Trapeze Asset Management Inc. et al. -- s. 144

Headnote

Section 144 -- Application for partial revocation of cease trade order -- Variation of cease trade order to permit certain trades for the purpose of selling securities for a nominal amount solely to establish a tax loss -- The securities were acquired prior to the respective dates of the cease trade orders -- Each of the purchasers of the securities will be sophisticated purchasers who understand that such shares have no market value, the purpose of the proposed trades and the nature of the cease trade orders -- Each of the Applicants and each of the purchasers are not aware of any material information that has not been generally disclosed -- Partial revocation granted subject to conditions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127, 144.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

(the "Act")

AND

IN THE MATTER OF

TRAPEZE ASSET MANAGEMENT INC.

AND

TRAPEZE CAPITAL CORP.

AND

ACCOUNTHOLDERS LISTED IN SCHEDULE "A"

AND

STORM CAT ENERGY CORPORATION

AND

RICHARDS OIL & GAS LIMITED

ORDER

(Section 144 of the Act)

WHEREAS on April 27, 2009, a Director of the Ontario Securities Commission (the "Commission") made an order under paragraphs 2 and 2.1 of subsection 127(1) of the Act that all trading in and all acquisitions of securities of Storm Cat Energy Corporation ("Storm Cat"), whether direct or indirect, shall cease until further order by the Director (the "Storm Cat CTO");

AND WHEREAS on May 26, 2010, a Director of the Commission made an order under paragraph 2 of subsection 127(1) of the Act that all trading in and all acquisitions of securities of Richards Oil & Gas Limited ("Richards Oil"), whether direct or indirect, shall cease until further order by the Director (the "Richards Oil CTO");

AND WHEREAS Trapeze Asset Management ("TAMI"), Trapeze Capital Corp. ("TCC") and certain accountholders listed in Schedule A (the "Accountholders") (together with TAMI and TCC, the "Applicants") have made an application pursuant to section 144 of the Act (the "Application") for a partial revocation of the Storm Cat CTO and the Richards Oil CTO to permit the sale by the Applicants of the Storm Cat Shares (as defined below) and the Richards Oil Shares (as defined below) solely for the purpose of establishing a tax loss;

AND WHEREAS National Policy 12-202 Revocation of a Compliance-related Cease Trade Order provides that the Commission will generally grant a partial revocation order to permit a securityholder to sell securities for a nominal amount solely to establish a tax loss;

AND UPON the Applicants having represented to the Commission that:

1. TAMI is an Ontario corporation and is registered as an portfolio manager, exempt market dealer and investment fund manager (pending approval) under the Act.

2. TCC is an Ontario corporation and is registered as an investment dealer under the Act.

3. TAMI holds 4,139,753 common shares of Storm Cat on behalf of managed accounts and TCC holds 779,667 common shares of Storm Cat on behalf of managed accounts (collectively, such 4,919,420 shares are referred to as the "Storm Cat Shares").

4. TAMI holds 17,857,674 common shares of Richards Oil on behalf of managed accounts and TCC holds 6,535,690 common shares of Richards Oil on behalf of managed accounts.

5. The Accountholders hold 446,560 common shares of Richards Oil (collectively the 24,839,924 common shares held by TAMI, TCC and the Accountholders are herein referred to as the "Richards Oil Shares").

6. The Storm Cat CTO was made by the Commission because Storm Cat failed to file the following continuous disclosure materials as required by Ontario securities law:

(a) audited annual financial statements for the year ended December 31, 2008;

(b) management's discussion and analysis relating to the audited annual financial statements for the year ended December 31, 2008;

(c) annual information form for the year ended December 31, 2008.

7. The Richards Oil CTO was made by the Commission because Richards Oil failed to file the following continuous disclosure materials as required by Ontario securities law:

(a) audited annual financial statements for the year ended December 31, 2009;

(b) management's discussion and analysis relating to the audited annual financial statements for the year ended December 31, 2009;

(c) certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.

8. The Storm Cat Shares and the Richards Oil Shares were acquired prior to the respective dates of the Storm Cat CTO and the Richards Oil CTO.

9. TAMI and TCC will effect the proposed trades of the Storm Cat Shares (the "Storm Cat Disposition") solely for the purpose of enabling them to establish a tax loss in respect of such Storm Cat Disposition.

10. TAMI, TCC and the Accountholders will effect the proposed trades of the Richards Oil Shares (the "Richards Oil Disposition") solely for the purpose of enabling them to establish a tax loss in respect of such Richards Oil Disposition.

11. It is intended that the Storm Cat Shares and the Richards Oil Shares will be sold at a price of $0.00001 per share for aggregate proceeds of $49.19 and $248.40, respectively, solely for the purpose of establishing tax losses.

12. Each of the purchasers of the Storm Cat Shares and the Richards Oil Shares will be sophisticated purchasers who understand that such shares have no market value, the purpose of the proposed trades and the nature of the Storm Cat CTO and the Richards Oil CTO.

13. Each of the Applicants has acknowledged that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

14. Each of the Applicants and each of the purchasers are not aware of any material information concerning the affairs of Storm Cat or Richards Oil that has not been generally disclosed.

15. Each of the purchasers will purchase and hold the Storm Cat Shares and/or the Richards Oil Shares, as the case may be, as principal.

16. Each purchaser of the Storm Cat Shares and the Richards Oil Shares will be provided with a copy of the Storm Cat CTO and/or the Richards Oil CTO, as the case may be, and a copy of this Order prior to the Storm Cat Disposition and the Richards Oil Disposition.

AND WHEREAS considering the Application and the recommendation of the staff of the Commission;

AND WHEREAS the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 144 of the Act, that the Storm Cat CTO and the Richards Oil CTO be partially revoked solely to permit the Storm Cat Disposition and the Richards Oil Disposition provided that:

1. Prior to the completion of the Storm Cat Disposition and the Richards Oil Disposition, each purchaser of the Storm Cat Shares and the Richards Oil Shares will:

(a) receive:

(i) a copy of the Storm Cat CTO and/or the Richards Oil CTO, as the case may be; and

(ii) a copy of this Order;

(b) provide the Applicants with signed and dated acknowledgements which clearly state that the Storm Cat CTO and the Richards Oil CTO remains in effect, and that the issuance of a partial revocation of a cease trade order does not guarantee the issuance of a full revocation in the future; and

2. The Applicants undertake to make available copies of the written acknowledgements referred to in paragraph 1(b) to staff of the Commission upon request.

DATED in Toronto this 15th day of December 2010.

SCHEDULE A

ACCOUNTHOLDERS