“Section 190 of the Alberta Business Corporations Act provides that:

A sale, lease or exchange of all or substantially all the property of a corporation other than in the ordinary course of business of the corporation requires the approval of the shareholders…”

A sale of ZEL or all of its property would not be ordinary course of business and it would totally change the company’s business and reason for existence. It would become a holding company rather than an active biotech.

“On the other hand, some Courts have required shareholder approval where less than 75% of the value of a business is sold.  In those cases, all of the operating assets were sold, effectively changing the company from an operating company to a holding company.

So the key test applied by Courts when determining what constitutes “substantially all” of a corporation’s assets is the “qualitative test”:

1.   Will the sale of the assets in question fundamentally change the corporation’s core business?

2.   Is the transaction out of the ordinary such that it will substantially affect the company’s purpose and existence?”

It appears that shareholder approval would be necessary as it would totally change the company core business from a biotech to a holding company that has not much more purpose than to hold the RPFs. They could sell some individual portions but not all of ZEL.

KBC – You are correct that nobody but ZCC owns any shares in ZEL. It is a wholly owned subsidiary of ZCC. We collectively own the assets of ZEL through our ownership of ZCC. Collectively being the operative word.