underlying credit facilities. Under 

Blakes’ counsel, the BMO Capital Markets 

and Rabobank Nederland-led syndicate 

amended TimberWest’s existing loan agreements, 

including the instalment of a new 

$250 million three-year revolving credit facility. 

Again in the forestry sector, the firm 

advised borrower Ainsworth Lumber on a 

recapitalisation programme in which Blakes 

negotiated the exchange of $824 million in 

debt for equity and $150 million in new unsecured 

notes. A new series of notes was also 

issued, equalling $200 million, and three 

credit facilities of equal worth were amended. 


James Christie 

Martin Fingerhut 

Kevin Fougere 

Dan Fournier 

Michael Harquail 

Dawn Jetten 

2010 EDITION

Mergers and acquisitions | Canada 

139 


McCarthy Tétrault is defined by its banking 

practice. Strong relationships with banks like 

BMO (Bank of Montreal), CIBC and 

Scotiabank give the firm a consistently dominant 

presence in the market. The fact that 

McCarthy represented BMO, CIBC, RBC 

(Royal Bank of Canada), Scotiabank and TD 

Bank (Toronto-Dominion Bank) through the 

restructuring of the asset-backed commercial 

paper (ABCP) market speaks volumes for its 

reputation. And given its strong track record 

with borrowers and lenders, it’s unsurprising 

McCarthy has been able to use its banking 

practice as a springboard for an equally reputable 

platform in project finance work. Barry 

Ryan is consistently mentioned by peers as the 

standout lawyer of the practice. 

McCarthy has made a practice out of representing 

syndicates of Canada’s financial institutions. 

Following a $2 billion equity offering by 

insurance provider Manulife Financial in 

which the firm represented a syndicate of 

underwriters including RBC, TD Bank, 

Scotiabank, BMO, CIBC and National Bank 

of Canada, McCarthy then negotiated the 

terms for a $3 billion 5-year term loan on 

behalf of the Big Six Canadian banks. 

In December 2008, McCarthy also advised 

BMO Nesbitt Burns and a syndicate of underwriters 

in separate debt and equity offerings for 

various investment arms of BMO. The first was 

a C$450 million ($408 million) issuance by 

BMO Capital Trust II in the form of Tier 1 

notes due in 2017. A second offering, this time 

by BMO of common shares, was executed days 

later, with the 33 million shares earning C$1 

billion for the bank. 


Jean Michel Deschamps 

Byran Gibson 

J Michael McIntosh 

Robert Metcalfe 

Barry Ryan 


Peers offer praise of Osler’s corporate abilities, 

a strong reputation that also extends to the 

firm’s banking and regulatory groups. A longstanding 

relationship with RBC (the Royal 

Bank of Canada) benefits Osler across practice 

areas, and peers view the cultivation of that 

relationship by Michael Matheson as one of 

the keys to the firm’s continued success. For 

regulatory matters, clients and peers recommend 

John Jason as the firm’s star practitioner. 

“John Jason is the one that I work with 

almost all of the time. He’s very thorough,” 

says a client. 

From April 2009, Jason and Stephen 

Sigurdson have been retained by BMO’s lifeinsurance 

arm, BMO Life. The two are handling 

regulatory matters associated with BMO 

Life’s acquisition of AIG’s (the American 

International Group) Canadian life-insurance 

division – a deal estimated in value at $375 million. 

Also, in May 2008, Osler handled 

Canadian regulatory matters for JPMorgan in 

connection with the investment bank’s acquisition 

of Bear Stearns. 

The Osler banking team’s diversity of capabilities 

earns recognition from clients. “I inherited 

them as a firm doing work for my company, 

and I’ve been very happy with them,” says 

one. “We started a new entity in Canada and 

they were instrumental in getting that done. 

And we added a new product to an existing 

company and they’re assisting us on that type of 

thing as well. We actually use a number of 

firms, but I would say they are our biggest vendor 

in terms of the range of work we’re involved 

in.” 


Richard Fullerton 

John Jason 

Etienne Massicotte 

Michael Matheson 

Frank Turner 


The lawyers at Stikeman Elliott have built a 

diverse corporate practice that makes them 

competitive across the board. Clients of the 

M&A group return for counsel in capital markets 

and banking matters. This cultivation of 

longstanding relationships is evident in the 

feedback received from Stikeman clients. “We 

use them for all our general corporate transactions 

in Canada. They’re basically our lead 

counsel [there],” says a client. “I recommend 

them for everything. In particular, their assistance 

for transactions has been phenomenal. 

We wouldn’t get business done without them. 

They’re that good.” 

In connection with Jubilant Organosys’ 

acquisition of Draxis Health, Stikeman 

advised the ICICI Bank Canada as lead 

arranger and lender. The $255 million acquisition 

finance package was the first executed 

by ICICI since its move into the Canadian 

market from its native India. Stikeman also 

advised ABN Amro as lender in the acquisition 

of Ipsco’s Canadian pipeline manufacturing 

business by the Evraz Group. The $575 

million financing was finalised in June 2008, 

allowing the Russian miner and steel manufacturer 

to consolidate its Canadian holdings. 


Michael Allen 

Jean Lamothe 

Daphne MacKenzie 

Torys 

The return of Torys to the first tier in regulatory 

work reflects the market’s regard for Blair 

Keefe. Along with Sunny Sodhi, Keefe is 

advising the Home Equity Income Trust in 

regulatory aspects of its conversion to a corporation. 

As a result of an Ontario Superior 

Court ruling that ordered the conversion, the 

trust has restructured into a publicly-traded 

corporation in Canada. This process includes 

the removal of existing units held in the trust 

and their conversion to public shares, allowing 

the trust to emerge as a public bank under 

the name HomEquity Bank. 

In lending work, Torys advised Manulife 

Financial as the borrower of a five-year term 

loan totalling C$3 billion ($2.7 billion). 

Torys negotiated the facility with a syndicate 

of banks including CIBC, RBC, Scotiabank, 

BMO, National Bank of Canada and 

Toronto-Dominion Bank. The firm also 

advised AV Minerals in refinancing an existing 

$3 billion bridge facility with ABN Amro, 

Bank of America, and Citibank. The refinancing 

was achieved through a rights offering by 

the mining company in tandem with the 

establishment of a new $982 million term 

credit facility. 


