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Business Law

Shibley Righton LLP has a long standing reputation for its results-oriented advice to business clients. That tradition continues today, with a focused team of professionals long on knowledge, legal and business experience, and particularly strong on reacting quickly and creatively to solve client issues. We strive to deliver legal services on a basis that emphasizes our team approach to bring together the skills required for each particular transaction in a manner that minimizes costs.

Our business law team carries on a full-service practice, including:

  • financing encompassing everything from conventional debt, equity and asset-based lending to custom structures such as limited partnerships, leasing and trusts;
  • domestic and international mergers, acquisitions and divestitures;
  • planning and implementation of simple and complex corporate reorganizations,
  • domestic, cross-border and international distributorships, licensing, joint ventures, and other strategic relationships;
  • commercial agreements, including purchase and sale of goods, provision and acquisition of services, delivery and transportation, research;
  • corporate governance and management, including building and advising boards of directors, directors and officers liability and insurance, meetings and other statutory compliance;
  • formation of domestic and international corporations, partnerships and trusts;
  • securities law, particularly relating to junior public companies;
  • shareholders' and partnership agreements, relationships, and disputes including creative settlement approaches, divisive reorganizations, and corporate divorce;
  • franchising agreements, planning, and disputes;
  • entertainment law, including recording artist agreements, producer agreements, management agreements, publishing agreements and the development and marketing of entertainment;
  • intellectual property law including trade-mark and copyright applications, trade-mark oppositions and intellectual property licensing; and
  • not-for-profit and charitable corporations.

While our business law team is well known for its work with small and medium-sized enterprises, as well as its expertise relating to private and junior public companies, it also acts for larger and multinational companies and governmental agencies. In addition, our business law team regularly acts as local counsel for non-Canadian law firms whose clients are carrying out transactions in Canada or need Canadian legal advice.

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Publications

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Laura Stairs Head ShotDue diligence by a prospective buyer of a business could prevent serious problems in the future, Windsor corporate lawyer Laura Stairs tells AdvocateDaily.com.

Stairs, an associate with Shibley Righton LLP, advises clients that the first step in avoiding pitfalls is to get a copy of the corporate record of the target firm.

"We want to ensure the person the client is dealing with has the authority to make agreements and decisions with respect to the corporation," she says.

"The next thing we look at are the financial statements," Stairs says. "We want to know if this business is profitable, look at the liabilities and debts that are out there and determine whether it's worth investing in."

She says she encourages clients not to enter into any share purchase agreement before having an opportunity to review these types of documents.

"Instead, we often advise them to enter into a Letter of Intent," Stairs says. "This is a document that sets out the general terms, but it is not binding on the parties.

"You want to make sure that it specifically says it is a non-binding agreement, but it allows the potential buyer to undertake a due diligence review," she says. "As a seller, you would want to include a provision in the Letter of Intent that is binding, confirming that any information shared with the potential purchaser is confidential and won't be distributed or used outside the document's terms."

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-11-28
Description

peter murphy headshotIn the final instalment of a two-part series, Toronto business lawyer Peter Murphy discusses the unique issues facing landlords of cannabis stores.

Landlords should seek legal advice when negotiating leases with prospective cannabis retailers, Toronto business lawyer Peter Murphy tells AdvocateDaily.com

Murphy, partner with Shibley Righton LLP, explains that prospective cannabis retailers in Ontario are rushing to secure leases long before they are licensed due to the timing of the provincial government’s framework for selling the drug in shops across the province.

“We’re in a new gold rush,” Murphy says, adding the Cannabis Licence Act (CLA) opened up opportunities for a multitude of players in the bricks-and-mortar retail market after Premier Doug Ford's new administration abandoned the former Liberal government’s plans for a provincial monopoly over recreational cannabis sales.

“Prospective cannabis retailers want to secure leases to lock up the best locations in Ontario now so that they’re in a good position when retail licensing begins,” he says.

