IN THE MATTER OF THE SECURITIES LEGISLATION OF THE
PROVINCES OF BRITISH COLUMBIA,
SASKATCHEWAN, MANITOBA, Qu�bec, NEW BRUNSWICK, NOVA SCOTIA AND NEWFOUNDLAND
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF CONOR PACIFIC ENVIRONMENTAL TECHNOLOGIES INC.
MRRS DECISION DOCUMENT
[para 1]
WHEREAS the local securities regulatory authority or regulator (the "Decision
Maker") in each of British Columbia, Saskatchewan, Manitoba, Qu�bec, New Brunswick,
Nova Scotia and Newfoundland (the "Jurisdictions") has received an application
from Conor Pacific Environmental Technologies Inc. (the "Filer") for a decision
pursuant to the securities legislation of the Jurisdictions (the "Legislation")
that the proposed distribution of common shares of the Filer ("Common Shares")
to the Filer's creditors (the "Creditors") in connection with the completion of
the Filer's Plan of Compromise and Reorganization and Plan of Arrangement (the
"Plan") be exempt from the Registration Requirement and the Prospectus
Requirement (as defined in the Legislation);
[para 2]
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive
Relief Applications (the "System"), the British Columbia Securities Commission
is the
principal regulator for the application;
[para 3]
AND WHEREAS the Filer has represented to the Decision Makers that:
1. the Filer is a corporation amalgamated under the laws of the Province
of Alberta on July 12, 1996, with its head office located in Vancouver,
British Columbia and its
registered office located in Calgary, Alberta;
2. the authorized capital of the Filer consists of an unlimited number
of Common Shares without par value, an unlimited number of Class A Preferred
Shares without par value and
an unlimited number of Class B Preferred Shares without par value, of which
55,577,827 Common Shares, no Class A Preferred Shares and no Class B Preferred
Shares were issued and
outstanding as at February 13, 2001;
3. the Filer is a reporting issuer, or the equivalent thereof, in the provinces
of British
Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Qu�bec and Nova Scotia;
4. the Filer is not a reporting issuer in New Brunswick or Newfoundland
and has no current intention of becoming a reporting issuer in those provinces;
5. the Common Shares of the Filer are listed and posted for trading on
The Toronto Stock Exchange Inc.;
6. one or more of the Filer's Creditors resides in each of the Jurisdictions;
7. on November 10, 2000, an application was made by the Filer to the Court
of Queen's
Bench of Alberta (the "Court") and an order was granted by the
Court pursuant to
the Companies' Creditors Arrangement Act (Canada) (the "CCAA")
and the Business
Corporations Act (Alberta) (the "ABCA") respecting, among other things, a
stay of all actions, suits and proceedings (the "Initial Order") until December
8, 2000; the Initial Order also provided for the appointment of KPMG Inc. as monitor (the
"Monitor"), authorized the Filer to call a meeting of its General Creditors (as
defined below) to consider and, if thought fit, to approve the Plan and directed that the
Filer give its shareholders notice of the Plan and of a hearing of the Court to be held on
December 8, 2000 to consider the fairness of the Plan; the stay of proceedings was
subsequently extended to April 2, 2001; on December 20, 2000, the Filer obtained an order
from the Court (the "Final Order") sanctioning the Plan, declaring
that the Plan is fair and reasonable and in the best interest of the Filer's
Secured Creditors, General
Creditors and shareholders;
8. an information circular and proxy statement relating to the meeting
of the General Creditors containing all material disclosure regarding the
Plan was prepared and mailed to
the General Creditors in the week of November 13, 2000; the General Creditors
approved the Plan on December 4, 2000;
9. shareholder approval of the Plan is not required under the CCAA or the
ABCA; accordingly, no meeting of the shareholders of the Filer has been
held; on November 10,
2000, the Filer gave its shareholders notice of the Plan and of the Court
hearing as directed by the Initial Order;
10. the purpose of the Plan is to permit the Filer to settle its indebtedness
by the issuance of Common Shares to certain of its Creditors, which have
been divided into two
classes, secured creditors (the "Secured Creditors") and unsecured creditors
(the "General Creditors"); the Plan sets out specific repayment
terms to the Secured Creditors and certain of the General Creditors and contemplates
the issuance of
approximately 1,045,000,000 Common Shares to Creditors to extinguish approximately
$23
million of secured and unsecured indebtedness;
11. the TSE has conditionally approved the listing of the Common Shares
upon implementation of the Plan, subject to certain conditions, including
the condition that
the Plan be implemented on or before March 30, 2001;
12. the Monitor conducted a liquidation analysis, pursuant to which it
concluded that liquidation appears to be a certain consequence of failure
to implement the Plan and that,
under a forced liquidation, realizations on the Filer's assets will likely
be significantly less than the value of secured indebtedness;
13. the trades in Common Shares under the Plan to the Creditors may not
fall within any of the registration and prospectus exemptions under the
Legislation;
14. in the absence of the relief requested, the Filer will face liquidation;
in such a scenario, the Secured Creditors will realize less than the full
amount of their claim
against the Filer and all of the General Creditors, shareholders and other
stakeholders of the Filer will almost certainly receive no compensation
in respect of their claim against
the Filer;
[para 4]
AND WHEREAS pursuant to the System this MRRS Decision Document evidences
the decision of
each Decision Maker (collectively, the "Decision");
[para 5]
AND WHEREAS each of the Decision Makers is satisfied that the test contained
in the Legislation that provides the Decision Maker with the jurisdiction
to make the Decision
has been met;
[para 6]
The Decision of the Decision Makers pursuant to the Legislation is that:
1. The Registration Requirement and the Prospectus Requirement shall not
apply to the issuance of Common Shares to the Filer's Creditors in connection
with the completion of
the Plan; and
2. the first trade in the securities acquired by the Creditors under this
Decision in a Jurisdiction is deemed to be a distribution or a primary
distribution to
the public under
the Legislation of such Jurisdiction (the "Applicable Legislation")
unless:
(a) at the time of the trade, the Filer is and has been a reporting issuer or the equivalent under the Applicable Legislation for the 12 months immediately preceding the trade or, in the case of New Brunswick and Newfoundland, the Filer has filed with such Jurisdiction the continuous disclosure documents filed by it with the other Jurisdictions;
(b) if the seller is an insider or officer of the Filer, the seller has no reasonable grounds to believe that the Filer is in default of any requirement of the Applicable Legisation;
(c) no unusual effort is made to prepare the market or to create a demand for the securities;
(d) except in Qu�bec, the first trade is not a distribution from the holdings of a person or company who holds a sufficient number of the voting rights attaching to all outstanding voting securities of the Filer to affect materially the control of the Filer or each person or company in a combination of persons and companies, acting in concert by virtue of an agreement, arrangement, commitment or understanding, which holds in total a sufficient number of voting rights attached to all outstanding voting securities of the Filer to affect materially the control of the Filer, and, if a person or company or combination of persons or companies holds more than 20% of the voting rights attached to all outstanding voting securities of the Filer, the person or company or combination of persons or companies is deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the Filer; and
(e) no extraordinary commission or consideration is paid in respect of the trade.
[para 7]
DATED March 29, 2001.
Brenda Leong
Director
Headnote
Mutual Reliance Review System for Exemptive Relief Applications Relief
granted from prospectus and registration requirements in connection with
a distribution of securities
to secured and general creditors under a plan of compromise and reorganization
and plan of arrangement under the Companies' Creditors Arrangement (Canada)
and the Business
Corporations Act (Alberta). First trade relief granted subject to certain conditions.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 34(1)(a), 48, 61, and 76