Adam Delean 

Michael Feldman 

Blair Keefe 

Jonathan Weisz 


Canada’s bank lending and financial services 

regulatory market please visit the website at 


Mergers and acquisitions 


Tier 1 



Goodmans 



Tier 2 

Bennett Jones 



Torys 

Tier 3 





Macleod Dixon 


140 

Canada | Mergers and acquisitions 

The Canadian M&A market witnessed a 

reduction in deal volumes last year similar to 

those seen in 2002-2003. Hostile market conditions 

allowed for few of the headline-grabbing 

deals seen in previous years and unravelled 

some of those that did make it to market. 

For many Canadian lawyers, the failed 

privatisation of BCE (Bell Canada 

Enterprises) signalled not only an end to 

years-long negotiations, but to the era of 

leveraged buyouts as a whole. The transaction 

was abandoned after an audit revealed that the 

$41 billion buyout was no longer an acceptable 

financial risk for the company. 

Restricted lending and poor debt spreads 

resulting from the credit crisis have forced 

Canada’s private-equity investors to retreat 

from their previous binge of leveraged buyouts. 

“It’s a very different climate than it was 

18 months ago, when you had private equity 

still enormously active,” says a partner. “The 

pension funds in Canada have suffered. 

They’ve got lots of problems to manage. We’re 

not seeing them provoke M&A situations.” 

The scarcity of financing has ultimately 

forced deal activity into the mid-market, producing 

the double-edged sword of sustained 

deal volume with lower overall values. “The 

pattern in Canada is there are still a lot of 

deals happening but it’s the size that’s fallen 

off,” says one partner. “There are some significant 

transactions that have happened, but the 

over-$1 billion deals you can count on the fingers 

of one hand.” 

According to lawyers here, this sudden 

focus on the mid-market has strained the 

bench strength of Canadian firms, favouring 

those with a stable of talent beyond their 

high-profile partners. Going forward, the ability 

to broadly staff lower-value files is seen as 

an area of growth for firms. 

Diminished stock prices have created 

marked dislocation between buyers and sellers, 

halting most deals in their preliminary 

stages. “That’s the biggest problem right now. 

It’s weird because other than AIG and people 

you would suspect would be sellers, the sellers 

are not so pushed that they’re lowering their 

prices. And the buyers aren’t going to pay 

those prices.” The gridlock has left most deals 

to wither on the vine as sellers come to terms 

with the valuations of the new, post-recession, 

reality. 


Blakes breaks into the first tier after a round of 

strong peer feedback concerning the firm’s 

commitment to quality in its M&A work. 

“They’ve been on an upward trend in number 

of deals and deal value over the past five 

years,” says one peer. 


With equally respected banking and 

finance platforms, the subsequent rise of 

Blakes’ M&A practice in the rankings exhibits 

the firm’s full-service strategy across practice 

areas and geography. One detail that doesn’t 

escape the recognition of Blakes’ peers is its 

presence in every province of Canada and its 

ability to staff cross-border files through 

offices in New York, Chicago, London and 

Beijing. With particular strength in the western 

Canadian provinces, energy and mining 

are strong focuses for the group. 

Brock Gibson is credited by peers as having 

given the M&A group at Blakes a resurgence 

as of late. Elected chairman of the firm 

in January 2009, Gibson is leading the 

response for Suncor Energy in its proposed 

merger with Petro-Canada, potentially the 

largest oil and gas transaction in Canada since 

2006. The $38.5 billion merger of rivals will 

create the largest Canadian energy company 

through a weighted share exchange that gives 

Suncor 60% ownership and Petro-Canada 

40% in the new company. The exchange and 

subsequent ownership percentages were determined 

by the existing pre-merger share prices 

of each company. 

Elsewhere in the energy sector, Blakes 

advised Nexen when the oil services company 

acquired an additional 15% interest in the 

Long Lake oil sands project from Opti 

Canada. Closing in January 2009, the $735 

million transaction gives Nexen an overall 

stake of 65%. 


Frank Arnone 

Pat Finnerty 

Brock Gibson 

Graham Smith 


While megadeals have disappeared from the 

market, the expertise harboured at Davies 

Ward has not. Peers still regard the firm’s 

M&A group as one of the most capable in 

Canada. Offering offices in Toronto, 

Montreal and New York, the firm has long 

focused on the types of transactions symbolised 

by their representation of BCE in the 

proposed privatisation of the Canadian telecoms 

company. 

Even with the proposal of the largest buyout 

in history occupying the firm, Davies 

Ward managed to take on a host of other 

complex matters. In September 2008, the 

firm advised the special committee of the 

board at Rothmans in its $2 billion acquisition 

by rival Philip Morris. May 2008 saw the 

firm represent the parent for the Toronto 

Stock Exchange, TSX Group, in its merger 

with the Montreal Exchange to create the 

TMX Group. The deal included issuance of 

15.32 million shares and $1.1 billion in cash 

paid to shareholders of the Montreal 

Exchange. 

“As far as I’m concerned, from an M&A 

perspective, they’ve got the best guys on the 

street,” says a client. “For takeover bids, which 

is our business, they are great. They know the 

statutes, all the rules. And from the practical 

side, their legal advice is a dose of practical 

reality – what you can get done in the circumstances 

– which I think separates them 

from everyone else in town. One other thing I 

like is they use very small teams and you’re 

only dealing with one or two guys over there 

at one time.” 


William Ainley 

Maryse Bertrand 

William Gula 

Kenneth Klassen 

Kevin Thomson 

Goodmans 

Goodmans has the ability to consistently 

appear on high-profile transactions – even 

with one of the smaller M&A groups in 

Canada and a single office, located in 

Toronto. “They punch above their weight,” 

comments one peer. And while rivals debate 

whether this setup is optimal for the long 

term in comparison to larger, more geographically 

diverse firms, few can deny the market 

presence Goodmans has been able to establish 

in recent years. 

