Press Release of The Ad Hoc Committee of 1976/1996 Bell Canada Debentureholders Toronto, March 17, 2008

    TORONTO, March 17 /CNW/ - The Ad Hoc Committee of the 1976 and 1996 Bell
Canada debentureholders (the "Committee") announced today that it has lodged
appeals against the judgments rendered on March 7, 2008 by the Honourable Mr.
Justice Silcoff, of the Quebec Superior Court of Justice, which granted
permission for the proposed leverage buyout of BCE Inc. by a consortium led by
the Ontario Teachers' Pension Plan Board ("Teachers") and dismissed the
bondholders' proceedings contesting the Plan of Arrangement, seeking
enforcement of their contractual protections and for oppression remedies.
Inscriptions in appeal were filed today with the Quebec Court of Appeal in
    "The legal teams have studied the judgments carefully and believe that
there are strong grounds of appeal on both legal and factual issues," said
John Finnigan of the Toronto law firm ThorntonGroutFinnigan LLP, one of the
lawyers representing the Committee.
    A key legal determination in the judgments was the finding that corporate
directors have a fiduciary duty to maximize shareholder value when a company
is "put in play". Mr. Justice Silcoff adopted and applied an American case on
director's obligations in reaching this conclusion. The Committee believes
that this finding is at odds with the decision of the Supreme Court of Canada
in the 2004 case of Peoples Department Stores Inc. (Trustee of) v. Wise in
which it was held that corporate directors owe their obligations to the
corporation, not just the shareholders, and that the directors' fiduciary
obligations never shift to the shareholders. The Supreme Court of Canada held
that the Canadian legal landscape with respect to stakeholder interests is
unique. "We believe, with all due respect to Mr. Justice Silcoff, that his
finding on this point is not consistent with the binding authority of the
Supreme Court of Canada in the Peoples case and that it is not appropriate for
a Canadian court to adopt U.S. law in these circumstances," said Finnigan.
    A key fact in support of the debentureholders' position is that the board
of directors of Bell Canada never met to consider whether Bell's assumption of
responsibility to repay the $34 billion in acquisition debt was in the best
interests of Bell Canada. The Committee believes that the assumption of
$34 billion in debt for no consideration to Bell is manifestly not in the best
interests of Bell. As a result of the agreement by Bell to assume
responsibility for repayment of the $34 billion acquisition debt, the credit
ratings on Bell bonds fell from investment grade to junk status and the value
of Bell Canada bonds fell between 19 and 23 percent.
    Another principal position of the Committee is that Mr. Justice Silcoff
incorrectly ruled that a contractual provision that protects debentureholders
against a reorganization of Bell Canada when prejudicial to their interests,
is not triggered by the LBO transaction. "We disagree with Mr. Justice
Silcoff's interpretation of the relevant contractual language. We believe that
the Court has interpreted the trust indenture so as to give the word
"reorganization" no meaning. By permitting BCE and Bell to circumvent such
contractual protection, the ruling encourages parties to attempt to do
indirectly what they are not permitted to do directly. We want to raise this
legal interpretation issue with the Court of Appeal in order to obtain a
ruling that grants the debentureholders the protection they bargained for,"
said Mark Meland of Fishman, Flanz, Meland, Pacquin LLP in Montreal, another
member of the Committee's legal team.
    While Committee members were disappointed with the outcome of the
judgments, they believe that they have good grounds for relief and are
determined to pursue their appeal rights to obtain a favourable ruling on
their claims.
    The Committee is composed of a "blue chip" roster of life insurance
companies and investment managers in the North American marketplace.

For further information:

For further information: John L. Finnigan, (416) 304-0558, Email:; John Porter, (416) 304-0778, Email:; Mark
Meland, (514) 932-4100, Ext. 213, Email:; Avram Fishman (514)
932-4100, Ext. 215, Email:

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