2024 Ruling 2024-1043951R3 - Post-Mortem Pipeline - Supplemental Ruling

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether correction to ruling request impacts rulings provided.

Position: No.

Reasons: Correction relates solely to a misdescription of share terms that do not impact the outcome of the proposed transactions.

XXXXXXXXXX 									2024-104395

XXXXXXXXXX, 2024

Dear XXXXXXXXXX:

Re: Supplemental Income Tax Ruling
XXXXXXXXXX

This is in reply to your emails of XXXXXXXXXX advising us that certain share terms described in Paragraph 19 of the advance income tax ruling under file number 2024-100951 (the Ruling Letter) were inaccurate. Based on your emails, the share terms described in paragraphs 19(a) to (e) should be replaced by the following:

(a) Class A common shares (Newco Class A Common Share) and class B common shares that will be voting, participating, entitle the holder to receive discretionary dividends and, in the event of the winding-up, dissolution or liquidation of the corporation, entitle the holder to share equally in the remaining property and assets of the corporation with the other classes of common shares;

(b) Class C common shares and class D common shares that will be non-voting, participating, entitle the holder to receive discretionary dividends and, in the event of the winding-up, dissolution or liquidation of the corporation, entitle the holder to share equally in the remaining property and assets of the corporation with the other classes of common shares;

(c) Class A preference shares that will be voting, non-participating, and redeemable and retractable for a redemption amount equal to $XXXXXXXXXX/share, entitle the holder to receive discretionary, non-cumulative dividends of XXXXXXXXXX% of the redemption amount, as declared at the discretion of the directors and in the event of a winding-up, dissolution or liquidation of the corporation, entitle the holder to an amount up to the redemption amount of the shares plus any declared but unpaid dividends pari passu with the holders of the other preferred share classes and in priority to the holders of the common shares;

(d) Class B preference shares that will be non-voting, non-participating, and redeemable and retractable for a redemption amount equal to $XXXXXXXXXX/share, entitle the holder to receive discretionary, non-cumulative dividends of XXXXXXXXXX% of the redemption amount, as declared at the discretion of the directors and in the event of a winding-up, dissolution or liquidation of the corporation, entitle the holder to an amount up to the redemption amount of the shares plus any declared but unpaid dividends pari passu with the holders of the other preferred share classes and in priority to the holders of the common shares; and

(e) Class C and class D preference shares that will be non-voting, nonparticipating, and redeemable and retractable for a redemption amount equal to $XXXXXXXXXX/share, and in the event of a winding-up, dissolution or liquidation of the corporation, entitle the holder to an amount up to the redemption amount of the shares plus any declared but unpaid dividends pari passu with the holders of the other preferred share classes and in priority to the holders of the common shares.

You have asked us to confirm that the share terms, as described above, will not impact the rulings provided in the Ruling Letter.

Confirmation

Provided that the correction referred to above and the statements contained in the Ruling Letter constitute a complete and accurate disclosure of all the relevant facts and proposed transactions, we hereby confirm that, subject to the conditions, limitations, qualifications and comments set out in the Ruling Letter and in Information Circular 70-6R12 dated April 1, 2022, the rulings given in the Ruling Letter will continue to be binding on the Canada Revenue Agency.

Yours truly,

XXXXXXXXXX
Manager
Reorganizations Section II
for Division Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch