Extraordinary Sale of All or Substantially All Assets

Summary

This practice note addresses corporate statutory restrictions on the sale, lease or exchange of "all or substantially all" of the property of a corporation other than in the "ordinary course of business". It provides an overview of the corporate requirements under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 ("CBCA") and in Ontario, Alberta and British Columbia and, in particular, will address: (1) the statutory provisions governing the sale of all or substantially all of a corporation's property; (2) how "out of the ordinary course" and "all or substantially all" have been defined by Canadian courts; and (3) the consequences of failing to comply with the statutory requirements. Finally, this practice note will provide practical tips for corporations considering the sale of property out of the ordinary course.