The Business Judgment Rule, the Public Interest Powers, and the “Fair and Reasonable” Test: Fellow Travellers or Ships in the Night?
Bibliographic record
Abstract
In the most controversial corporate transaction in Canadian history, Magna repurchased all of the Class B superior voting shares from its controlling shareholder, Frank Stronach, at a 1799 per cent premium to the otherwise identical but inferior voting Class A shares, thus ending Stronach’s long reign as de jure controller of Magna. Despite this massive and unprecedented premium, the transaction generated about three billion US dollars in aggregate value, or about 40 per cent of the pre-transaction market cap of Magna. I nonetheless argue that the transaction was massively flawed from both a procedural and substantive point of view and should not have been approved by the Ontario Securities Commission (OSC). The OSC has artificially and incorrectly limited its public interest powers to situations where there is an abuse of both shareholders and capital markets, as opposed to mere unfairness. But even under the ostensibly more demanding abuse standard, by flagrantly transgressing extant commercial norms, the transaction violated the reasonable expectations of Class A shareholders and should not have been approved.The transaction was also approved by the Ontario Superior Court of Justice as meeting the “fair and reasonable” standard required of a statutory arrangement. In so doing, the court followed extant jurisprudence. Nonetheless, the test itself is a historical anachronism that substantially ignores the two most important developments in Canadian corporate and securities law in the past half-century: the recognition of reasonable expectations as a source of legal rights, and a focus on the procedural propriety of the transaction as an indicium of substantive fairness.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.005 | 0.015 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.015 | 0.055 |
| Scholarly communication | 0.013 | 0.007 |
| Open science | 0.003 | 0.002 |
| Research integrity | 0.010 | 0.010 |
| Insufficient payload (model declined to judge) | 0.005 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".