InterOil – B.C. Court of Appeal invalidates a Plan of Arrangement which had received strong shareholder support

The Yukon Court of Appeal (composed of members of the B.C. Court of Appeal) found that the Plan of Arrangement for the Exxon acquisition of InterOil should not be approved given that Exxon and InterOil did not in its view counter the testimony of Peter Dey that the process undertaken by the InterOil board did not meet current governance best practices and of a oil and gas expert that the consideration was inadequate. The judge below had placed too much significance on the approval of the combination by over 80% of the InterOil shareholders.

The relevance of this to a tax practitioner is that, in some circumstances, the securities lawyers on the team may be more reluctant to undertake a business combination by way of plan of arrangement.

Neal Armstrong. Summary of InterOil Corp. v. Mulacek, 2016 YKCA 14 under OBCA, s. 182(5)(f).