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BU8INESS ORGANIZATIONS II Ronald J. Daniels Jeffrey Macintosh VOLUME II January 1991 Faculty of Law University of Toronto BORA IASKIH LAW LIBRARY APR 2 1991 FAiiiitYY Of LAW UNIVERSITY OF TORONTO BORA LASKIN' LAW LIBRARY ^.UNIVERSITY OF TORONTO BUSINESS ORGANIZATIONS II Ronald J. Daniels Jeffrey Macintosh VOLUME II January 1991 Faculty of Law University of Toronto Digitized by the Internet Archive in 2018 with funding from University of Toronto https://archive.org/details/businessorganiza02dani TABLE OF CONTENTS PAGE V. (i) R.J. Balfour, "Registration of Dealers Under The Ontario Securities Act: From The Exempt Market to Universal Registration" . 546 (ii) In The Matter of The Securities Act, 1978 and In The Matter of Barbara A. Danuke, James M. Macdonald, Donald J. Scott, and William J. Seitz . 573 (iii) Ryder v. Osier, Wills, Bickle Ltd. et al. 586 (iv) Chalmers v. Toronto Stock Exchange . 601 VI. CONTINUOUS DISCLOSURE A. Materiality and The Disclosure Obligation (i) Securities Exchange Act of 1934 . 613 (ii) Sec v. Texas Gulf Sulphur Co. 613 B. Timely Disclosure Under The Ontario Securities Act (i) Excerpt from Johnston, Canadian Securities Regulation. (1977), "Continuous Disclosure" . 631 (ii) Excerpt from Grover & Baillie, "Disclosure Requirements", in Proposals for a Securities Market Law for Canada, Vol.3, (1979) . 634 (iii) Note . 644 (iv) Excerpt from Alboini, Securities Law and Practice, (1984) . 644 (v) Excerpt from Crawford, in CBA, Recent Securities and Corporate Law Developments - Advice to My Client, (1980) 665 (vi) Excerpt from Consolidation of Remarks of Peter J. Dey Concerning Disclosure Under The Securities Act Made to Securities Lawyers in Calgary and Toronto on June 7 and 9 681 (ii) (vii) Toronto Stock Exchange Practice, Law Society of Upper Canada, Nov. 19/86. B.K. Grasmuck, "Timely Disclosure, Press Release and Trading Stoppages" 689 C. Interim Reporting Requirements (i) Note . 696 (ii) Excerpt from Crawford, "Timely Disclosure Trading on The Basis of Material, Non-Public Information and the Legislating of GAAP", in CBA, Recent Securities and Corporate Law Developments - Advice to my Client, (1980). 696 (iii) Re Denison Mines Ltd. and Ontario Securities Commission . 700 (iv) In The Matter of the Securities Act, R.S.O. 1980, ch.466, as amended and In The Matter of Calgroup Graphics Corporation Ltd. 706 (v) In the Matter of the Securities Act and In The Matter of Northern Telephone Company Ltd. 709 (vi) Toronto Globe and Mail, June 23/87, "Bogus Takeover Offer Raises Questions About Safeguards on False Information" . 711 (vii) The Globe and Mail, Saturday, June 27/87, "Three Investors File Suit After Purchasing Stock Related To Bogus Offer" . 712 D. Civil Liability (i) 7 O.S.C.B. 4910 (Nov.23/84): "Civil Liability for Continuous Disclosure Documents Filed Under The Securities Act - Request for Comments" . 713 VII. INSIDER TRADING A. The Theory of Insider Trading and its Regulation (i) D.W. Carlton and D.R. Fischel, "The Regulation of Insider Trading" . 724 (ii) F.H. Easterbrook, "Insider Trading as an Agency Problem" . 749 (iii) See Casebook. Business Organizations I, 769-781 (iii) B. Statutory Materials (i) See Ontario Securities Act, ss. 74, 75, 102, 118, 122, 123, 131, 132, 135 and Regulations. (ii) See Ontario Business Corporations Act, s. 138, Canadian Business Corporations Act, ss. 126-131. (iii) See Casebook, Business Organizations I, pp. 790-791, 801-807. C. Cases (i) See Green v. Charterhouse Group Canada Ltd., Casebook. Business Organizations I, p. 808. (ii) See Re Harold P. Connor, Casebook, Business Organizations I, p. 813. VIII.WORRIES ABOUT CREDITORS; THE AGENCY COSTS OF DEBT (i) Jensen & Meckling, "Theory of The Firm: Management Behaviour, Agency Costs, and Ownership Structure" (excerpts) . 765 (ii) C. Smith, Jr. & J. Warner, "On Financial Contract¬ ing: An Analysis of Bond Covenants", Journal of Financial Economics (1979) . 773 IX.CORPORATION DISTRIBUTIONS: AGENCY COSTS OF DEBT AND OTHER THEORIES A. Statutory Provisions: See Ontario Business Corporations Act, ss. 23, 24, 30 31, 32, 36, 38, 184(28). See Canadian Business Corporations Act, ss. 25, 26, 34, 35, 36, 38, 42, 190(26). B. Dividends (i) R. Brealey, "Does Dividend Policy Matter? Midi and Corporate Finance Journal, Spring 1983 . 779 (ii) M. Miller, "Behavioral Rationality in Finance: The Case of Dividends" Midland Corporate Finance Journal, Winter 1987 . 787 (iv) C. Stock Splits and Stock Dividends (i) J. Lakonishok & B. Lev., "Stock Splits and Stock Dividends: Why, Who, and When" Journal of Finance. Sept. 1987...... 799 (ii) G. Charest, "Returns to Splitting Stocks on the Toronto Stock Exchange" . 816 D. Share Repurchases (i) Vermaelen, "Common Stock Repurchases and Market Signalling" . 830