Resolution in writing of the board of directors of Widget Corporation (the "Corporation") dated this 1st day of June, 2012.
The Corporation is a corporation organized and operating under the laws of Canada.
The directors have determined that it is in the best interest of the Corporation to appoint an officer for the Corporation.
The directors have determined that it is in the best interest of the Corporation to sell the intellectual property associated with the Widget product.
IT WAS RESOLVED THAT:
1. Art Cockfield will be appointed as Treasurer of the Corporation as of August 1, 2012; and
2. the Corporation will sell the intellectual property associated with its Widget product to Mega-Corp. for CAD$1,000,000.00.
_______________ Signed in Kingston, Ontario on _____, 2012
RESOLUTION IN WRITING of all voting shareholders (the “Shareholders”) of Widget Corporation (the “Corporation”) dated June 1, 2012.
BACKGROUND: A. The Corporation is a corporation organized and operating under the laws of Canada.
B. The Shareholders desire to make a resolution.
C. The Shareholders desire to sell almost all of the assets of the Corporation.
IT WAS RESOLVED THAT:
A. the Corporation will sell the intellectual property associated with the Corporation’s Widget product to Mega-Corp. for CAD$1,000,000.00.
_____________ Signed in Kingston, Ontario on _____, 2012
1. What is the minimum amount of notice of a shareholders’ meeting that must be given to each shareholder entitled to vote?
2. What are the three methods of voting that are permissible under the CBCA? (hint: one method is by hand)
3. If a shareholder wants to change the way a corporation is run then he or she can have a proposal circulated in management materials that discuss the upcoming shareholders’ meeting. What percentage of voting shares are needed before a shareholder can require management to circulate a shareholder proposal? What is the minimum amount of time these shares need to be held?
4. For so-called constitutional amendments, how can shareholders amend the articles of incorporation?
5. If directors are normally vested with the power to manage, why do we permit shareholders to vote on certain management decisions such as the sale of all or almost all of a corporation’s assets?
Chapter 5 The Final Exam
With his right shoe poised, Tate snarled as he prepared to drive Henry’s nose bone into his skull.
Instead, his chest exploded in pain.
As Tate stumbled back, he looked down at the pearl-white dagger hilt buried in the center of his chest; the hilt glinted under the harsh ceiling lights. He’d been so focused on getting to Henry that he hadn’t bothered to pay attention to Molly. When she saw he was distracted she’d reached into her right boot to access her favorite butterfly-knife. After she had thrown the dagger it went through two perfect rotations before striking its target. Tate’s eyes focused on the hilt protruding from his ribcage, then looked out to meet Molly’s gaze.
“I always liked you, Professor Tate,” she said from her seat. “But if it comes down to a choice between you and him, it’s going to be him. You lose. Oh, and it was probably not a good idea to leave my arms unfrozen.”
As he fell backwards sucking for air, Tate kept his eyes fixed on Molly until they rolled back. Molly could only watch as Tate slumped and fell back, his body landing with a wet thud.
The world returned. Color flooded back everywhere.
Molly blinked against the onslaught of colors and rose from her chair, hoping to find context. She was back in the classroom. She looked down to see the hilt of her butter-fly knife partly-hidden in the shadow of the brim of her leather boots. She whirled and saw James’ body slumped between the desks where it had fallen, his mohawk returned to its purple sheen. Eighteen more students were spread throughout the room, their open eyes seeming to still study the problems that floated above their screens.
The four remaining students, like Molly, were staring in shock at the slaughter.
Still lying on the floor, Henry felt the side of his face and found he was no longer injured; he sprang up and raced to the second row of desks to reach out to put his fingers over the neck of a student in a red turtleneck who lay face down on her desk. “Sandy, no! No pulse. She’s gone.”
Now the four students were all on their feet, dashing around the classroom as they checked pulses. T-Bird lay hulking over his desk, his arms hung over the end of the desktop with knuckles touching the brown parquet floor. None of the others had survived.
“All ... dead,” Henry said to himself then bounded back to the front of the class, shooting past the podium.
