92 C.R. - Q.32

Where an individual causes two wholly-owned corporations, one of which is virtually insolvent, to be amalgamated with each other, RC ordinarily will not seek to apply s. 15(1) notwithstanding that a loan owing to the individual by the insolvent corporation will increase in value as a result of the amalgamation. This position is premised on the assumption that there is a corresponding decrease in the value of the shares held by the individual.

Where a corporation whose shares are owned by an individual amalgamates with a loss company whose shares are held by, and whose loan capital is owed to, a related individual, it is likely that ss.87(4)(c) to (e) will apply in respect of the amalgamation, in which case RC will not seek to apply s. 15(1).