The perennial talents of Stephen Halperin 

and Jonathan Lampe are highlighted by peers 

with regard to deal execution for clients. 

Through 2008, Lampe led the firm’s representation 

of the acquiring parties in the BCE 

buyout, including the Ontario Teachers 

Pension Plan and Madison Dearborn 

Partners. 

The firm engineered two simultaneous 

offerings of common stock and convertible 

senior notes for Newmont Mining 

Corporation as financing for an acquisition in 

February 2009. With $1.1 billion in fresh 

capital from the offerings in place, Goodmans 

then advised Newmont on its purchase of the 

remaining interest in the Boddington project 

from AngloGold Ashanti of Australia. To 

date, Boddington is the largest active gold 

mine in the world. 

Goodmans is also counselling Deutsche 

Bank and RBC Capital Markets as the financial 

advisors to Petro-Canada for that company’s 

proposed merger with Suncor Energy. 

With a combined value of $38.5 billion, the 

merger of oil and gas rivals will create 

Canada’s largest energy company. 

2010 EDITION

Mergers and acquisitions | Canada 

141 


Stephen Halperin 

Jonathan Lampe 

Dale Lastman 

Neill May 


Economic downturns produce their own 

stratification in terms of which law firms are 

in demand, and Osler hasn’t missed a step. 

“Osler is always a force to be reckoned with,” 

remarks one peer of the firm’s M&A practice. 

Representations like advising long-time client 

RBC (Royal Bank of Canada) in the $2.2 billion 

acquisition of the Royal Bank of Trinidad 

and Tobago have reinforced Osler’s reputation 

for cross-border expertise. Fifteen years with 

an established New York office stands as further 

proof. 

Osler’s strength is ultimately in its breadth 

of representations, a carryover benefit of having 

one of the leading corporate departments 

in Canada. “They were our corporate counsel 

and we’ve used them extensively – not just for 

corporate work but for some reorganisations,” 

says a client. “I think they’re excellent. I’ve 

been with a number of different companies 

over my career and worked with a number of 

major Canadian law firms, and I would say 

Osler is as good as any I’ve ever dealt with. It 

comes down to the individual you’re dealing 

with – and they did a great job with the technical 

advice they provided us.” 

Osler is currently serving as Canadian 

counsel to Nova Chemicals in its cross-border 

acquisition by IPIC (the International 

Petroleum Investment Company), the oil and 

gas investment arm of the Abu Dhabi government. 

The firm also advised the controlling 

shareholders of CHC Helicopter Corporation 

in its sale to First Reserve Corporation in 

August 2008. Singled out by competitors as a 

standout lawyer of the practice, Robert Yalden 

led the $3.7 billion transaction for CHC in 

Canada. 


Clay Horner 

Brian Levitt 

Mark Trachuk 

Frank Turner 

Robert Yalden 


“They’re always on the big deals. You see a 

consistency year after year,” says a rival partner 

of the M&A group at Stikeman Elliott. 

Indeed, Stikeman is nothing if not consistent. 

Ranked in the top tier for Canadian M&A for 

the last five years, the firm has built a stable of 

talent that brings it files like the recent representations 

of BCE and Teck Cominco. Brian 

Pukier, Richard Clark and William 

Braithwaite are viewed by peers as pillars of 

the practice, with William Rosenberg receiving 

particular praise from a client: “William is 

a leader there and he’s tremendous.” 

As co-counsel to BCE with Davies Ward 

Phillips & Vineberg, Stikeman lawyers helped 

create the privatisation strategy for the largest 

leveraged buyout in history, negotiating with 

an acquisition group of private-equity 

investors led by the Ontario Teachers Pension 

Plan. Despite the transaction ultimately failing 

due to deteriorating credit conditions, the 

two years of work on the file bears witness to 

the expertise and commitment at Stikeman. 

Beyond the financial services sector, 

William Braithwaite and Christopher Nixon 

led the Stikeman team in the acquisition of 

the Fording Canadian Coal Trust by rival 

miner Teck Cominco in October 2008. 

Already holding a minority stake in Fording, 

the $12.3 billion transaction gave Teck 

Cominco full ownership of the trust and also 

called upon the capital markets practice at 

Stikeman to reach completion. Teck Cominco 

was forced to issue 36 million Class B shares 

in co-operation with the establishment of a $4 

billion senior term loan facility and a $5.8 billion 

senior bridge loan facility. Further financing 

was obtained through the sale of Teck 

Cominco’s minority stake in Fording in 

preparation for the deal’s closing. 


William Braithwaite 

Richard Clark 

Curtis Cusinato 

Christopher Nixon 

Brian Pukier 

William Rosenberg 

Bennett Jones 

Bennett Jones is a premiere energy firm with 

an established presence in western Canada. 

“Bennett Jones are excellent. They’re probably 

the best known firm in Calgary and we use 

them a lot,” says one client. Although established 

in the west, Bennett Jones has begun to 

develop its brand more effectively in eastern 

markets. Recently, the firm’s growing Toronto 

presence was enhanced by the recruitment of 

Francis Allen from Borden Ladner Gervais. 

Bennett Jones advised Precision Drilling 

Trust in its eventual acquisition – through a 

series of unsolicited offers – of oil services 

provider Grey Wolf in December 2008. 

Estimated at a $2 billion value, the acquisition 

was finalised after three unsolicited bids 

by Precision and the procurement of financing 

commitments during the worst of the 

credit crisis. 

Also in December 2008, Bennett Jones 

again advised the acquirer in Riverstone 

Holdings’ acquisition of Gibson Energy 

Holdings. Valued at C$1.25 billion ($1.13 

billion), the acquisition of Gibson Energy 

gives private-equity player Riverstone assets 

including crude storage and processing facilities, 

and over 290 miles of pipeline. 


Alan Bell 

John Kousinioris 


Robust banking and project finance groups 

provide a healthy carryover of M&A deals 

from the financial services sector for 

McCarthy Tétrault. The firm’s coverage of 

western Canada supplements this with a presence 

in the energy sector – demonstrated this 

year by Richard Shaw’s involvement in the 

Suncor Energy/Petro-Canada merger. Senior 

partners Garth Girvan and David 

Woollcombe are considered by peers to be 

standouts in the practice. 

