CERF Incorporated

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption granted to the successor issuer from the requirement to file a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the filing of a preliminary short form prospectus -- the filer became the successor issuer to a limited partnership reporting issuer in an internal reorganization pursuant to which business operations of the limited partnership would be conducted through a corporate entity on a go-forward basis, being the successor issuer -- the arrangement did not involve the acquisition of any additional interest in any operating assets or the disposition of any of the limited partnership's existing interest in operating assets.

Exemption granted to a successor issuer from the requirement to deliver personal information forms for individuals for whom the limited partnership previously delivered personal information forms.

Applicable Legislative Provisions

National Instrument 44-101 Short Form Prospectus Distributions, s. 8.1.

Citation: CERF Incorporated, Re, 2012 ABASC 103

March 15, 2012

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA AND ONTARIO
(the Jurisdictions)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
CERF INCORPORATED
(the Filer or CERF Inc.)
DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting CERF Inc. (the corporate entity resulting from the plan of arrangement (the Arrangement) under the Business Corporations Act (Alberta) involving Canadian Equipment Rental Fund Limited Partnership (CERF LP), CERF GP Corp. (the General Partner), which was the general partner of CERF LP, and CERF Inc.), from:

(a) the requirement under section 2.8 of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) to file a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the filing of its first preliminary short form prospectus after the notice (the Prospectus Relief); and

(b) the requirement under subsection 4.1(b) of NI 44-101 for CERF Inc. to file a Personal Information Form and Authorization to Collect, Use and Disclose Personal Information in the form attached as Appendix A to National Instrument 41-101 General Prospectus Requirements (NI 41-101) for each director and executive officers of CERF Inc. at the time of filing a preliminary short form prospectus for whom CERF LP has previously delivered any of the documents described in subsections 4.1(b)(i)(E) through (G) of NI 44-101 at the time of filing such preliminary short-form prospectus (the PIF Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this Application;

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan and Manitoba; and

(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions or MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filer:

CERF LP, THE GENERAL PARTNER AND CERF INC.

CERF LP AND THE GENERAL PARTNER

1. Prior to the Arrangement, the General Partner was a corporation incorporated on January 11, 2005 pursuant to the provisions of the ABCA. The principal office of the General Partner were located in Calgary, Alberta. The General Partner was the general partner of CERF LP since CERF LP was formed in 2005 and did not carry on any business or conduct any operations since its incorporation other than as the general partner of CERF LP. The General Partner was not a "reporting issuer", as that term is defined in applicable securities legislation, in any province or territory of Canada.

2. Prior to the Arrangement, CERF LP was a limited partnership formed under the Partnership Act, R.S.A. 2000, c. P-3, as amended, by a limited partnership agreement dated January 21, 2005, as amended on November 29, 2007 and September 21, 2010, among the General Partner, Wayne S. Wadley, as initial limited partner, and the holders of the limited partnership units (Unitholders) of CERF LP (collectively, the Partnership Agreement). The principal office of CERF LP were located in Edmonton, Alberta.

3. Prior to the Arrangement, CERF LP was a "reporting issuer", as that term is defined in applicable securities legislation, in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba and Ontario. Prior to the Arrangement, the CERF LP limited partnership units (LP Units) were listed and posted for trading on the TSXV under the symbol "CFL.UN". The LP Units have not been listed or posted for trading on any exchange or quotation and trade reporting systems since the Arrangement.

4. CERF LP filed an "AIF" and had "current annual financial statements" (as such terms are defined in NI 44-101) for the financial year ended December 31, 2010.

5. CERF LP and CERF GP were dissolved on October 1, 2011 pursuant to the Arrangement.

CERF INC.

6. CERF Inc. is a corporation incorporated under the laws of the Province of Alberta. The principal office of CERF Inc. is located in Calgary, Alberta.

7. CERF Inc. was incorporated solely to participate in the Arrangement, including to issue common shares in the capital of CERF Inc. (the Shares) to former Unitholders, as a result of which the former Unitholders now hold Shares.

8. CERF Inc. is a "successor issuer" to CERF LP, as that term is defined in NI 44-101.

9. The authorized capital of CERF Inc. includes an unlimited number of common shares in the capital of CERF Inc. As at January 31, 2012, there were 9,665,256 Shares outstanding.

