Friday, June 20, 2008

Supreme Court to rule today in case of Dumbing Down versus Business Ingenuity

By: Brent Fullard
Catalyst Asset Management Inc.

BCE's oppressed bondholders argued before the Supreme Court that they were seeking “business ingenuity” from the Board of BCE. All they got instead from BCE’s board was an exercise in “dumbing down”, that seemed to capture the fancy of at least one Supreme Court justice

The Supreme Court will render a decision today on whether dumbing down trumps business ingenuity in Canada. Why am I not optimistic, as this is Canada after all?

Unfortunately, the bondholders had little business ingenuity of their own to offer up that didn’t sound like an exercise in a zero sum game. Not mentioning the Catalyst Proposal puts them in the same camp as BCE, who failed to disclose this “elegant” solution to their ostensible goal of maximizing shareholder value. Would the fact that the Catalyst Proposal not have accelerated unvested employee stock options or resulted in the granting of a free carried interest to management of a privatized BCE have had anything to do with this non-disclosure sleight of hand?

As BCE ruling nears, stakes have never been higher

From Friday's Globe and Mail

June 20, 2008 at 4:10 AM EDT

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