On June 30, 2011, MI Developments Inc. (MID) eliminated its dual-class share structure by way of a plan of arrangement under the Business Corporations Act (Ontario).
The reorganization proposal was made by a majority of the holders of MID's Class A Subordinate Voting Shares (the “Initiating Shareholders”) and supported by MID's controlling shareholder, (the “Stronach Shareholder”) a company controlled by the Stronach Trust.
The plan of arrangement provided for the elimination of MID's dual-class share structure through: the cancellation of all of MID's Class B Shares held by the Stronach Shareholder in consideration for the transfer to the Stronach Shareholder of MID's horse racing, gaming and real estate development assets (and associated liabilities), MID's head office, US$21.5 million of funding for the transferred assets and certain other assets with a collective fair market value in the range of US$585 million to US$730 million; and the purchase for cancellation by MID of the remaining Class B Shares in consideration for 1.2 Class A Subordinate Voting Shares which were renamed Common Shares following the cancellation of the Class B Shares.
MID will continue to operate its income-producing real estate business and is restricted from engaging in or having an interest in, directly or indirectly, any business related to horse racing or gaming in accordance with the terms of a forbearance agreement.
MID was represented by Vito Ciraco, Vice-President and Associate General Counsel, and Jane Lynn, Senior Legal Counsel. Davies Ward Phillips & Vineberg LLP acted as Canadian counsel to MID, with a team comprising Vincent Mercier, Peter Hong, Brett Seifred, Ryan MacDermid and Matthew Hawkins (corporate and securities); Donald Stanbury and Patrice Thomas (real estate) and John Ulmer and Neal Armstrong (tax). Sidley Austin LLP acted as US counsel to MID with a team comprising Scott Freeman and Christopher Restad (corporate) and Laura Barzilai (tax).
Borden Ladner Gervais LLP acted as counsel to the special committee of MID's Board of Directors with a team comprising Jeff Barnes, Paul Simon, Larissa Tkachenko and Habeeb Syed.
The Stronach Shareholder was represented by Alon Ossip, as well as Gavin Sinclair and Radha Khosla of Heenan Blaikie LLP. Stikeman Elliott LLP acted as corporate and securities counsel to the Stronach Shareholder, with a team comprising Edward Waitzer, Brian Pukier, Amanda Linett, Jonah Mann and Craig Broadhurst.
Miller Thomson LLP acted as tax and real estate counsel to the Stronach Shareholder with a team comprising John Campbell, Lyne Gaulin and James Fraser (tax) and Michael Wren and Luxmen Aloysius (real estate).
Blake, Cassels & Graydon LLP acted as Canadian counsel to certain Initiating Shareholders, with a team comprising Jeffrey Lloyd, Tim Andison and Stacy McLean (corporate and securities); Ron Richler (tax) and Gerald Swinkin (real estate). Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as US counsel to those Initiating Shareholders with a team comprising Jeff Marell, Ted Maynard, David Sicular and Cory Kampfer.