10. CERF Inc. is a "reporting issuer", as that term is defined in applicable securities legislation, in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba and Ontario. CERF Inc. is not in default of securities legislation in any jurisdiction of Canada.

11. The Shares are listed and posted for trading on the TSX Venture Exchange (TSXV) under the symbol "CFL".

ARRANGEMENT

12. Pursuant to the Arrangement: (i) Shares have been distributed to Unitholders on a one-for-one basis; (ii) CERF Inc. owns, directly or indirectly, all of the previously-existing assets and has assumed all of the previously-existing liabilities of CERF LP, effectively resulting in the internal reorganization of CERF LP's limited partnership structure into a corporate structure; (iii) the LP Units have been cancelled; and (iv) CERF LP has been dissolved.

13. The Arrangement was completed on October 1, 2011 and therefore currently: (i) the sole business of CERF Inc. is the previous business of CERF LP; (ii) CERF Inc. is a reporting issuer or the equivalent under the securities legislation in Alberta, British Columbia, Saskatchewan, Manitoba and Ontario; and (iii) the Shares are listed on the TSXV.

14. The Arrangement did not involve the acquisition of any additional operating assets or the disposition of any existing operating assets and did not result in a change in the ultimate beneficial ownership of the assets and liabilities of CERF LP. The Arrangement was an internal reorganization undertaken without dilution to the Unitholders or additional debt or interest expense.

15. Pursuant to CERF LP's constating documents and applicable securities laws, Unitholders were required to approve the Arrangement at a special meeting (the CERF LP Meeting) of Unitholders. The CERF LP Meeting was held on September 29, 2011 at 3:00pm (Calgary time) to consider the Arrangement. The Arrangement was approved by 99.86% of the votes cast by Unitholders at the CERF LP Meeting.

16. The Arrangement was a "restructuring transaction" under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) in respect of CERF LP and therefore required compliance with section 14.2 of Form 51-102F5 Information Circular (the Circular Form).

17. The Arrangement was being undertaken to reorganize CERF LP following the enactment by the federal government of rules in respect of the tax treatment of specified investment flow-through partnerships. Pursuant to the Arrangement, CERF LP has been reorganized into a public growth oriented equipment rental and waste management corporation that will retain the name "CERF Incorporated" and owns, directly or indirectly, all of the existing assets and has assumed all of the existing liabilities of CERF LP.

18. The rights of Unitholders in respect of CERF Inc. following the Arrangement are substantively equivalent to the rights that the Unitholders had in respect of CERF LP, and their relative interest in and to the business carried on by CERF Inc. was not affected by the Arrangement.

19. The only securities that were distributed to Unitholders pursuant to the Arrangement were the Shares.

20. The financial statements of the Filer following completion of the Arrangement are substantially and materially the same as the consolidated financial statements of CERF LP filed in accordance with Part 4 of NI 51-102 prior to completion of the Arrangement because the financial position of the entity that exists both before and after the Arrangement is substantially the same.

EXEMPTIVE RELIEF SOUGHT

Prospectus Relief

21. Subsection 2.7(2) of NI 44-101 contains an exemption for successor issuers from the qualification criteria for short form prospectus eligibility contained in subsection 2.2(d) of NI 44-101 if an information circular relating to the restructuring transaction that resulted in the successor issuer was filed by the successor issuer or an issuer that was a party to the restructuring transaction, and such information circular (i) complied with applicable securities legislation and, (ii) included disclosure in accordance with item 14.2 or 14.5 of the Circular Form of the successor issuer.

22. CERF Inc. is a "successor issuer" (as such term is defined in NI 44-101) as a result of the Arrangement (which, as represented above, was a restructuring transaction). An information circular relating to the Arrangement (the Circular) was filed by CERF LP on September 2, 2011. The Circular complies with applicable securities legislation and the Circular includes the disclosure required by item 14.2 of the Circular Form.

23. CERF LP was previously qualified to file a prospectus in the form of a short form prospectus pursuant to section 2.2 of NI 44-101 and is deemed to have filed a notice of intention to be qualified to file a short form prospectus under section 2.8(4) of NI 44-101.

24. CERF Inc. anticipates that it may wish to file a preliminary short form prospectus, relating to the offering or potential offering of securities (including common shares, debt securities or subscription receipts) of CERF Inc.