A returning client of the firm’s project 

finance group, Borealis Infrastructure retained 

McCarthy’s services in November 2008 for 

the unsolicited acquisition of the Teranet 

Income Fund. After delivering an original 

offer of $11 per unit for outstanding partnership 

units of Teranet and its subsidiaries, 

worsening economic conditions caused 

Borealis to revise their bid. After three months 

of negotiation, the deal was closed with an 

offer of $10.25 per unit for Teranet and its 

holdings, equalling $1.6 billion for the software 

developer. 

As foreign lenders retreated from Canada 

this year, those with strong relationships in 

the financial sector saw an uptick in asset sales 

related to balance-sheet correction. And 

thanks to its longstanding relationships with 

the domestic banks, it was no surprise that 

McCarthy acted in a number of these transactions. 

Scotiabank hired McCarthy to handle 

its $442 million cash acquisition of E*Trade 

Canada. As part of the acquisition, McCarthy 

relied on its banking expertise to navigate regulatory 

processes associated with uncoupling 

the online brokerage from its US parent. 


Richard Balfour 

Garth Girvan 

Richard Shaw 

David Woollcombe 


Ogilvy Renault has made a name for itself in 

M&A, servicing the financial sector in eastern 


142 

Canada | Project finance 

Canada through offices in Montreal, Quebec 

and Toronto. While the firm saw two of its 

M&A partners depart in the summer of 2008 

to rival firms, the return of another lawyer – 

partner Michael Fortier – to the Montreal 

office is a noteworthy addition. Fortier’s 

return comes after years of private sector work 

for TD Securities, Credit Suisse and, most 

recently, in public office as the minister of 

international trade for Canada. 

During May 2008, Ogilvy acted for the 

Montreal Exchange trading platform in its 

merger with the TSX (Toronto Stock 

Exchange). Ultimately called the TMX 

Group, the $1.3 billion merger integrated the 

TSX’s standard securities platform with 

Montreal’s futures and derivatives trading. 

Ogilvy lawyers also acted for long-time firm 

client RBC (Royal Bank of Canada) in the 

bank’s strategic acquisition of the Canadian 

commercial leasing division of ABN Amro. 

Closed in October 2008, at the height of 

uncertain market conditions, the deal left 

RBC with the largest bank-owned commercial 

leasing platform in Canada. 


Jean-Pierre Colpron 

Renaud Coulombe 

Terence Dobbin 

Marc Lacourcière 

Norman Steinberg 

Torys 

Two highlights in the energy sector have given 

Torys an impressive start to 2009. First, in 

February, the firm secured the role of lead 

counsel to IPIC (the International Petroleum 

Investment Company) on the acquisition of 

all outstanding shares of Nova Chemicals. 

Agreeing on $6 per common share, the $2.3 

billion acquisition also included IPIC assuming 

Nova’s debt obligations. Torys’ regulatory 

group lent their expertise to the transaction as 

well, clearing the way for IPIC to be the first 

sovereign wealth fund wholly to acquire a 

Canadian public company. 

The firm has also been chosen to represent 

Petro-Canada in response to the crude oil producer’s 

proposed acquisition by Suncor 

Energy. Yet to be finalised, the deal hinges 

upon a share exchange to allow the merger of 

the investor bases, giving 60% control to 

Suncor’s base and 40% to Petro-Canada. 

Torys also boasts a cross-border capability, 

aided by a New York office, which helps make 

it a consistent threat to market competitors. 

“They do good work and you see them on 

some of the bigger deals,” remarks a peer of 

the firm. In spite of the departure of Geoffrey 

Creighton for the general counsel position at 


firm client IMG Financial Group, Torys’ 

M&A group hasn’t missed a beat. 


Philip Brown 

Sharon Geraghty 


Canada’s M&A market please visit the 

website at www.iflr1000.com 

Project finance 


Tier 1 




Torys 

Tier 2 

Bennett Jones 





Tier 3 



Davis 


Gowling Lafleur Henderson 

Macleod Dixon 

McMillan 

Appetite for new project financings underwent 

a predictable reduction in the fall of 

2008 as the growing financial crisis restrained 

lenders’ already conservative balance sheets. 

What began as a potential banner year for 

some Canadian law firms’ project finance 

teams suddenly fell apart after Lehman 

Brothers’ collapse fuelled negative speculation 

in the market. Credit became a scarce commodity 

even for borrowers with historical 

relationships with banks. According to 

lawyers here, most loans operated below a 

$225 million threshold. 

In the spring of 2009, the lending environment 

showed signs of modest improvement. 

“The money is still there for good projects,” 

says one partner. But as deals entered 

preliminary stages, unanticipated market 

shifts became evident. Standard long-term 

debt had vanished as many foreign investment 

banks retreated from Canada. Replacing the 

typical 30-year agreements were mini-perm 

loans offering seven-to-ten-year commitments 

with Canadian institutions. The predominance 

of short-term money only compounded 

uncertainty in the market, raising refinancing 

concerns for borrowers and lenders alike. 

“The practical reality is that the only people 

taking the risk on long-term debt were 

institutional investors, and now they’re having 

second thoughts,” says a lawyer. With 

Canadian banks reluctant to rush into any 

new underwriting agreements, club deals 

dominate the market. 

The debate now focuses on whether 

Canadian institutions will become comfortable 

with extending loan horizons to match 

the 30-year terms typically offered by foreign 

lenders. Another question is whether Canada’s 

pension funds will discard their historical 

equity preference and begin taking debt positions 

on projects. Lawyers here say this would 

be a complete turnaround for pensions, who 

typically see concession schedule returns on 

project financings as too long. Still, after a 

year of uncertainty, the allure of a stable 

income stream cannot be underestimated. 

