See also Calloway REIT elimination of subtrust through s. 107.4 transfer and s. 132.2 merger (including diagram)below.

Current structure

Calloway is an open-end REIT, with a market cap of $2.8B, whose units trade on the TSX. It owns all the units of Calloway Holdings Trust ("Sub Trust") which, in turn, holds Class A units of three subsidiary LPs. Third parties also hold units of the three LPs including exchangeable units.

Transaction overview

In order to effectively wind-up Sub Trust on a rollover basis:

Background

Overview

Kingsway is adopting a modified version of a shareholder rights plan (the "Plan") with a term of three years and a triggering point of 5% of its shares rather than 20% in order to protect its U.S. net operating losses having regard to the Code s. 382 rule.

Basic program

Shareholders will continue to receive cash dividends unless they elect to receive share dividends. Those who elect to participate in the share dividend program will have their dividend satisfied by the issuance of that number of common shares determined by dividing the dollar amount of the dividend on their shares by 95% of the 5-day VWAP value of the common shares immediately prior to the dividend payment date (as described in the amended articles). The shareholder can elect to participate for only a portion of its shareholding.

Reason for s. 86 reorg

Overview

The Anderson shareholders will transfer all their common shares of Anderson under an Alberta Plan of Arrangement to a new Alberta company (New Anderson) in exchange for an equal number of New Anderson common shares. Anderson then will transfer most of its assets to New Anderson, other than shallow gas assets (which are considered to be non-core assets) in consideration for assumption of liabilities and the issuance of New Anderson common shares – which will then be distributed to New Anderson for cancellation as a stated capital distribution.

For the subsequent CRA attack, see under Spin-Offs & Distributions – Liquidations.

Overview