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BCE case ‘gruelling’ for lawyers

|Written By Robert Todd

Advocates who worked on the BCE case at the Supreme Court of Canada say the expedited appeal, in which the top court dealt with questions surrounding the largest corporate transaction in Canadian history, stretched them to the brink.

‘When you have a $52-billion transaction - the biggest corporate transaction in Canadian history - and you have three days to do a factum, that’s pretty tough,’ says Markus Koehnen.

“Sleep, meals, children, and wife had to be pushed aside,” says Markus Koehnen, a McMillan Binch Mendelsohn LLP lawyer who represented BCE bondholders.

“The one thing you probably need for this, more than anything else, is just relentless tenacity. That’s far more important than any particular legal background,” he says.

The Supreme Court agreed on May 26 to fast-track BCE Inc.’s application to appeal a May 21 Quebec Court of Appeal judgment that overturned a March 7 Superior Court decision. The appeal court ruling threatened a $52-billion buyout offer led by the Ontario Teachers’ Pension Plan.

A response to that offer - which is considered the largest private-equity takeover to date - is due by June 30. At press time the top court had not rendered its decision.

The appeal court overturned a trial judge’s decision and found BCE’s board of directors failed to take into account the interests of all the company’s stakeholders when studying the bid.

Jill Copeland, executive legal officer for the Supreme Court, says the court expedites leave applications “with some regularity,” and notes that expedited cases are considered those in which a decision is rendered within two months of the application’s filing, versus the three to four months it usually takes.

However, in cases like BCE, applications can be “dramatically expedited,” says Copeland in an e-mail. For BCE, the court agreed on May 26 to accelerate the matter, granted leave to appeal on June 2, and heard the appeal June 17.

That put extreme pressure on top lawyers like Koehnen, who says at least 24 lawyers and law students at his firm, along with two law clerks, were involved with the BCE file, which was received last October.

“For everyone, it was probably one of the most gruelling cases they’ve ever worked on,” he says. “People really needed to amass very large teams internally, to break things down among a large group of people.”

He says the case presented rare obstacles ever since the claim began on Oct. 10, 2007, with a trial getting underway at Quebec Superior Court on Dec. 3. Between those dates, his team received about 15 affidavits with exhibits “running into the thousands and thousands of pages.”

During the trial, the lawyers continued conducting out-of-court cross-examinations, and prepared written arguments, while at the same time dealing with issues of production “at a very late stage in the trial.”

Koehnen says, “Small claims court files get more time to prepare than people had to prepare for this case.” He notes that his team received BCE’s written legal arguments, which ran 400 pages in length, during the trial and had no more than two weeks to respond.

“We needed to tool up and decommission people on a regular basis,” he says, adding that many lawyers had to be pulled off of other files to prepare modules of information for the BCE case, which the trial team had to condense.

The tight timelines continued at the Quebec Court of Appeal, which also expedited the case. That stage was the easiest, he says, because lawyers at least had two or three weeks to focus solely on preparing their factums.

The Supreme Court, where they had three days to deliver their factum, was “the biggest challenge of all,” says Koehnen.

“When you have a $52-billion transaction - the biggest corporate transaction in Canadian history - and you have three days to do a factum, that’s pretty tough,” he says.

Oral arguments at the Supreme Court also posed challenges, says Koehnen. Commercial cases like BCE usually involve many “complex, nuanced issues,” but while he had a full day of argument before the appeal court, Koehnen had 30 minutes at the SCC.

“No matter how effective an advocate you are, to compress a transaction of this complexity and nuance to 30 minutes . . . it poses huge challenges on everyone: on council, and certainly on the judges as well,” he says.

BCE Inc. lawyer Guy Du Pont, of Davies Ward Phillips & Vineberg LLP in Montreal, declined Law Times’ request for an interview regarding the case.

Raynold Langlois of Langlois Kronström Desjardins, who represented intervener shareholder Matthew Stewart, was called into the case after Stewart’s original firm, McCarthy Tétrault LLP, withdrew due to a conflict.

Langlois is a veteran Supreme Court lawyer, having first appeared before it in 1965, and notably as a federal government lawyer during constitutional battles of the 1980s. That experience was vital on the BCE case, as he had just 24 hours to prepare a 15-page factum to the Supreme Court.

Despite the time constraints faced by the court and lawyers, he says the quality of arguments and the court’s decision won’t suffer, even with one of the most important cases the court has handled being dealt with on one of the tightest schedules.

Christian Tacit, a Kanata sole practitioner who acted for intervener Catalyst Asset Management Inc., praised the court for its ability to adapt. “Kudos to the court for paying attention to this in this manner, and making it work on such a tight time frame,” says Tacit, who gave oral arguments to the top court for the first time in this case. “They’re not geared up for this pace normally, so I’m sure they’ve been stretched too.”

While the top court undoubtedly had to alter many of its usual protocols for the case, Copeland notes it has encountered several other expedited cases over the years.

She says a recent example is  R. v. CBC , in which leave was filed on Oct. 17, 2007, and dismissed on Nov. 2, 2007.  The CBC tried to have a publication ban quashed.

Many expedited leave applications aren’t granted, says Copeland,  adding appeals don’t tend to be fast-tracked as quickly. She cites as a “very expedited” appeal the Tremblay v. Daigle case. There, a leave application was filed on July 27, 1989, and the court rendered a decision on Aug. 8, 1989. In that case, a man sought an order preventing his estranged girlfriend from having an abortion.

Koehnen, meanwhile, says his life outside work essentially stopped for the BCE case. He plans to go on vacation next week, “someplace quiet where I can just sit and lie on a beach and do nothing else.”

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