Proxy Litigation in Canada

Mark Gelowitz

December 2013

Sandra Rubin


Sinking share prices are leading shareholders on both sides of the border to launch proxy battles. But these days, in Canada, it is quite likely to be a US shareholder in the thick of action, challenging the establishment on a range of issues from board shake-ups to the right to requisition shareholder meetings.


Mark Gelowitz, chair of the National Corporate Governance and Securities Litigation Group at Osler, Hoskin  & Harcourt LLP, believes that is changing.

He says a proposal being considered by Canadian securities regulators to allow boards to install poison pills and keep them in place up to a year - with shareholder approval - will likely lead to more proxy action.

“What that’s  going  to, create is a shifting of the litigation tactics in relation to poison pills, because what bidders will need to do, essentially, is fight a proxy battle on the shareholder vote to accept or reject a poison pill.

“It’s actually pretty early days on proxy litigation issues so far. But what I see in the future is as we get more and more of this, we’re going to have a ramping up of litigation in relation to those shareholder-meeting issues driven by an increase in activist investor activity.”

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