BJ Services Company Canada, the successor to Nowsco Well Service Ltd. v. The Queen, 2004 DTC 2032, 2003 TCC 900 (TCC) -- summary under Legal and other Professional Fees

After receiving an unsolicited hostile bid from another public company (BJ"), the taxpayer retained legal and accounting advisers (whose fees were admitted to be deductible) and financial advisers, and after it secured a higher bid from another public company ("GLCC"), the first bidder responded with a higher bid, which was accepted, with the result that ultimately all the shares of the taxpayer were acquired by BJ, which merged with it. In finding that the financial advisory fees, together with fees payable by the taxpayer to GLCC (including a "break" fee) were deductible, Campbell J. noted (at p. 2041) that these expenses "not only satisfied a need of the company but were necessitated in dealing with the practicalities of a takeover bid environment", that "it is a basic common sense approach to view maximizing share price as inexplicably interwoven with the business of any company, whether that be public or otherwise" (p. 2042) and that "given the circumstances, the expenses were part of the general overall costs, a corporation must incur to earn income, even though these expenses have no direct link to revenue generating activities but are related to shareholder interests"(p. 2043).