Infrastructure and renewable energy are 

the Canadian government’s focus in the near 

term. Ontario’s passage of the Green Energy 

Act has spurred deal activity in that province, 

with Infrastructure Ontario’s sponsorship of 

projects ranging from transit renovations to 

energy distribution technologies. The bulk of 

these projects have been contracted through 

PPPs (public-private partnerships) on the 

DBFM (design-build-finance-maintain) 

structure, but there has been debate as to 

whether the ratio of public-to-private investment 

should shift toward the government in 

the current market. 


Blakes is renowned for its work for borrowers 

and lenders in the energy sector. 

Representations like last year’s Southern 

Lights Project typify the high-profile work 

often awarded to the firm on the merits of 

partners like Daniel Fournier and Kevin 

Fougere in Calgary. Fournier and Fougere 

advised a host of financial institutions, including 

RBC (Royal Bank of Canada), Société 

Générale, Bank of Tokyo-Mitsubishi UFJ, 

ABN Amro and Mizuho Corporate Bank, to 

create separate credit facilities for Enbridge’s 

Southern Lights and Southern Access pipeline 

projects. With C$434 million ($393 million) 

for Southern Lights and $1.3 billion for 

Southern Access, the financing was secured to 

construct a pipeline carrying light hydrocarbons 

from the US midwest to oil refineries in 

the oil sands of western Canada. 

“We use Blakes quite a bit, especially on 

the west coast,” notes one client, praising the 

firm’s national presence – which includes 

offices across Canada. Lawyers at other firms 

also highlight the depth of talent in Blakes’ 

Vancouver office. “Anne Stewart and Ian 

2010 EDITION

Project finance | Canada 

143 

MacIntosh are strong, constant competitors,” 

says a partner at a rival firm. 

Aside from energy work, Blakes enjoys 

consistent success in the mining sector. In 

February 2009, Edward Perlmutter and Chris 

Javornik negotiated a $70 million credit facility 

for clients RMB Australia Holdings and 

Macquarie Bank as the lenders. The credit 

facility funded Apollo Gold and its Black Fox 

mine in Ontario. 


Kevin Fougere 

Dan Fournier 

Anne Stewart 


McCarthy Tétrault has built one of the preeminent 

projects groups in Canada, with 

offices in Vancouver, Calgary, Ottawa, 

Toronto and Montreal, and a deep pool of talent. 

“We have always thought very highly of 

them,” says one peer of the group, which 

includes Byran Gibson, David Lever, Gordon 

Willcocks and Marc Dorion. 

Possessing established platforms in infrastructure 

as well as traditional and renewable 

energies, McCarthy receives high praise from 

past clients. “We consider McCarthy as our 

most important counsel from a project 

finance standpoint. We’ve been using them 

since as far back as I can remember,” says a 

client. “We use a lot of other firms but I 

would put McCarthy at the top of the list. 

They’re very knowledgeable from the institutional 

long-term debt perspective. They 

understand the nature of our business well.” 

Byran Gibson comes highly recommended for 

his expertise in public-private partnerships. 

McCarthy has extended its presence in the 

renewables industry this year. Most notably, 

two wind farm deals exhibit not only the 

firm’s knowledge but also its ability to execute 

deals despite the financial downturn. Marc 

Dorion led a transaction for Innergex in 

November 2008, establishing credit facilities 

equalling C$53.4 million ($46.1 million) for 

a 109.5MW wind farm in Carleton, Quebec. 

The firm also advised Manulife Financial as 

the lender in an $89 million credit facility for 

a 51MW wind farm in New Glasgow, Nova 

Scotia. 

In infrastructure work, the firm has most 

recently been involved in the refinancing of 

hospitals throughout the Ontario region. The 

Bluewater and Henderson hospitals both 

hired McCarthy’s Byran Gibson in March 

2009 to renegotiate covenant terms for contracts 

equalling C$123 million and C$95 million, 

respectively. 


Linda Brown 

Marc Dorion 

Stephen Furlan 

Byran Gibson 

David Lever 

Gordon Willcocks 


Osler rounds out its strong reputation for corporate 

work with a project finance group that 

has focused recently on the Ontario infrastructure 

sector. Senior talent like Bob 

Beaumont and Rocco Sebastiano in Toronto 

come recommended by peers for their knowledge 

of privatisation schemes and public-private 

investment models. As head of the firm’s 

energy group, Sebastiano is recognised for his 

engineering background, which came in useful 

during the firm’s involvement with the 

Deh Cho Bridge project in the Northwest 

Territories. 

In the last year, Osler secured crossover 

work from two returning projects clients. The 

firm was issuer-side counsel to the Greater 

Toronto Airports Authority for the establishment 

of a medium-term note programme 

worth $500 million. Acting again as issuer’s 

counsel, Osler also represented Hydro One on 

the creation of its $1.05 billion note programme. 

Advising Infrastructure Ontario, in conjunction 

with Fasken Martineau, Osler negotiated 

the C$261 million ($236 million) 

financing for the redevelopment of St Joseph’s 

Health Care and the London Health Sciences 

Centre, both in London, Ontario. 

Infrastructure Ontario was teamed with 

development partner EllisDon Corporation in 

the transaction. 


Bob Beaumont 

Harvey Kirsh 

Rocco Sebastiano 

Torys 

Already seen as having an enviable traditionalpower 

practice, Torys has set its sights on 

making inroads into the growing renewables 

sector. Hiring Valerie Helbronner and Charles 

Keizer in Toronto from rival Ogilvy Renault is 

a good start. Keizer, in particular, brings energy 

regulatory and compliance expertise that 

could prove increasingly valuable in the wake 

of Ontario’s passage of the Green Energy Act. 

Singled out by competitors as a standout 

in the practice, Jonathan Weisz led Torys’ representation 

of Aim Sop and Fortis Capital in 

the Aim Sop Phase I project. Weisz helped 

negotiate C$75 million ($67 million) in 

financing for the Cultus, Clear Creek, 

Frogmore, and Mohawk Point wind farms 

across Ontario. 

