Canadian Supreme Court to hear BCE sale dispute

Canada's top court will hear an appeal by the country's largest telecom company asking the justices to overturn a lower court's decision that would prevent its US$35 billion (€22.5 billion) sale to a teachers pension fund, an Associated Press report said.

BCE, also known as Bell Canada, told the Supreme Court last month that if the lower court's decision stands, billions of dollars of value would be lost for the company and its shareholders.

The sale to a group led by the Ontario Teachers Pension fund would be largest leveraged buyout in history. It has a June 30 deadline, the Associated Press report said.

The Supreme Court will hear the appeal on June 17.

The lower court, Quebec's Court of Appeal, ruled last month that the sale was unfair to bondholders because BCE directors didn't consider them when they agreed to sell the company.

Bondholders want to block the sale because they say the deal loads the corporation with debt and makes the bonds much riskier.

The deal was agreed to last June, just days before credit markets began to unravel in North America.

The Supreme Court granted the company an expedited process after BCE argued that if the court did not hear the case quickly the takeover deal could fall apart.

BCE argued the lower court made a mistake by imposing mandatory obligations on directors to consider and protect the economic interests of both the shareholders and creditors of a company.

The lower court ruling goes beyond the Supreme Court's recognition in a 2004 case that boards have discretion to consider the interests of its diverse stakeholders, BCE said.

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