Background
Aco to Eco are corporations held by unrelated individuals (A to E) or their families or family trusts. They wish to separate their economic interests in the shares of Tco, a public corporation traded on the stock exchange. Xco (discussed in 2022-0958601R3), whose shares are held by Aco and Kco (a predecessor of KL Amalco) and unrelated shareholders and which is an investment company will have no change to its ownership by those shareholders or their successors by amalgamation except by virtue of the 3rd butterfly below.
Proposed transactions
Aco and Bco first will effect estate freezes.
Butterfly 1
DC2, whose shares (being three different classes of common shares) are held by Aco, Bco and Cco, and KL Amalco, whose shares (being two different classes of common shares) are held by Dco and Eco, will effect a butterfly split-up of DC1 Amalco (whose assets include Tco shares) between their respective TCs (TC1 and TC2) formed by DC2 and KL Amalco.
Amalgamation 3
DC2 and TC1 will amalgamate to form DC2 Amalco.
Butterfly 2
Bco and Cco, will effect a butterfly partial split-up of DC2 Amalco involving transfers of their shareholdings of DC2 Amalco (but not those of Aco) to their respective TCs (TC3 and TC4) formed by Bco and Cco, pro rata spin-offs of DC2 Amalco net assets to those two TCs, and share cross-cancellations.
Amalgamation 4
KL Amalco and TC2 will amalgamate to form DC3 Amalco.
Butterfly 3
There will be a pro rata butterfly transfer of the assets of DC3 Amalco to the TC (TC5) of Eco, a pro rata spin-offs of KL Amalco net assets to TC5, and share cross-cancellations.
Amalgamation 5-9
Aco and DC2 Amalco will amalgamate to form Aco Amalco, Bco and TC3 will amalgamate to form Bco Amalco, Cco and TC4 will amalgamate to form Cco Amalco, Dco and DC3 Amalco will amalgamate to form Dco Amalco and Eco and TC5 will amalgamate to form Eco Amalco.
Rulings
Including re exception in s. 55(3)(b) and non-application of s. 55(3.1).