Securities Law & Instruments


National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- The securities of the issuer are beneficially owned by more than 50 persons and are not traded through any exchange or market -- The issuer is in the process of winding up; the issuer has distributed almost all of its assets to shareholders; the issuer has ceased all commercial activity and will be dissolved after the liquidation process is complete; shareholders voted to approve the liquidation plan and were notified of the issuer's intention to file an application to cease to report; the issuer has undertaken to provide shareholders with alternative disclosure and to notify the securities regulator if they commence an active business and no longer intend to dissolve.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10).

October 4, 2019




¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).

Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):

(a) the British Columbia Securities Commission is the principal regulator for this application;

(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, Manitoba, Newfoundland and Labrador, New Brunswick, the Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon; and

(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.


¶ 2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.


¶ 3 This order is based on the following facts represented by the Filer:

1. the Filer was incorporated under the Canada Business Corporations Act (CBCA);

2. the Filer's head office is located in Vancouver, British Columbia;

3. the Filer currently has 11,649,711 issued and outstanding class A shares (Shares); the Shares are the only outstanding securities of the Filer;

4. the Filer has one registered shareholder and approximately 1,511 beneficial shareholders; of the Canadian beneficial shareholders, 861 are from Ontario, 305 are from British Columbia, 183 are from Alberta, 75 are from Québec, 22 are from Manitoba, 16 are from New Brunswick, 13 are from Nova Scotia, 11 are from Saskatchewan and 1 is from Prince Edward Island; of the remaining beneficial shareholders, 15 are from the United States and 9 are from other countries;

5. the Filer is a reporting issuer in each of the jurisdictions of Canada;

6. at an annual and special meeting of shareholders of the Filer held on June 16, 2016, holders of 99.92% of the Shares represented at the meeting voted in favour of a special resolution to do the following under subsection 210(3) of the CBCA:

(a) implement an orderly wind-up plan;

(b) discharge all liabilities;

(c) distribute any remaining property to the shareholders; and

(d) send articles of dissolution to the Director appointed under the CBCA;

7. on July 17, 2019, the Filer issued a press release disclosing that it intends to apply to cease to be a reporting issuer;

8. prior to the commencement of the orderly wind-up of the Filer (the Orderly Wind-Up), the Filer had total investments in mortgages of approximately $165.2 million comprised of 31 mortgages;

9. under the Orderly Wind-Up, all such mortgages have been successfully repaid or divested;

10. since the commencement of the Orderly Wind-Up: (i) the Filer has returned capital to holders of Shares totalling $109.1 million through regular and special distributions; and (ii) the Filer has purchased 7,236,095 of its Shares for total consideration of approximately $58.3 million through normal course issuer bids and substantial issuer bids;

11. effective at the close of trading on July 31, 2019, the Shares were delisted from trading on the Toronto Stock Exchange;

12. the Filer currently has no active business or commercial operations; the remaining activities of the Filer involve solely the oversight of ongoing litigation and the maintenance of the corporation pending release and discharge of all liabilities, contingent or actual;

13. the Filer will satisfy all of its liabilities and distribute all of its assets, and intends to dissolve in accordance with the provisions of the CBCA, as approved by the shareholders; upon release and satisfaction of all liabilities (including contingent liabilities), the Filer intends to make a final distribution of all remaining funds to its shareholders, and may make one or more interim distributions to its shareholders prior to the final distribution;

14. the expected time frame to obtain the release or discharge of the liabilities of the Filer is expected to be approximately three to four years;

15. the Filer has no intention to seek public financing by way of offering of securities;

16. the Filer must secure a tax clearance certificate from the Canada Revenue Agency before it can dissolve;

17. all issued and outstanding securities of the Filer will be cancelled upon the dissolution of the Filer;

18. the Filer has undertaken that:

(a) it will, as soon as practicable following receipt of the Order Sought, issue a news release advising shareholders:

(i) that it has ceased to be a reporting issuer; and

(ii) the anticipated timing of its dissolution and final distribution to shareholders;

(b) if it has not dissolved on or before December 31, 2019, it will, on or about that date, issue a news release regarding the status of its liquidation, cash on hand and proceeds, if any, from ongoing litigation and the anticipated timing of its dissolution;

(c) if it has not dissolved by March 31, 2020, it will, on or about that date and thereafter on a quarterly basis until it dissolves, issue a news release on the status of its liquidation, cash on hand and proceeds, if any, from ongoing litigation and the anticipated timing of its dissolution;

(d) it will immediately notify the securities regulator of each of the Jurisdictions if at any time before its dissolution:

(i) it proposes to commence an active business or any commercial operations;

(ii) it proposes to undertake a public or private offering of securities in any jurisdiction; or

(iii) it no longer intends to dissolve; and

(e) as soon as practicable after the time of dissolution, it will issue a news release confirming the dissolution;

19. the Filer intends to maintain its website pending dissolution and will post its press releases on its website;

20. the Filer will continue to provide audited annual financial statements to shareholders until its dissolution in accordance with the CBCA;

21. the Filer is not in default of securities legislation in any jurisdiction;

22. no securities of the Filer, including debt securities, are traded in Canada or another country on a "marketplace" as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;

23. the Filer is not eligible to use the simplified procedure in National Policy 11-206 Process for Cease to be a Reporting Issuer Applications as it has more than 50 securityholders;

24. the Filer is applying for the Order Sought from the securities regulatory authority or regulator in each of the jurisdictions of Canada in which it is a reporting issuer; and

25. the Filer, upon the grant of the Order Sought, will no longer be a reporting issuer in any jurisdiction of Canada.


¶ 4 Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.

The decision of the Decision Makers under the Legislation is that the Order Sought is granted.

"John Hinze"
Director, Corporate Finance
British Columbia Securities Commission