Is the World Better Prepared for the Next Financial Crisis?

Eight years have passed since the most recent global financial crisis although its long-term effects linger in the form of low growth rates, weak labour markets and high levels of public and private indebtedness in many countries.  History suggests that we will experience more crises which will increasingly exhibit international dimensions with the internationalization of financial markets. Thus, we must confront the central question of whether there is an optimal regulatory structure that countries should implement, given that members of the G-20 have individually committed to regulating systemic risk in their respective domestic economies.

Financial crises come in many shapes and sizes. In a recent widely acclaimed survey of eight centuries of financial crises around the globe, Reinhart and Rogoff (2009) helpfully categorize them as including sovereign defaults, banking crises, exchange rate crises and finally crises marked by bouts of very high inflation that constitute the de facto equivalent of outright default on public or private sector debt. These are not watertight categories, of course – what may begin as one type of crisis can quickly transform into a different class of crisis both within and across countries.

InterOil-Exxon precedent delivers a wake-up call on fairness opinions

 

Published in the Globe and Mail on November 29, 2016.

Rare is the precedent-setting securities case that emerges from the Yukon Court of Appeal. The recent attempted arrangement between InterOil Corp. and Exxon Mobile Corp., however, has given rise to such a case. The decision contains a welcome judicial pronouncement on fairness opinions in the context of corporate mergers.

InterOil was set to merge with another corporation before Exxon came forward with a “white knight” offer. InterOil’s financial adviser, Morgan Stanley, provided it with a fairness opinion stating that the merger (which was structured as an arrangement) was fair from a financial point of view.

While fairness opinions are common in merger transactions, their purpose may be legitimately questioned. Should they provide shareholders with information about their investment and the transaction under consideration? Or, in the words of the judge at first instance, are they simply “comfort letters” that provide boards with support for their decision to enter into the merger?

When is an Arrangement an "Arrangement"?

 

Recently, the Alberta Court of Queen’s Bench handed down a decision regarding the proposed merger of Alberta Oilsands Inc. (AOS) and Marquee Energy Ltd. (Marquee) via a plan of arrangement. [1] The well-reasoned decision rightly suggests that it is within the court’s discretion to decide whether all affected parties are being treated fairly and reasonably in a proposed arrangement. It is not up to the corporation seeking to be arranged to make this determination for the court.

AOS is an Alberta VSX listed public company which has no business operations, but close to $35 million of cash on its balance sheet.  The board of AOS has spent several years in a strategtic process to identify an acquisition that would be beneficial for the company.

The Dangers of Euthanasia on Demand: Op-ed Chicago Tribune on the Dutch "Completed Life" Assisted Dying Proposal

The following co-authored editorial first appeared in the Chicago Tribune on October 18, 2016. It is a commentary on the Dutch government's proposal to introduce a new law that would enable state organized life-ending interventions for people who feel they have a 'completed life' but do not suffer from any 'untreatable medical condition' that causes 'unbearable suffering' (which are the key criteria to obtain access under the Dutch Euthanasia law). A new special 'counsellor in dying' would assess whether the request to have one's life terminated would be 'genuine' and based on a reasonable assessment of 'completed life'. 

The dangers of euthanasia-on-demand

Senator Murray Sinclair's Call for Senatorial and Legal Restraint Should Inspire All of Us

The deluge of op-eds, blogs, commentaries, media interviews and news reports about Bill C-14 on Medical Assistance in Dying has created a level of over-saturation. More careful, reflective statements are increasingly hard to find. What now dominates the debate are bold statements about the constitutionality of the Bill—University of Ottawa’s Amir Attaran apparently even inventing a new constitutional qualifier of ‘unconstitutional by the bucketfull’--and reports of difficult and emotional end-of-life situations, which Bill C-14 may indeed not necessarily solve. It is therefore perhaps no surprise that the eloquent, respectful and wise intervention in the Senate by the Honourable Murray Sinclair, former judge and former Chair of the Residential Schools Truth and Reconciliation Commission, did not receive much attention in the media.

