2126 - You wrote this a while ago. I'm hoping for some clarification.
Further update on Dissent Rights under Yukon Law:
As I noted earlier: To dissent you must :
1) be a registered shareholder on record date set by the BOD for the Exxon Bid (expected early August) [Check with your broker to be certain that you shares are 'registered' and not held 'beneficially'.
2) not vote yes on bid
3) notify IOC of your dissent formally and in writing to a specific address in Yukon at least 2 days before Special Meeting/Vote on Exxon bid (address will be in the MIC and Notice of Meeting)
Under Section 193 of the Yukon Business Corporation Act, the law provides that:
If a shareholder complies with the above requirements:
1) A dissenting shareholder may make application to the Yukon Supreme Court to "set a fair value...of the shares of the shareholder who dissents."
2) Once such an application is made, the corporation (IOC) must [unless the Yukon Court orders otherwise] send to each dissenting shareholder a written offer to pay an amount considered by the directors to be a fair value. This written offer must be made by the corporation within 10 after notice is served on the corporation of the dissenting shareholder application for fair value.
3) Every corporate offer must be:
- Made on the same terms to every dissenting shareholder
- contain a statement showing how such 'fair value' was determined
4) Each dissenting shareholder may accept or refuse any offer by the corporation up until the date when/if the Court sets the 'fair value'
5) Any dissenting shareholder is NOT required to give security for any court costs,
6) And "except in special circumstances" dissenting shareholders "shall not be required to pay the costs of the application or appraisal".
Not be required to pay cost of appraisal?
ONCE an application is made, the Court may do any/all of the following:
1. Join together all dissenting parties, who, in the opinion of the Court, are in need of representation.
2. Conduct a trial on the issues, including discovery, and the setting of "burden of proof"
3. Direct payment by the corporation to the shareholders of the amount offered by the corporation as "fair value"
4. Handle the deposit of shares and any service of process
5. Direct the appointment and payment of independent appraisers and the appraisal procedures.
Who is paying the independent appraiser here.?
6. If matters get this far, the Court SHALL a) set the "fair value" of shares and b) give judgement against the corporation for that amount, and c) set a time for payment to shareholders.
7. Up until a) the Exxon bid becomes effective (shortly after a 2/3 majority "yes" vote by shareholders) or b) a dissenting shareholder accepts an amount as "fair vlue" from the corporation, any dissenting shareholder may withdraw its dissent OR the corporation may withdraw its resolution to sell the company.
8. Finally, and importantly, the corporation need not pay the dissenting shareholder the 'fair value' if there are 'reasonable grounds' for believing that the "corporation is or would be after payment, unable to pay its liabilities as they become due."
This sounds to me like a viable out clause for Hession and his wrecking crew depending on how many dissent shares there are.
Dissenting shareholders are given a large measure of protection under Yukon law, except by a corporation that is or would be insolvent by the time payment to dissenting shareholders is due. [Soulds a little too familiar to me].
This is going to be a very very tough decision to make regarding the Exxon bid, and, potentially, a long process.. I hope that Phil decides to let shareholders know his plans regarding dissent.
************************
Assuming this is correct, a simple NO vote, if the deal is approved by YES votes, joins in the approval of the deal and that is the end of it. Only a NO-DISSENTING vote along with proper notifications to the appropriate parties provides for a new evaluation of value of IOC and ONLY for those that voted NO-DISSENTING.
Yes, there are 5 possible things that shareholders can do:
1. Not vote at all [abstain] If the vote is in favor of the Bid, they join in the proceeds. If the vote fails, they remain shareholders of IOC
2. Vote YES (This cancels the shareholder's right to dissent) If the vote is in favor of the bid, they join in the proceeds. If the vote fails they remain shareholders of IOC.
3. Vote NO (This leaves open the shareholder's right to dissent) If the vote is in favor of the bid, they join in the proceeds. If the vote fails they remain shareholders of IOC.
4. Vote to Dissent [and follow all of the required procedures under Yukon law] but also vote NO. This provides that the shareholder will ONLY receive either an a) settlement offer from IOC that they CAN accept or b) a court-ordered appraisal that they MUST accept. [They can withdraw their Dissent at any time prior to the vote on the deal. If the vote is approved, and they have not withdrawn their dissent, they may only receive either the "fair value" settlement offer by IOC, or the court-ordered appraisal value if they refuse to accept the IOC settlement offer. They will NOT join in the proceeds of the Exxon deal bid, under any circumstances. If the NO votes prevail, dissenting shareholders retain their rights as IOC shareholders].
5. Vote to Dissent [and also follow all of the required procedures under Yukon Law], but abstain from any additional vote. [This is a possible action, but I really don't see any reason that anyone would take this route]. They are still 'dissenting shareholders' entited to either a) a settlement offer or b) a court-ordered appraisal value for their shares.[They can withdraw their dissent at any time prior to the vote on the deal. If the vote is approved, and they have not withdrawn their dissent, they may only receive the "fair value" settlement offer from IOC or the court-ordered appraisal value if they have refused the IOC settlement offer(s). They will not under any circumstances, join in the proceeds of the Exxon deal. If the NO votes prevail, dissenting shareholders retain their rights as shareholders].
This is my reading of Yukon law on these points, but everyone [including me particularly] is fallible. I hope this clarifies the possible actions of shareholders.You need to read this very carefully and if you decide to dissent, you need to have competent legal advice. Trust me on this point, a decision to "Dissent" is a much much bigger decision than a "No" vote. If IOC fails to make any dissent offer of fair value above the Exxon bid, it will become very expensive and very lengthy court appraisal litigation. One bright spot is that, as far as I can determine in my research, I've not found a CVR in any 'dissenting rights settlement', but again, my research is not perfect, obviously. Thus, a 'fair value' settlement offer by IOC, to my knowledge, must be for cash or possibly shares of Exxon (if Exxon agrees), and not contain a CVR. And, again, IOC must make their first 'fair value' offer relatively soon if there are dissenting shareholders that follow all of the court procedures in a letter-perfect fashion.
Assuming there will be multiple shareholders dissenting, what would dissenting look like for a po' folk (it's a long story, guys) dissenter without an attorney? I can't get the word "free-loader" out of my mind. Probably for good reason.