Published October 28, 2021
This high-stakes, multifaceted case involved several issues, including novel ones like the use of swaps in a takeover bid.
The case addressed Brookfield's use of total return swaps in its takeover bid of our client, Inter Pipeline Ltd (IPL). Brookfield challenged some of IPL's defensive tactics, including a break fee negotiated between IPL and Pembina and a second-generation shareholder rights plan.
Our team used technical and legal expertise to advise IPL on this urgent, critical case. Work included:
The Alberta Securities Commission ruled in IPL's favour. The Commission dismissed Brookfield's application and found that its use of and disclosure relating to the total return swaps was abusive to IPL shareholders and the capital market and, therefore, contrary to the public interest. This is the:
The case decision sets a precedent for securities and corporate law in Canada. It also provides important guidance on what tools are available to Boards in responding to a hostile bid.
This case was named as one of Lexpert's Top 10 Business Decisions in 2021/2022.