However, Murphy says landlords are at risk of leasing their space to a prospective cannabis retailer who might not have a viable business by the time the market finally starts in 2019.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-11-26
Description

Marlin Horst head shotSandbagging reflects poorly on all parties to a transaction, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

Horst, a partner with Shibley Righton LLP, explains that the practice arises in mergers and acquisitions when a buyer becomes aware that the seller will be unable to meet all the representations and warranties made in the agreement.

That allows the purchaser to close the deal with the intention of later suing the vendor in court for damages related to the known deficiencies since contracts normally provide indemnities for buyers in the event promises can’t be met.

Horst says examples of sandbagging are relatively rare in Canada, but the issue is growing as parties on both sides take the risk of an episode into consideration when completing transactions. Nevertheless, he says the trend is concerning.

“If vendors are making representations and warranties that are not correct, then it means they’re not doing their own internal due diligence properly,” Horst says. “If the buyer discovers something that the vendor itself doesn’t know, it shows a lack of knowledge about their own business.”

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story
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Date_Published
2018-06-19
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Joel Berkovitz Head ShotThe “long and twisting saga” that pits South American villagers against a global oil giant took another turn recently in a Canadian courtroom, Toronto business lawyer Joel Berkovitz tells The Lawyer’s Daily.

“At its core,” explains Berkovitz, a lawyer with Shibley Righton LLP, “this case is about attempts to enforce a US$9.5 billion judgment in Canada which was obtained in Ecuador against the U.S. company … A New York court declined to enforce this judgment in the United States, finding that the Ecuadorian judgment was obtained by fraud.”

In a previous post with AdvocateDaily.com, Berkovitz said the case began in 1993, after roughly 30,000 Ecuadorian villagers alleged that an oil company dumped billions of litres of toxic oil-drilling byproducts into the environment. They alleged the toxins caused increased health problems, including more frequent cancer deaths and a higher rate of miscarriages.

In a 2011 decision, Ecuadorian courts ordered the company to pay the villagers US$9.5 billion. Since the company didn’t have assets in Ecuador, the plaintiffs looked elsewhere to collect on the judgment. They tried in the U.S., but the judge found there had been extensive acts of fraud, bribery, forgery, intimidation and collusion in the Ecuadorian proceedings. 

The plaintiffs then sought to seize the shares of the company’s Canadian subsidiary — a seventh-level subsidiary of the American company — by piercing the Canadian company’s “corporate veil so that its shares and assets would be available to satisfy the judgment against its parent,” writes Berkovitz.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-06-19
Description

Bill Northcote Head ShotAn American court has ruled there can't be any monkey business involved in the country's copyright laws, says Toronto business lawyer Bill Northcote.

The U.S. Court of Appeals for the 9th Circuit recently found that American copyright laws do not allow a monkey to hold copyrights, says Northcote, chair of Shibley Righton LLP's business law group. 

"From a copyright perspective, the most important point in the case is that the monkey doesn't have statutory standing," Northcote says. In other words, copyright law only covers humans.

The two sides battling over the photos reached a settlement in September and asked the 9th Circuit to dismiss the case and throw out a lower court ruling in favour of the photographer whose camera was used to take the photographs, according to an Associated Press story. 

"The decision really says they want the litigation to proceed," Northcote tells AdvocateDaily.com.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-05-03
Description

Bill Northcote Head ShotA large chain of taco restaurants will have a tough time trying to keep others from using “Taco Tuesday,” Toronto business lawyer Bill Northcote tells Metro News.

Claiming it has a trademark on the phrase, the fast-food giant recently told a Calgary taco restaurant to stop using it to advertise its weekly half-priced specials, says the publication.

Northcote, chair of Shibley Righton LLP’s business law group, says the fast-food giant doesn't actually have a registered trademark on “Taco Tuesday” — just the Tuesday part.

“The word taco was disclaimed because it is descriptive of the services (selling tacos),” he says.

According to the report, the chain trademarked “Taco Tuesday” in 1997. The company sent a cease-and-desist letter to the Calgary restaurant last Friday, demanding they stop using the slogan. The company plans to comply, says the report.