Longstanding client relationships are one 

significant reason for Torys’ consistency in the 

projects market. Hydroelectric developer and 

operator Brookfield Renewable Power hired 

the firm on two separate files in the past year, 

ranging from acquisition work to traditional 

project financing. In June 2008, Torys advised 

Brookfield in securing the $120 million 

financing for its 470MW Itiquira hydroelectric 

facilities in Mato Grosso, Brazil. Torys 

negotiated the financing with Calyon, Crédit 

Agricole and Export Development Canada. 

February 2009 saw Brookfield return to the 

firm to lead on its sale of 49.9% in Prince 

Wind farm and 50% in the Pingston hydroelectric 

facility to the Great Lakes Hydro 

Income Fund. Brookfield walked away from 

the transaction with $65 million and a 

50.01% exchangeable ownership of Great 

Lakes. 


Sabrina Gherbaz 

Krista Hill 

Alison Lacy 

Jonathan Weisz 

Bennett Jones 

With a reputation for oil and gas work in 

western Canada, Bennett Jones has made a 

concerted effort to further its brand in the 

infrastructure market to the east. Working 

with Infrastructure Ontario and the Niagara 

Health System, Bennett Jones secured $759 

million in commitments for a greenfield medical 

centre in St Catharines, Ontario. The 

DBFM (design-build-finance-maintain) project 

was the largest ever conducted by 

Infrastructure Ontario and was the most sizeable 

to receive financing since credit conditions 

worsened significantly in October 2008. 

In other hospital work, Bennett Jones advised 

TD Bank (Toronto-Dominion Bank) as the 

lender in $142 million designated for proposed 

developments and renovations to the 

facilities at Kingston General Hospital in 

Ontario. 

In the largest PPP (public-private partnership) 

for Canadian schools, Bennett Jones 

represented TD Bank, again as the lender, to a 

project developing 18 greenfield elementary 

and junior high schools in Alberta. The 

schools are to be divided equally between 

Edmonton and Calgary. As part of the shortterm 

debt tranche, TD Bank’s $15 million 

investment has a repayment horizon of 22 

months, following the openings of the new 

school facilities. 


144 

Canada | Restructuring and insolvency 


Mark Bain 

Bruce Barker 

Paul Blundy 


The projects group at Davies Ward has traditionally 

been focused on infrastructure, with a 

balanced practice between lender and sponsor 

in the PPP market. In a year when the 

Canadian government has adopted a similar 

focus, the firm has received consistent mandates 

in the sector and peers have taken 

notice. The recent addition of Nicholas 

Williams from rival Ogilvy Renault is also 

viewed by competitors as a significant gain for 

the practice. As a consequence of these developments, 

Davies makes the jump into the second 

tier following strong client and peer feedback. 

“I’m a sponsor equity investor and basically, 

for every project that I run, my personal 

preference is to work with the Davies team 

whether it’s here in Canada or the US,” says a 

client. 

Representing returning client Plenary 

Health, Davies Ward advised in connection 

with the developer’s winning bid for a DBFM 

greenfield medical facility in St Catharines, 

Ontario. Robert Bauer and Steven Martin 

advised Plenary in what was the largest PPP 

deal completed by Infrastructure Ontario 

upon its closing. 

“I’ve used Davies on every project I’ve run 

since 2004. As a result of my using them so 

much, and their knowledge base, they’re probably 

one of the best teams for what I do. Very 

responsive, very good people, and we get 

along well together. I consider them part of 

my team,” comments a client. 


Robert Bauer 

Steven Martin 

Carol Pennycook 

Nicholas Williams 


Fasken Martineau’s representations of project 

lenders has earned them a solid reputation in 

the market with peers. Benefiting from more 

than the occasional carryover of work from its 

standard banking practice, the projects group 

at Fasken has established itself through assignments 

like lender’s counsel in the redevelopment 

of the Niagara Health System. Plans for 

the $759 million public-private greenfield 

medical facility in St Catharines, Ontario 

reached financial closing in March 2009. The 

lending syndicate for the project included TD 

Securities, RBC Capital Markets, BMO 

Capital Markets and Société Générale. In the 


ongoing PPP funding of the construction of 

18 new schools throughout the province of 

Alberta, Fasken is again advising the lending 

syndicate. With $643 million in committed 

financing, the international syndicate includes 

the Sun Life Assurance Company, Manulife 

Financial, Canada Life, Bank of Ireland, 

Sumitomo Mitsui Banking, National 

Australia Bank, TD Bank (Toronto- 

Dominion Bank) and BMO (Bank of 

Montreal). Active in both transactions, partners 

Brian Kelsall and Ella Plotkin have 

already proved significant to the practice since 

their arrival at the firm in 2007. 

All this lending work is not to say that 

Fasken is a stranger to Canadian project sponsors, 

however. Closed in February 2009, the 

firm negotiated an $89 million financing 

package for RMSenergy Dalhousie 

Mountain’s development of a wind farm in 

Nova Scotia. 


Jon Holmstrom 

Brian Kelsall 

Ella Plotkin 


The recent departures of Jacques Demers to 

the private sector and Nicholas Williams to 

rival Davies Ward are viewed by competitors 

as significant blows to the projects team at 

Ogilvy Renault. In their absence much of the 

onus for the practice’s future has been shifted 

onto the shoulders of Merie-Anne Beavis, 

who competitors advertise as a very knowledgeable 

projects lawyer. Despite this shifting 

of personnel, Ogilvy’s clients give similar 

praise for the level of service available through 

the firm’s projects team. “They’re very high 

quality and they’re a top notch organisation,” 

says one client of the firm. 

Ogilvy represented Dexia Crédit Local and 

Depfa Bank in structuring the $206 million 

lending agreements for the PPP making additions 

to the Royal Jubilee Hospital. Working 

for the lenders, Ogilvy lawyers negotiated the 

DBFM project with ISL Health General 

Partnership and the Vancouver Island Health 

Authority. In other lender work, Ogilvy represented 

Manulife Financial, Sun Life Assurance 

Company, Great-West Life, and Industrial 

Alliance Insurance and Financial Services in 

the $200 million financing for the Bruce 

Nuclear Generating Station A. 


