Parent, a listed corporation with a specified shareholder (and perhaps with two classes of multiple voting and single voting shares), wishes to spin off one of its subsidiaries, whose shares are held, in part, through a subsidiary of Parent (Sub1) and partly by Parent directly. CRA provided butterfly and other ruling on two successive spin-off butterflies pursuant to which Sub1 spins-off its shares of the subsidiary to Parent, then Parent drops all of its shares of the subsidiary into a Newco which then is spun-off to its shareholders.
In addition:
- S. 85.1 applies to the component of the second spin-off pursuant to which the Parent shareholders exchange special shares of Parent received by them under a s. 86 reorg to Newco in exchange for Newco shares (unless they choose to jointly elect with Newco under s. 85(1)).