Northcote and other trademark lawyers say there’s a good chance the chain wouldn’t win if a legal challenge were to be launched.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-02-16
Description

Bill Northcote Head ShotThe Federal Court of Appeal (FCA) “got it right” in resolving the issue of trademark confusion in a case involving a Canadian luggage company and a Swiss firm, Toronto business lawyer Bill Northcote tells The Lawyer’s Daily.

As the article notes, the FCA ruled that several of the Canadian company’s logos would be “likely to cause confusion” with the trademark of the Swiss company, which specializes in goods marked with a symbol resembling the cross on the Swiss flag.

“To me, there is a likelihood of confusion to the casual observer, which is, of course, the test,” says Northcote, chair of Shibley Righton LLP’s business law group.

“I can understand why [the Swiss company] pursued this, because [the Canadian company] was infringing on their mark and attempting to appropriate part of the goodwill associated with it.”

In an earlier decision, a Federal Court trial judge ruled there was a lack of resemblance between the marks that was not likely to confuse consumers and thus no “passing off” of the Canadian company’s bags as the Swiss company’s product.

As The Lawyer’s Daily reports, the decision was appealed, with the Swiss company arguing that the judge erred in concluding there was no likelihood of confusion and no passing off. The FCA agreed unanimously, saying the Canadian company’s marks would likely cause confusion with the Swiss product in the “mind of a casual consumer in somewhat of a hurry … [and] does not pause to give the matter any detailed consideration or scrutiny.”

This is an excerpt from an article that appeard on AdvocateDaily.com.

Please click here to read the full story.

Date_Published
2017-11-28
Description

The fight over the ownership of a monkey selfie could soon be resolved as the parties pursue an out-of-court settlement, says Toronto business lawyer Bill Northcote.

“That could leave some of the legal issues unresolved, but to most copyright lawyers, even without litigation, this was a settled point,” says Northcote, chair of Shibley Righton LLP’s business law group.

“The trial court already decided that copyright cannot be owned by an animal,” he tells AdvocateDaily.com. “That decision will be persuasive, although not binding, on another trial court hearing.”

But if the appeal court had heard the case to completion, the decision would be binding on other American trial courts and would be persuasive in some other jurisdictions. Northcote suspects PETA (People for the Ethical Treatment of Animals) was afraid it wouldn’t win.

This is an excerpt from an article that appeared on AdvocateDaily.com.  To read the complete story please click here.

Date_Published
2017-08-24
Description

On June 7, the federal government announced that it is suspending the implementation of the private right of action under Canada’s anti-spam legislation (CASL). The move was in response to concerns raised by Canadian businesses, charities and the not-for-profit sector.

The suspended provisions of CASL were scheduled to come into force on July 1, 2017 and would have allowed any interested person to file lawsuits for alleged violations of the legislation.

The government has not stated how long this indefinite suspension will last. The legislation will be submitted to a parliamentary committee for review.

This is an excerpt from a article that appeared on AdvoacteDaiy.com.  Please click here to read the complete story.

Date_Published
2017-06-26
Description

A recent decision in small claims court makes it clear that paralegals must leave lien work to lawyers, says Toronto business lawyer Joel Berkovitz.

“This case is significant because it recognizes that paralegals cannot and should not register or discharge condo liens,” says Berkovitz, a lawyer with Shibley Righton LLP.

The case began when the plaintiff missed an assessment notice from her condominium corporation and failed to pay by the deadline, he tells AdvocateDaily.com. The corporation then registered a lien against her property and charged her for the legal fees.

The plaintiff, a paralegal herself, knew that registering and discharging a lien falls outside of a paralegal’s authorized area of practice and that the condo management company couldn't then collect legal fees for the work, explains Berkovitz.

The condo owner paid the entire amount, then launched the small claims action to recoup the legal fees.

This is an excerpt from an article that appeared on AdvocateDaily.com.  To read the full story please click here.