25. Pursuant to the qualification criteria set forth in section 2.2 of NI 44-101 and the exemption provided in subsection 2.7(2) of NI 44-101, CERF Inc. is qualified to file a short form prospectus pursuant to NI 44-101.

26. Notwithstanding section 2.2 of NI 44-101, section 2.8(1) of NI 44-101 provides that an issuer is not qualified to file a short form prospectus unless it has filed a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the issuer filing its first preliminary short form prospectus.

27. In anticipation of the filing of a preliminary short form prospectus, CERF Inc. intends to file a notice of intention to be qualified to file a short form prospectus (the Notice of Intention). In the absence of the Prospectus Relief, CERF Inc. will not be qualified to file a preliminary short form prospectus until 10 business days from the date upon which the Notice of Intention is filed.

28. The short form prospectus of CERF Inc. will incorporate by reference the documents that would be required to be incorporated by reference under item 11 of Form 44-101F1 in a short form prospectus of CERF LP.

PIF Relief

29. Prior to November 26, 2010, the date of the most recently filed preliminary short form prospectus by CERF LP, CERF LP had previously delivered the documents described in subsections 4.1(b)(i)(E) through (G) of NI 44-101 for each individual acting in the capacity of director or executive officer of the General Partner at such time (the CERF LP PIFS).

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that:

(a) the Prospectus Relief is granted, provided that:

(i) at the time CERF Inc. files its Notice of Intention, CERF Inc. meets the requirements of section 2.2 of NI 44-101, as modified by subsection 2.7(2) of NI 44-101 if subparagraph (a)(ii) applies; and

(ii) if any short form prospectus is filed by CERF Inc. before the earlier of the following two dates, such prospectus incorporates by reference the unaudited comparative interim financial statements of CERF LP for the three and nine months ended September 30, 2011, together with the accompanying management's discussion and analysis of CERF LP:

A. the date of filing by CERF Inc. of its audited annual comparative financial statements and the accompanying management's discussion and analysis and for the year ended December 31, 2011, and its AIF for the year ended December 31, 2011; and

B. the date that is 90 days following December 31, 2011; and

(b) the PIF Relief is granted, provided that:

(i) each individual:

A. for whom the Filer has previously delivered a CERF LP PIF; and

B. who is a director or executive officer of CERF Inc. at the time of a prospectus filing by CERF Inc.:

authorizes the Decision Makers, in respect of a prospectus filing by CERF Inc., to collect, use and disclose the personal information that was previously provided in the CERF LP PIF;

(ii) at any time of CERF Inc.'s prospectus filing, the Filer delivers to the Decision Makers an authorization of indirect collection, use and disclosure of personal information, substantially in the form of authorization attached as Appendix A;

(iii) CERF Inc., if requested by a Decision Maker, promptly delivers such further information from each individual referred to in clause (A) above as the Decision Maker may require; and

(iv) the PIF Relief will terminate in any jurisdiction in which the decision is in effect on the effective date of any change to subsection 4.1(b)(i) of NI 44-101.

"Blaine Young"
Associate Director, Corporate Finance
Alberta Securities Commission

 

APPENDIX A

AUTHORIZATION OF INDIRECT COLLECTION, USE AND DISCLOSURE OF PERSONAL INFORMATION

The Personal Information Forms in respect of the individuals listed in attached Schedule 1, which were filed by Canadian Equipment Rental Fund Limited Partnership (the LP) with provincial securities regulators in Canada on November 26, 2010 (the LP Filings), contain personal information concerning each individual acting in the capacity of director or executive officer of the LP (the Personal Information), as required by securities legislation in respect of a prospectus filing by the LP.

