Pointe West Golf Club Corp. – s. 1(10)
Headnote
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order that the issuer is not a reporting issuer under applicable securities laws -- issuer cannot avail itself of the simplified procedure because: (1) its securities, including debt securities, are not beneficially owned by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide, and (2) the Filer cannot represent that it is not in default of securities requirements in any jurisdiction -- relief granted.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10).
July 2, 2024
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, CHAPTER S.5, AS AMENDED (the Act) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF POINTE WEST GOLF CLUB CORP. (the Filer)
ORDER (Subsection 1(10))
Background
The Ontario Securities Commission (the OSC) has received an application from the Filer for an order under the securities legislation of Ontario (the Legislation) that the Filer has ceased to be a reporting issuer in Ontario (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications, the OSC is the principal regulator for this application.
Interpretation
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this order, unless otherwise defined.
Representations
This order is based on the following facts represented by the Filer:
The Filer
1. The Filer was incorporated as a corporation under the Business Corporations Act (Ontario) on December 31, 1989.
2. Further to a special meeting of shareholders of the Filer that was held on September 20, 2021, the shareholders of the Filer approved amendments to the articles and by-laws of the Filer such that the Filer is now a shareholder only golf club. The Filer is also a "for profit" corporation.
3. The Filer is not a "private issuer" within the meaning of National Instrument 45-106 Prospectus Exemptions (NI 45-106). However, the Filer is currently a reporting issuer in Ontario. The shares of the Filer do not trade on any stock exchange.
4. No securities of the Filer, including debt securities, are traded in Canada or any other country on a marketplace as defined in National Instrument 21-102 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
5. Since the Filer's initial public offering in 1992, the Filer has not taken steps to create a market for its securities, including debt securities and, in particular, it has never offered securities to the public in Ontario or any other jurisdiction in Canada by way of a prospectus offering.
6. There has never been any disruption in the annual meetings of the Filer's shareholders and all continuous disclosure documents that the Filer has been required to deliver to its shareholders, including proxy solicitation materials in relation to its annual meetings, have been delivered to the holders of its common shares and Class A shares that are entitled to receive them.
7. The Filer is not in default of its obligations under the securities laws of Ontario, except that:
(a) From September 22, 2021 to May 1, 2024 (the Period), the Filer purported to rely on the business combination and reorganization exemption contained in subsection 2.11(b) of NI 45-106 (the Business Combination and Reorganization Exemption) in connection with the distribution of its Class A shares. However, staff of the OSC have informed the Filer that the Business Combination and Reorganization Exemption did not appear to be available for use by the Filer during the Period and may therefore be considered a breach of securities legislation; and
(b) the Filer did not file its annual general meeting materials for 2024 or quarterly filings that were due on May 30, 2024 on SEDAR+.
8. The Filer is not eligible to cease to be a reporting issuer pursuant to the simplified procedure in Section 19 of National Policy 11-206 Process for Cease to be a Reporting Issuer Applications as the Filer has more than 400 voting securityholders in Ontario (each a Member).
9. The Filer will not be a reporting issuer in any jurisdiction in Canada immediately following the granting of the Order Sought.
The Filer's Outstanding Shares
10. The share capital of the Filer currently consists of an unlimited number of common shares and 600 Class A shares. Currently, 445 common shares and 435 Class A shares of the Filer have been issued.
Special Meeting of the Filer's Shareholders
11. The Board of Directors of the Filer (the Board), after careful consideration, determined that it was in the Filer's best interests to cease to be a reporting issuer in Ontario. Accordingly, the Filer held a special meeting of its Members on Monday, April 15, 2024 at 7:00 pm (the Special Meeting) to pass a resolution:
(a) to have the Filer cease to be reporting issuer in Ontario (the Cease to be a Reporting Issuer Resolution);
(b) to amend By-Law No. 1 (2022) of the Filer (the By-Law) to ensure that the Filer cannot issue any new shares from treasury, increase the number of shares of the Filer or change any of the rights of the shares of the Filer without the prior written consent of the OSC (By-Law Resolution #1); and
(c) to amend the By-Law:
(i) to clarify that the rights of a "Non-Shareholder Member" and the benefits of having a "Non-Shareholder Membership" do not include the ability to use the golfing facilities of the Filer;
(ii) to give the Board the ability, if necessary, to impose a fee on a Member who wants to transfer their shares of the Filer to someone else pursuant to an applicable prospectus exemption in NI 45-106 or a decision document granting exemptive relief from the prospectus requirements under the Act; and
(iii) to make certain non-material administrative corrections to the By-Law
(collectively, By-Law Resolution #2).
12. At the Special Meeting, 51 voting Members out of a possible 435 voting Members were present in person. In addition, there were 364 voting Members, out of a possible 435 voting Members, who were present in person or by proxy at the Special Meeting (i.e., approximately 83.7% attendance).
13. The results at the Special Meeting, were that the Members present in person or by proxy at the Special Meeting approved:
(a) the Cease to be a Reporting Issuer Resolution by 99.5%;
(b) By-Law Resolution #1 by 99.7%; and
(c) By-Law Resolution #2 by 97.5%.
14. A press release was issued on June 7, 2024, announcing that the Filer has applied to the OSC to cease to be a reporting issuer in Ontario, and that if the Order Sought is granted, the Filer will not be a reporting issuer in any jurisdiction in Canada immediately following the granting of the Order Sought. As of the date hereof, the Filer has not received any objections as a result of the news release.
Order
The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
OSC File #: 2024/0280