The Ontario Securities Commission granted NADG NNN Real Estate Investment Trust (the Filer) an exemption from the requirement to obtain separate minority approval for each class of units in a related party transaction. The exemption was granted under Section 9.1 of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101), which typically requires separate class voting. The Filer’s declaration of trust allows unitholders to vote as a single class unless materially different effects on the classes are present.
Key reasons for the exemption include:
1. The transaction does not materially affect any class of units differently.
2. An independent committee oversaw the transaction, supported by fairness opinions and an appraisal.
3. The Filer’s declaration of trust stipulates single-class voting unless classes are affected differently.
4. Separate class votes could give disproportionate veto power to a small number of unitholders.
The exemption is conditional upon:
1. Holding a special meeting for Disinterested Unitholders to vote as a single class on the transaction.
2. Preparing and delivering an information circular in accordance with securities law.
3. Including a fairness opinion in the information circular confirming the transaction’s fairness to Disinterested Unitholders.
The decision aligns with the public interest and fair treatment of Disinterested Unitholders, ensuring they are informed and can vote on the transaction’s merits.