New Bill Medical Assistance in Dying Balances Competing Charter Rights; Prior Review Still Needed

The Canadian government just released its bill on Medical Assistance in Dying, in response to the Carter decision. The Government wisely decided that a criminal law prohibition should remain in place, but that in exceptional circumstances, medical acts that hasten a person's death are exempted from the criminal prohibition.  The Bill is emphasizing the importance of balancing competing Charter rights: the right for some people in exceptional circumstances to obtain active medical support for a life ending intervention (justified under Carter under the right to life, liberty and security of the person) and the right of those who are vulnerable and require our protection and full support, which--as Dianne Pothier aptly demonstrates--is associated with the Right to Life and Security of the Person and the Right to Equality. The access criteria reflect an appropriate balance, which was missing from previous reports that nearly exclusively focused on 'access' and individual choice, that ignored how contextual factors contribute to vulnerability, and that ignored growing evidence of problems in open-ended access regimes.

Canadians Support a More Prudent Approach to Medical-Aid-in-Dying than Parliamentary Committee, and Rightly So

Just when the federal government is about to table its bill on medically-hastened-death (or medical-aid-in-dying, physician-assisted dying, euthanasia, or physician-assisted-suicide), a new extensive poll of what Canadians want to see in new legislation suggests that Canadians support a more prudent approach than the open-ended access approach put forward by the Joint Parliamentary Committee (JPC) report and, prior to that, a Provincial-Territorial Expert Advisory Group (PTEAG) report. Canadians continue to support access to ‘physician assisted suicide’ (PAS), the term used in the poll, but a majority (51.8%) opposes the idea of providing access to PAS when the request is based on psychiatric conditions and purely psychological suffering. A majority also appears opposed to PAS for mature minors (in the poll: 16 to 17 year olds).  The 1,000 people polled were also asked about what they preferred as review mechanism. 59% of those polled support the recommendation by the committee of a review by two physicians, while 41 % supports a review by a ‘panel of independent experts’.

Joint Parliamentary Committee Assisted Dying Report Goes Beyond Scope, Ignores Evidence

This blog post follows my earlier posting about Balancing Access to Physician Assisted Dying and Protecting the Vulnerable

The following op-ed with David Baker was first published on the Globe and Mail website on February 27, 2016. We also added a short note in relation to attempts by some colleagues to impose changes to our text after publication.

Assisted Dying Report Goes Beyond Scope, Ignores Evidence

David Baker and Trudo Lemmens

Published Globe and Mail Saturday, Feb. 27, 2016

David Baker is a constitutional lawyer who represented the national disability groups in Rodriguez and Carter. Trudo Lemmens is Professor and Scholl Chair in Health Law and Policy at the Faculty of Law of the University of Toronto

Balancing Access to Physician Assisted Dying with Protecting the Vulnerable

The federal government is currently working on legislation that responds to the Supreme Court’s Carter v. Canada (AG) decision, in which the Court invalidated an absolute prohibition on physician assisted dying and invited the legislator to develop a “carefully designed and monitored system of safeguards.” The Carter decision declared the criminal prohibition void insofar it prohibits physician assisted dying for a “competent adult person who (1) clearly consents to the termination of life; and (2) has a grievous and irremediable medical condition (including an illness, disease or disability) that causes enduring suffering that is intolerable to the individual in the circumstances of his or her condition.” The Court provided no further detail about how to implement these ‘parameters’, and stated explicitly: “the scope of this declaration is intended to respond to the factual circumstances in this case. We make no pronouncement on other situations where physician-assisted dying may be sought.” The case involved people who were terminally ill and/or, in the words of the trial judge in the case, people with “advanced weakening capacities with no chance of improvement.” In fact, at the trial level the claim made by the British Columbia Civil Liberties Association was also narrowly framed as a claim to recognize the right to physician assisted dying of those “who are suffering unbearably at the end of life.”

The Success Stories of Dual Class Shares Miss an Incontrovertible Truth - The Globe and Mail Feb 22, 2016

Dual class share structures are fundamentally unfair: they leave the subordinate shareholders unprotected and cry out for a response from securities regulators. Proponents of such structures call up the success stories – like Fairfax or Onex – but rarely do they focus on the incontrovertible truth that dual class share structures undermine corporate governance standards because the subordinate shareholders carry a lopsided share of the economic risk in the firm relative to their ability to influence the affairs of the corporation through their vote.

In particular, these shareholders cannot elect directors, approve financial statements, appoint auditors or ensure change through their vote. Their rights are meaningless in the face of the proportionately greater economic risk that they bear. Dual class structures thus undermine existing accountability mechanisms in the corporate statute. Because the jurisdiction of securities regulators is founded on investor protection and the public interest, dual class share structures should be further regulated, if not prohibited, in capital markets.