Date_Published
2017-06-08
Description

A new government-backed capital fund is a good opportunity for underserved small and medium-sized businesses to get access to expertise as well as cash, says Toronto corporate and commercial lawyer Marlin Horst.

A number of financial institutions, including the country’s biggest banks, have teamed up to create the Canadian Business Growth Fund, which aims to make available up to $500 million over the next year to help smaller companies grow. If it takes off, the fund will double in size over the following nine years.

The fund’s sponsors have also promised to provide advice and mentorship to businesses so that they can reach their potential.  

Horst, a partner in the Toronto office of Shibley Righton LLP, says a large swath of early stage Canadian businesses are caught in the gap between angel investment funding — unavailable to all but a select few — and the public markets, which tend to be a viable option only for larger, more established companies.

This article appeared on AdvocateDaily.com.  Please click here for the complete story.

Date_Published
2017-04-24
Description

Canadian subsidiaries can rest easier after the Ontario Superior Court ruled that Chevron Canada can’t be held financially liable for a judgment against its American parent company, says Toronto business lawyer Joel Berkovitz.

“This was a case about whether the assets of a subsidiary can be seized to satisfy a judgment against the parent company and the court here conclusively said, ‘No,’” says Berkovitz, a lawyer with Shibley Righton LLP.

In Yaiguaje v. Chevron Corporation, 2017 ONSC 135 (CanLII), the court ruled that Chevron Canada is a separate entity from the Chevron Corp. and, therefore, not responsible for any judgments against the parent company.

The Chevron case began in 1993, after roughly 30,000 Ecuadorian villagers alleged that Texaco, now owned by Chevron, dumped billions of litres of toxic oil-drilling byproducts into the environment. They alleged the toxins caused increased health problems, including more frequent cancer deaths and a higher rate of miscarriages.

In a 2011 decision, Ecuadorian courts ordered Chevron to pay the villagers US$9.5 billion. But Judge Lewis Kaplan of the United States District Court for the Southern District of New York found, following a seven-week trial, that there were extensive acts of fraud, bribery, forgery, intimidation and collusion in the Ecuadorian proceedings. Chevron has refused to pay the Ecuadorian judgment.

This article appeared on AdvocateDaily.com.  Please click here to read the complete story.

Date_Published
2017-03-29
Description

It is not unusual for law firms to negotiate split-fee agreements that account for lawyers moving on after they have worked on contingency fee matters, Toronto business lawyer Bill Northcote tells Law Times.

“Some firms have got very elaborate compensation systems that reflect the division of an award,” says Northcote, chair of Shibley Righton LLP’s business law practice group.

“Usually, they’re worked out internally without much public scrutiny.” 

However, as Law Times reports, one Toronto litigation and corporate law boutique is suing a former non-equity partner in the firm for $9 million after a dispute over a contingency fee client. The law firm alleges the lawyer breached his contract and fiduciary duty to the firm, claiming he “improperly solicited” some of its clients when he resigned in 2015, including a property development company.

The lawyer denies the claims and is demanding $1.1 million from the firm, alleging it owes him for work he did on the file, says Law Times.

Last year, the law firm also sued the property development company, seeking payment for its success at a 2014 trial. The lawyer won intervener status, asking the court to order any funds received by the firm to be paid into court for his benefit, says the article.

This article appeared on AdvocateDaily.com.  Please click here for the complete story.

Date_Published
2017-02-27
Description

Businesses should ensure their online marketing activities comply with Canada's Anti-Spam Law (CASL), says Toronto technology and business lawyer Peter Murphy. 

CASL, which applies to promotional emails, instant or text messages, and other electronic information platforms, will extend to social media communications in certain circumstances, he tells AdvocateDaily.com.

"There are exceptions, but the anti-spam provisions are for commercial messages that are sent to electronic addresses. A promotional post on a business or professional's Facebook wall would not amount to a commercial electronic message under CASL because it's not being sent to any particular recipient's electronic address,"  Murphy says. "Similarly, posting a photo on social media, liking a post or tweeting would not fall under CASL, even if done as part of a business promotion because the communications are not sent to the recipients' electronic address.  

