Trapeze Asset Management Inc. et al. – s. 144

Headnote

Section 144 -- Application for partial revocation of cease trade order -- Variation of cease trade order to permit certain trades for the purpose of selling securities for a nominal amount solely to establish a tax loss -- The securities were acquired prior to the date of the cease trade order -- Purchaser of the securities will be a sophisticated purchaser who understand that such shares have no market value, the purpose of the proposed trades and the nature of the cease trade order -- Each of the Applicants and the purchaser are not aware of any material information that has not been generally disclosed -- Partial revocation granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127, 144.

IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED
(the “Act”)

AND

IN THE MATTER OF
TRAPEZE ASSET MANAGEMENT INC. AND TRAPEZE CAPITAL CORP.
AND ACCOUNTHOLDERS LISTED IN SCHEDULE “A” AND CANORO RESOURCES LTD.

ORDER
(Section 144 of the Act)

WHEREAS on August 23, 2011, a Director of the Ontario Securities Commission (the "Commission") made an order under paragraph 2 of subsection 127(1) of the Act that all trading in and all acquisitions of securities of Canoro Resources Ltd. ("Canoro"), whether direct or indirect, shall cease until further order by the Director (the "Canoro CTO");

AND WHEREAS Trapeze Asset Management ("TAMI"), Trapeze Capital Corp. ("TCC") and certain accountholders listed in Schedule A (the "Accountholders") (together with TAMI and TCC, the "Applicants") have made an application pursuant to section 144 of the Act (the "Application") for a partial revocation of the Canoro CTO to permit the sale by the Applicants of the Canoro Shares (as defined below) solely for the purpose of establishing a tax loss;

AND WHEREAS National Policy 12-202 Revocation of a Compliance-related Cease Trade Order provides that the Commission will generally grant a partial revocation order to permit a securityholder to sell securities for a nominal amount solely to establish a tax loss;

AND UPON the Applicants having represented to the Commission that:

1. Canoro is a reporting issuer in Ontario, British Columbia, Alberta, Saskatchewan and Manitoba.

2. TAMI is an Ontario corporation and is registered as a portfolio manager, exempt market dealer and investment fund manager under the Act.

3. TCC is an Ontario corporation and is registered as an investment dealer under the Act.

4. The Accountholders are resident in Ontario.

5. TAMI holds 9,542,813 common shares of Canoro on behalf of managed accounts and TCC holds 4,270,699 common shares of Canoro on behalf of managed accounts.

6. The Accountholders hold 479,100 common shares of Canoro (collectively the 14,292,612 common shares held by TAMI, TCC and the Accountholders are herein referred to as the "Canoro Shares").

7. The Canoro CTO was made by the Commission because Canoro failed to file the following continuous disclosure materials as required by Ontario securities law:

(a) audited annual financial statements for the year ended March 31, 2011;

(b) management's discussion and analysis relating to the audited annual financial statements for the year ended March 31, 2011;

(c) certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings;

8. The Canoro Shares were acquired prior to the date of the Canoro CTO.

9. The Applicants will effect the proposed trades of the Canoro Shares (the "Canoro Disposition") solely for the purpose of enabling them to establish a tax loss in respect of such Canoro Disposition.

10. It is intended that the Canoro Shares will be sold at a price of $0.00001 per share for aggregate proceeds of $142.93, solely for the purpose of establishing tax losses.

11. The purchaser of the Canoro Shares will be resident in Ontario and will be a sophisticated purchaser who understands that such shares have no market value, the purpose of the proposed trades and the nature of the Canoro CTO.

12. Each of the Applicants has acknowledged that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

13. Each of the Applicants and the purchaser are not aware of any material information concerning the affairs of Canoro that has not been generally disclosed.

14. The purchaser will purchase and hold the Canoro Shares, as principal.

15. The purchaser of the Canoro Shares will be provided with a copy of the Canoro CTO and a copy of this Order prior to the Canoro Disposition.

AND WHEREAS considering the Application and the recommendation of the staff of the Commission;

AND WHEREAS the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 144 of the Act, that the Canoro CTO be partially revoked solely to permit the Canoro Disposition provided that:

1. Prior to the completion of the Canoro Disposition, the purchaser of the Canoro Shares will:

(a) receive:

(i) a copy of the Canoro CTO; and

(ii) a copy of this Order;

(b) provide the Applicants with signed and dated acknowledgements which clearly state that the Canoro CTO remains in effect, and that the issuance of a partial revocation of a cease trade order does not guarantee the issuance of a full revocation in the future; and

2. The Applicants undertake to make available copies of the written acknowledgements referred to in paragraph 1(b) to staff of the Commission upon request.

DATED in Toronto this 12th day of December, 2013.

"Shannon O'Hearn"

Manager, Corporate Finance

Ontario Securities Commission

 

SCHEDULE A

ACCOUNTHOLDERS

1051937 Ontario Ltd.

Samarth Tosaria

Thelma and Saul Shulman

David Moscovitz