Merie-Anne Beavis 

Robert Borduas 


Drawing from its strong banking practice, 

Stikeman Elliott saw a number of lender representations 

cross over into the projects sector 

this year. In representing RBC Dominion 

Securities as the underwriter, Stikeman negotiated 

the $266 million in bond financing 

behind the PPP construction of Northwest 

Anthony Henday Drive in Edmonton. 

Stikeman also represented Dexia Crédit Local, 

Depfa Bank and the Bank of Ireland in 

arranging financing for the development of a 

new hospital facility in Surrey, British 

Columbia. 

One client describes the firm’s work as 

excellent in M&A and PPPs (public-private 

partnershships). “They certainly know their 

stuff. They’ve been extremely helpful, and 

they were able to save us quite a bit of money 

compared to the firm we used previously,” 

says the client. “I’ve worked with them twice 

as sponsor’s counsel on two PPP projects and 

looking forward to hiring them again on the 

next one.” 


Michael Allen 

Erik Richer La Flèche 


Canada’s project finance market please visit 

the website at www.iflr1000.com 

Restructuring and insolvency 


Tier 1 

Goodmans 

Tier 2 

Bennett Jones 


McMillan 




Tier 3 





Gowling Lafleur Henderson 


ThorntonGroutFinnigan 

The restructuring of Canada’s ABCP (assetbacked 

commercial paper) market occupied 

much of the restructuring talent at law firms 

here throughout the last year. In January 

2009, the long-negotiated settlement between 

the concerned financial institutions and 

investors was finally enacted, prompting an 

2010 EDITION

Restructuring and insolvency | Canada 

145 

exchange of the original $32 billion in nonbank 

commercial paper for longer-term notes. 

Unlike the neighbouring US market, the 

ABCP matter was one of the few restructuring 

matters to take place in the financial sector. 

Instead, it has been the ailing forestry sector 

providing many of the marquee filings. Filings 

in 2008 for Tembec and Pope & Talbot have 

given way to filings by Ainsworth Lumber and 

Smurfit-Stone Container Corporation in the 

new year. 

Insulation from the write-downs suffered 

by financial institutions abroad hasn’t meant 

Canadian banks are any more willing to 

assume lending risks. In fact, the avoidance of 

losses like those seen in New York and 

London may have only made them more discerning. 

This has created a scenario where 

banks have to reconcile risk aversion with the 

uncertainties of recouping investments 

through foreclosure and subsequent liquidation. 

“Banks are becoming hesitant to put 

bullets into companies” says one restructuring 

partner. 

The scarcity of available financing has also 

impacted on filing options for debtors in 

Canada recently. A previous, if not typical, 

emphasis on CCAA (Companies’ Creditors 

Arrangement Act) proceedings has given way 

to a flurry of filings under the CBCA (Canada 

Business Corporations Act). Ainsworth 

Lumber and Tembec, two of the largest filings 

this year, followed the CBCA model, which 

supporters tout as an alternative to CCAA 

court costs and the restraints of courtappointed 

monitors. Disadvantages do exist, 

however, as CBCA does not provide restructuring 

protections for a company and the 

process largely favours entities restructuring 

debt holdings. 

One positive impact of the economic 

downturn may be the growing experience of 

courts across the Canadian provinces in handling 

restructuring and insolvency matters, 

levelling what had been an emphasis on filing 

in Toronto. “You just decide to file where it 

makes the most sense,” says one partner. The 

restructuring of multinational companies has 

also led courts in the US and Canada to conduct 

simultaneous restructuring proceedings, 

placing an emphasis on cross-border experience 

for Canadian law firms. Paper-maker 

Smurfit-Stone stands as the most recent example 

of this type of co-ordinated proceedings. 

Goodmans 

Goodmans sets the standard for restructuring 

and insolvency work in Canada. “They have 

the biggest and deepest insolvency practice in 

Canada,” says a peer. “They definitely deserve 

to be in a class by themselves.” 

Goodmans’ restructuring practice is the 

exception to its smaller physical presence as a 

firm. A stable of talent, led by Jay Carfagnini, 

has established the firm’s reputation for handling 

the most complex and urgent matters 

for both debtors and creditors. “They have a 

number of good senior lawyers, including Jay 

Carfagnini. They’re all first-rate lawyers,” says 

a competitor. Another remarks of Carfagnini: 

“The best kind of lateral big thinker and bigpicture 

lawyer is Jay Carfagnini at 

Goodmans.” 

The resolution of the $32 billion assetbacked 

commercial paper (ABCP) market 

restructuring stands as the foremost example 

of Goodmans’ abilities. Representing the 

financial institutions making up the Pan- 

Canadian Investors Committee, the firm 

negotiated what is the largest debt restructuring 

in Canadian history through the exchange 

of short-term paper for note holdings with 

longer maturities. 

But even with one of the larger roles in the 

ABCP matter, Goodmans was able to land 

representations in other high-profile cases 

throughout the year, such as AbitibiBowater 

and Ainsworth Lumber. Working for the 

bondholders committee of AbitibiBowater, 

Goodmans lawyers aided in the development 

and implementation of a $1.4 billion refinancing 

in the face of approaching debt maturities. 

Similarly, the noteholders of Ainsworth 

Lumber hired the firm in connection with the 

wood products company’s recapitalisation 

process. This reorganisation under the CBCA 

led to the issuance of $200 million in senior 

unsecured notes and an $824 million debt 

exchange. 


Jay Carfagnini 

Robert Chadwick 

Brendan O’Neill 

Joseph Pasquariello 

Bennett Jones 

Bennett Jones is renowned in the Canadian 

market for its representations of creditors and 

noteholders. Rick Orzy and Kevin Zych are 

recognised by peers as unquestioned leaders of 

the overall practice, present on files for 

Ainsworth Lumber, Nortel Networks, 

Quebecor World and Smurfit-Stone 

Container Corporation in the last year. But 

despite this flurry of recent activity, peers note 

an increasing number of conflicts of interest 

that have sent work to rival firms. 

In the CCAA proceedings for Quebecor 

World and Smurfit-Stone, Bennett Jones 

landed the roles of advising the committees of 

unsecured creditors for both companies. 

