7 April 1993 Memorandum (Tax Window, No. 31, p. 6, ¶2513)

A standard distress preferred share ruling is that s. 112(4) will not apply in respect of any dividends received by the specified financial institution on the distress preferred shares, to any loss realized by the institution on the debt subsequent to it being reacquired by the institution or to any loss realized by the institution on any loan made by the institution as described.

A standard distress preferred share ruling is that no amount will be included in the income of Distressco pursuant to ss.15(1) and 246(1) solely by virtue of the fact that interest will not be paid or payable by Distressco to Newco on the debt.

A standard distress preferred share ruling is that provided the debt arose from one or more loans made by the specified financial institution in the course of its money-lending business, the debt reacquired by the institution will be considered to have been acquired by it in the ordinary course of its business of lending money for the purposes of ss.20(1)(l) and (p).