He says CASL will apply if the social media app is used to send a promotional message to specific users' electronic addresses, provided one of the exceptions doesn't apply.

This article appeared on AdvocateDaily.com.  For the full story please click here.

Date_Published
2017-02-02
Description

The consumer backlash over LoyaltyOne’s plan to void Air Miles that are five years or older is a lesson for companies considering changes to their reward programs, says Toronto business lawyer Joel Berkovitz.

People are fiercely resistant to giving up any benefits they’ve accrued in loyalty programs and companies should expect customers to respond very negatively to any attempts to claw them back, he tells AdvocateDaily.com.

In December, a private member's bill to prevent expiry of loyalty points passed on third reading in the Ontario legislature with a vote of 77-0, and became law under the Consumer Protection Act, reports the Globe and Mail. Shortly before Bill 47 became law, LoyaltyOne announced it was backing down and would allow members to keep any Air Miles they hadn’t already used, explains Berkovitz, a lawyer with Shibley Righton LLP.

This article appeared on AdvocateDaily.com,  to read the complete story pleae click here.

Date_Published
2017-01-10
Description

Toronto technology and business lawyer Peter Murphy admits many law firms could benefit from new information technologies, but he doesn’t advise them to rush into projects without aligning them to the firm's objectives through a solid business case.

Murphy, a partner with Shibley Righton LLP, says when he started out, email was the new kid on the legal technology block. Much has changed over the last two decades, but because of the nature of their profession, lawyers often view new developments in technology with suspicion.

This story appeared on advocatedaily.com.  To read the full article please click here.

Date_Published
2016-10-19
Description

A recent Ontario Court of Appeal decision that extends the “business judgment” rule to condominiums will give condo corporations broader protection when facing legal challenges by owners, says Toronto business and condominium lawyer Joel Berkovitz.

In the past, courts have issued rulings that demonstrate deference to condo boards’ decisions, but this was one of the first that expressly applies the business judgment rule, he tells AdvocateDaily.com.

“It gives cover to the condo corporation that as long as their decisions are reasonable, the courts won’t step in to overrule their decisions,” Berkovitz says.

This article appeared on AdvocateDaily.com.  To read the full story please click here.

Date_Published
2016-10-18
Description

As it can be daunting to take on the role of repairing a dysfunctional executive team, a new CEO should start by ensuring that those in the C-suite have clear roles and responsibilities, Toronto business lawyer Bill Northcote tells Succession Planning, a special supplement published by The Bottom Line and Lawyers Weekly. 

“A lack of clarity can lead to conflict and competition. Infighting and politicking are signs of dysfunction,” says Northcote, chair of Shibley Righton LLP’s business law practice group.

“There will always be some competition,” he says, “but the role of the CEO is to get strong people to perform and co-operate" and to identify stakeholder groups and their interests to get a full understanding of how the organization works.

This article appeared on AdvocateDaily.comPlease click here to read the full story.

Date_Published
2016-09-02
Description

As law firms grow to meet client needs, they often consider joining a firm network or expanding internationally, but Toronto business lawyer Bill Northcote poses an interesting question in Lawyers Weekly: are networks and global firms competitors, or do they serve separate markets and clientele?

As Northcote, chair of Shibley Righton LLP’s business law practice group says in the article, the 18 largest law firm networks each include more than 7,000 lawyers and have members practising in 80 to 100 separate jurisdictions. The largest law firm is Dentons, which reportedly has some 7,000 lawyers in 52 jurisdictions.

While the two concepts often compete for the same business, Northcote says, there are distinct differences.

“Law firm networks are generally non-exclusive, informal, relatively inexpensive to participate in and have a modest number of staff and overhead. Within these networks there is considerable diversity in size, geographic scope, membership fees and non-legal resources available to members,” writes Northcote.

This article was published on advocatedaily.com,  please click here for the full story

Date_Published
2016-07-26
Description

Since the first law firm network was created in 1989, over 150 law firm networks have been formed and are in active operation.

