On June 29, 2000, Justice Cumming released his judgment in the action brought by noteholders of the ill-fated BCE property development vehicle, BCE Development Corp. (now BF Realty). Justice Cummings held in favour of BF Realty’s claim that the transfer of assets out of BCE Development as part of a corporate restructuring (which left the noteholders with no security), did not breach the trust indenture governing the debenture issue. Justice Cummings held that since the assets never left the larger corporate enterprise, there was no sale of all or substantially all the assets to another person and therefore no breach of the trust indenture. He also found that there was nothing in the trust indenture that prevented the company from granting security over all of its assets (or prevented a lender from enforcing such security).
Ken Prehogan, John Rosolak and Kerry Boniface of Weir & Foulds acted for the plaintiffs. Alan Lenczner and Anne Posno of Lenczner Slaght Royce Smith Griffin acted for BCE Inc. and a number of directors. David Byers and Elizabeth Pillon of Stikeman Elliott acted for Carena Developments Limited, Partnerco Equities Ltd. and a number of the directors. Mark Gelowitz of Osler, Hoskin & Harcourt LLP acted for the independent directors. Edward Babin, Jane Bailey, Andrew Bernstein and Belinda Burnett with the assistance of Edwin Nordholm of Torys represented both BF Realty and its main operating subsidiary, Brookfield Development Corp. (owner of BCE Place).