Henry stopped dead in his tracks. The real Professor Tate lay on the floor next to the lectern, his old brown sports coat splayed out beneath him, his bow tie askew. The Professor’s dead eyes were open, the right eyebrow arched in surprise. His right hand seemed to clutch his chest where the knife had struck him in the VR world. As if the shock to his enhanced mind was so great it registered in the real world in his last dying moments.
Above his lectern Henry could make out the text for Tate’s final review lecture that had scrolled to its end point:
‘In the later part of the 19th Century, English courts began to emphasize the need for equitable relief for minority shareholders and others. The courts struggled with the question: why care about minority shareholders at all? After all, the minority shareholders invested in a company knowing they did not have the power to run the show. Still, the courts worried that a complete disregard for minority shareholder interests could make some investors reluctant to invest their monies unless they enjoyed a majority shareholding.
So it is now accepted—although not uncritically—that minority shareholders should enjoy at least the right to be treated fairly by the majority. This view ultimately came to be adopted into the Canada Business Corporation Act’s statutory regime as a kind of minority shareholder bill of rights (e.g., the derivative action under section 239 and the oppression remedy under section 241). Continuing our earlier analogy, these rights are skin to granting access rights to a non-custodial parent; this parent, like a minority shareholder, may not have ‘control’ over the baby, but they should still enjoy some rights such as access to pursue the best interests of the baby/corporation.’
The final words were in hot-pink font and raised above the other letters: ‘Remember it is a basic principle of justice to prohibit discrimination against people based on any genetic predisposition. So too do minority shareholders require protection from the scum-sucking majority who would unfairly take away their freedoms. The normals must pay. Pay with their lives.’
Henry was puzzling over this last bit when Molly came up slowly behind him to regard Tate’s fallen form.
She pointed toward the wall where a small white orb lay; it was the Ultimate Gamer. Henry walked over to it. “It must’ve fallen out of my hand and rolled there after I entered the VR world,” he said.
Henry stooped and picked up the Ultimate Gamer then turned it in his hands as he examined it carefully. No lights. No humming. Henry looked over at Molly. She shrugged. He raised the Ultimate Gamer in his right hand then smashed it against the wall; it cracked apart, raining bits of plastic and electronic components onto the parquet floor.
She nodded. “By the way, right before Tate attacked you I was humming to interfere with Tate’s telepathic abilities. I read it messes with their ability to read your mind. And I didn’t want him to know about my knife.”
Molly stared at Tate’s fallen form. “For awhile I… I didn’t think it was real…you know… that we would be dead in the real world.”
“I know,” Henry replied.
“He was going to kill you and… and you were so kind and I thought that if there was even a chance… like you said… even a chance that he might actually kill you, I wasn’t going to let that happen.”
“And I wasn’t going to let anything happen to you, either. Or at least I tried.”
“This is so screwed up,” she said. For a moment it looked like she was fighting tears.
“Pretty bad, yeah,” he said. “But you saved us. You saved me. Thank you.” Henry looked out at the other students who were huddled talking quietly in a group.
Molly cleared her voice and swept back a long black lock of hair that had fallen over her eyes. “You’re welcome.”
“I…” Henry continued. “I don’t know what happened between us back in the VR world. I mean things were obviously completely out of whack. I, um…” Henry fumbled, and scratched the right side of his skin-tight body suit.
“What are you trying to say?”
“Well, I won’t hold you to it. To what you said to me.”
Turning from the death around them, she leaned into him until their foreheads touched. She bore his awkwardness for several seconds, then sighed.
“Now would be a really good time to kiss me,” she said.
Problems 1. Who is entitled to bring an application for a remedy for a derivative action or an oppression remedy?
2. What is the distinction between a personal action and a derivative action?
3. If a board of directors makes a decision in good faith can a complainant still argue that they have been ‘oppressed’ by this decision?
4. In circumstances where the interests of stakeholders conflict, can a board of directors privilege the interests of one group at the expense of another without running afoul of the oppression remedy?
5. In the BCE decision, the Supreme Court of Canada developed a two stage test to determine whether a party has been oppressed: first, determine the reasonable expectations of the parties and whether these expectations were disappointed; and two, determine whether reasonable expectations have been actionably violated. What is the difference between a disappointment of reasonable expectations and a legal violation of these expectations that would call for an oppression remedy?