Some large law firms have become “national” and “international’ by opening branches in other domestic and foreign jurisdictions and practising not just the law of their “home” jurisdiction but local law as well.

As law firms strive to fulfil client needs and compete they need to consider whether to become international or to become a member in a network. Are the networks and the international law firms competitors of each other or do they serve separate, distinct markets and clientele?

The 18 largest law firm networks generally each comprise more than 7,000 lawyers and have members practising in on average about 80 to 100 separate jurisdictions. In contrast, the largest law firm (by number of lawyers) is Dentons, which reportedly has about 7,000 lawyers in 52 jurisdictions.

Adam Cooke, the executive director of Multilaw, one of the largest networks, points out:

“Generally large international law firms seem to have extreme difficulty in expanding beyond about 50 jurisdictions. Law firm networks don’t have that problem because they are more nimble and can recognize that some jurisdictions, particularly newly industrializing countries, are importers of legal works while some, particularly the United States and the EU, are exporters of legal requirements. In a network both functions are highly valued.”

The rise of formal law firm networks mirrored the growth of international trade (and the resulting increase in international litigation) which first occurred in large business entities but which increasingly is an integral part of the businesses of small and medium sized enterprises.

These same forces have driven the diversification of large international law firms as they opened offices in new jurisdictions to meet client requirements.

Of course the two are quite different. Law firm networks are generally non-exclusive, informal, relatively inexpensive to participate in and have a modest number of staff and overhead. Within these networks there is considerable diversity in size, geographic scope, membership fees and non-legal resources available to members.

In contrast, large international law firms are exclusive and have significant overhead but can deliver a worldwide brand and a more closely integrated billing process. For many clients, particularly small and medium sized enterprises, law firm networks have more affordable legal fees and generally more ready access to senior lawyers. International law firms have the advantage of larger marketing budgets used to build brand awareness and pitch the largest of cross-border transactions.

While it is tempting to say that small and medium size enterprises gravitate to networks while large multinational corporations are serviced by international law firms, it is not so simple. Often the two compete for the same business.

Indeed, Dentons seems to have recognized the shortcomings of its business model when it announced in May the formation of Nextlaw Global Referral Network that it touts as a new form of network, one without membership fees or territorial exclusivity. Its stated goal is to recruit, vet and admit a large number of law firms as members in the next few months, clearly a very ambitious and costly goal, particularly when no application or membership fee is charged. The attraction to applicants is obvious — the possibility of referrals with no cost. Hope Krebs, Multilaw’s chair, believes that: “…this is a way for Dentons to expand its relationships with law firms in other jurisdictions. It is implicitly an acknowledgement that their growth within a single law firm structure can be difficult and not sustainable. For example the conflicts of interest that arise in a single large law firm are frequently insurmountable.”

Michael Siebold, the chair of Interlaw, another large law firm network, disputes Dentons’ focus on the negative effects of territorial exclusivity: “Our member firms are sometimes part of other referral networks — my own firm being a case in point — firstly because they are completely independent, and secondly because Interlaw is so much more than a referral network… Finally, paying membership dues covering the cost of a very lean management appears to be normal procedure, and even fully integrated international firms need to make contributions for marketing, business development, etc., and I believe Dentons follows the same model.”

The most recent trend in law firm networks is a focus on internal quality assurance programs, in part, in response to the brand equity enjoyed by the large multijurisdictional law firms.

In essence, law firm networks can flourish by providing international legal services in a cost-efficient manner to small and medium sized enterprises through reduced overhead and simpler structures, while international law firms can provide a more integrated offering (including invoices covering multiple jurisdictions) but at a greater cost due to higher hourly rates and more overhead which is less significant in only the largest international transactions and “bet the company” international litigation. Between these two extremes the two compete.

This article origionally appeared in the July 15, 2016 issue of The Lawyers Weekly published by LexisNexis CVanada Inc.

Date_Published
2016-07-13

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