Filing for protection in January 2008, printer 

Quebecor World is attempting to restructure 

an estimated $3 billion in debt commitments. 

One year later, in January 2009, the paper 

maker Smurfit-Stone entered into simultaneous 

CCAA and Chapter 11 proceedings in 

Canada and the US with the hope of refinancing 

the company’s $4 billion in debt 

holdings. 

Noteholder work includes Bennett Jones’ 

advice to the cross-border noteholder group in 

the Nortel Networks bankruptcy. With an 

estimated $4.5 billion in outstanding debt, 

the telecom products manufacturer filed for 

Canadian and US bankruptcy protections in 

January 2009. 


Rick Orzy 

Kevin Zych 


Drawing from a highly-regarded banking 

practice, peers agree that Blakes has built one 

of the foremost DIP (debtor-in-possession) 

financing platforms in Canada. The ongoing 

CCAA proceedings of Pope & Talbot exemplify 

this, with Blakes advising Ableco Finance 

as the lender. Following Pope & Talbot’s 

inability to produce a plan of arrangement, 

Blakes has advised Ableco in securing its $250 

million investment from the lumber company 

through asset sales of land holdings and pulp 

and saw mills. Susan Grundy is recommended 

by peers for her influential presence on files 

such as Pope & Talbot and Smurfit-Stone 

Container Corporation. 

Retained by JPMorgan Securities in early 

2009, Blakes is advising the bank in its role as 

DIP lender for Smurfit-Stone. Following 

Smurfit-Stone’s CCAA and Chapter 11 filings 

in Canada and the US, Blakes helped establish 

a $750 million cross-border financing package 

of term and revolving credit facilities. Similar 

lending work is being done by the firm in the 

cross-border insolvency proceedings for 

Progressive Moulded Products. Blakes again 

represents JPMorgan Chase as administrative 

agent for a syndicate of lenders. 


Susan Grundy 

William Kaplan 

Steven Weisz 


Large debtor filings like Quebecor World and 

Nortel Networks have given the restructuring 

group at Ogilvy Renault a busy year. And the 

sudden rush of activity hasn’t gone unnoticed 

by peers. “Ogilvy is on a bit of a tear at the 

moment,” says one competitor. As leader of 


146 

Canada | Restructuring and insolvency 

Ogilvy’s restructuring group, Derrick Tay is 

well regarded by peers for his creative solutions 

as debtor-side counsel. Tay leads the 

firm’s response for Quebecor World, recently 

securing court and creditor approval for the 

company’s cross-border restructuring. The 

recent filing of Nortel Networks in the US, 

Canada, and the UK has also brought Ogilvy 

on board to handle the restructuring of a 

long-time client. 

Throughout the nearly two-year restructuring 

of the asset-backed commercial paper 

(ABCP) market, Ogilvy advised Caisse de 

Dépôt et Placement du Québec. The Quebec 

pension-plan manager proved to be one of the 

most influential investors groups throughout 

the restructuring, holding an estimated $13.2 

billion of the overall $32 billion in the shortterm 

paper market. 


Louis Gouin 

Orestes Pasparakis 

Tony Reyes 

Derrick Tay 


A solid foundation of complementary practices 

in capital markets, banking and M&A 

allows Osler’s restructuring practice to offer 

broad expertise. Practitioners at rival firms 

single out Edward Sellers of Osler’s Toronto 

office as the firm’s restructuring group leader. 

“Sellers at Osler is a very solid corporate-type 

insolvency lawyer,” says one partner. “Sellers 

kind of quarterbacks the Osler team,” comments 

another. Also from the Toronto office, 

Marc Wasserman is recommended by peers 

owing to his role in files like InterTan, the 

Canadian subsidiary of electronics retailer 

Circuit City. 

Sellers and Wasserman acted for 

Brookfield Bridge Lending Fund in connection 

with its creditor status to Maax Canada. 

The two were able to negotiate amendments 

to existing credit facilities throughout the 

bathroom supply manufacturer’s CCAA proceedings 

as well as the establishment of new 

credit facilities worth approximately $250 

million. Other creditor work included the 

firm’s representation of BlackRock’s involvement 

in the asset-backed commercial paper 

restructuring. The investment management 

company was assigned the role of administrator 

for 20 short-term paper conduits involved 

in the workout. 

Since January 2009, Osler has also advised 

the board of directors for Nortel Networks in 

the telecoms manufacturer’s ongoing insolvency 

proceedings. 


Edward Sellers 

Marc Wasserman 


Stikeman Elliott’s restructuring and insolvency 

work with foreign creditors and multijurisdictional 

debtors has given the firm a reputation 

as a cross-border adviser. “I always 

thought of Stikeman as litigators who do 

insolvency work,” says one competitor, “but 

they do phenomenal insolvency work.” 

Another partner points out the talents of Sean 

Dunphy in the firm’s Toronto office: 

“Dunphy is their leading lawyer there and 

very good.” Clients of the firm praise its quality 

of personnel. “They are undeniably fantastic. 

I think the level of competency and quality 

of people they have there is always top 

notch,” remarks one client. 

As was the case for most of the top 

Canadian firms, Stikeman advised in the 

restructuring of the $32 billion asset-backed 

commercial paper (ABCP) market. Sean 

Dunphy and Peter Howard counselled a 

group of asset providers in Bank of America, 

Barclays, Deutsche Bank, HSBC, Merrill 

Lynch, Swiss Re and UBS through the closing 

of negotiations in February 2009. Stikeman is 

also advising Bank of America in its role as 

administrative agent for creditors of the crossborder 

insolvency proceedings of SemCanada 

Crude. 

Recently, the firm scored a significant 

debtor file in the representation of the 

Smurfit-Stone Container Corporation. 

Serving as Canadian counsel, Sean Dunphy 

helped negotiate the recent $750 million 

debtor-in-possession financing for the paper 

maker. 


David Byers 

Sean Dunphy 

Jean Fontaine 


Canada’s restructuring and insolvency market 

please visit the website at www.iflr1000.com 


2010 EDITION

Canada - IFLR1000

Create successful ePaper yourself

Delete template?

Save as template?