Jim Hamilton’s World of Securities Regulation
Canadian Appeals Court Extends Revlon Doctrine to Bondholders

In a significant and groundbreaking ruling, a Canadian appeals court said that the Delaware doctrine requiring directors to maximize shareholder value through an auction process when a company is in play also applies to bondholders. In a unanimous decision, the Quebec Court of Appeals said that Canadian directors have a more extensive duty than that of directors of Delaware companies. The duty of care in Canada requires consideration of the impact of a takeover or leveraged buyout on bondholders as well as shareholders.