• Fiduciary Out Clauses
  • March 19, 2010
  • Law Firm: Aird & Berlis LLP - Toronto Office
  • A recent order made by the Honourable Madam Justice Pepall in the Canwest Companies’ Creditors Arrangement Act proceedings suggests that a “fiduciary out” clause is not an essential component of an agreement for subscription of shares in an insolvent company undergoing restructuring. A fiduciary out clause is the provision found in some acquisition agreements allowing directors of a target company to terminate the agreement pursuant to their fiduciary duty to shareholders if a better offer is received.