CERF Incorporated (the Issuer) hereby confirms that each individual listed on Schedule 1:

(a) is a director or executive officer of the Issuer;

(b) has consented to the use of the Personal Information (previously provided in the LP Filing) pertaining to that individual, in respect of an anticipated prospectus filing by the Issuer;

(c) has been notified by the Issuer:

(i) that the Personal Information is being collected indirectly by the regulator under the authority granted to it by provincial securities legislation or provincial legislation relating to documents held by public bodies and the protection of personal information;

(ii) that the Personal Information is being collected and used for the purpose of enabling the regulator to administer and enforce provincial securities legislation, including those obligations that require or permit the regulator to refuse to issue a receipt for a prospectus if it appears to the regulator that the past conduct of management or promoters of the Issuer affords reasonable grounds for belief that the business of the Issuer will not be conducted with integrity and in the best interests of its security holders; and

(iii) of the contact, business address and business telephone number of the regulator in the local jurisdiction as set out in the attached Schedule 2, who can answer questions about the regulator's indirect collection of the Personal Information; and

(d) has authorized the indirect collection, use and disclosure of the Personal Information by the regulators as described in Schedule 2, in respect of a prospectus filing by the Issuer.

 

SCHEDULE 1

LIST OF DIRECTORS AND OFFICERS OF CERF INCORPORATED

WHO FILED PERSONAL INFORMATION FORMS ON NOVEMBER 26, 2010

Mr. Wayne Wadley;

Mr. Ken Stephens;

Mr. William C. Guinan;

Mr. John Koop;

Mr. Gary Layden; and

Mr. Marc Mandin.

 

SCHEDULE 2

LIST OF REGULATORS

Local Jurisdiction
Regulator
 
Alberta
Securities Review Officer
Alberta Securities Commission
Suite 400
300 -- 5th Avenue S.W
Calgary, Alberta T2P 3C4
Telephone: (403) 297-6454
www.albertasecurities.com
 
British Columbia
Review Officer
British Columbia Securities Commission
P.O. Box 10142 Pacific Centre
701 West Georgia Street
Vancouver, British Columbia V7Y 1L2
Telephone: (604) 899-6854
Toll Free within British Columbia and Alberta: (800) 373- 6393
www.bcsc.bc.ca
 
Manitoba
Director, Corporate Finance
The Manitoba Securities Commission
500 -- 400 St. Mary Avenue
Winnipeg, Manitoba R3C 4K5
Telephone: (204) 945-2548
www.msc.gov.mb.ca
 
New Brunswick
Director Corporate Finance and Chief Financial Officer
New Brunswick Securities Commission
85 Charlotte Street, Suite 300
Saint John, New Brunswick E2L 2J2
Telephone: (506) 658-3060
Fax: (506) 658-3059
 
Newfoundland and Labrador
Director of Securities
Department of Government Services and Lands
P.O. Box 8700
West Block, 2nd Floor, Confederation Building
St. John's, Newfoundland A1B 4J6
Telephone: (709) 729-4189
www.gov.nf.ca/gsl/cca/s
 
Northwest Territories
Securities Registries
Department of Justice
Government of the Northwest Territories
P.O. Box 1320,
Yellowknife, Northwest Territories X1A 2L9
Telephone: (867) 873- 7490 www.justice.gov.nt.ca/SecuritiesRegistry/SecuritiesRegistry.html
 
Nova Scotia
Deputy Director, Compliance and Enforcement
Nova Scotia Securities Commission
P.O. Box 458
Halifax, Nova Scotia B3J 2P8
Telephone: (902) 424-5354
www.gov.ns.ca/nssc
 
Nunavut
Government of Nunavut
Legal Registries Division
P.O. Box 1000 -- Station 570
Iqaluit, Nunavut X0A 0H0
Telephone: (867) 975-6590
 
Ontario
Administrative Assistant to the Director of Corporate Finance
Ontario Securities Commission
19th Floor, 20 Queen Street West
Toronto, Ontario M5H 2S8
Telephone: (416) 597-0681
www.osc.gov.on.ca
 
Prince Edward Island
Deputy Registrar, Securities Division
Shaw Building
95 Rochford Street, P.O. Box 2000, 4th Floor
Charlottetown, Prince Edward Island C1A 7N8
Telephone: (902) 368-4550
www.gov.pe.ca/securities
 
Québec
Autorité des marchés financiers
Stock Exchange Tower
P.O. Box 246, 22nd Floor
800 Victoria Square
Montréal, Québec H4Z 1G3
Attention: Responsable de l'accès à l'information
Telephone: (514) 395-0337
Toll Free in Québec: (877) 525-0337
www.lautorite.qc.ca
 
Saskatchewan
Director
Saskatchewan Financial Services Commission
Suite 601, 1919 Saskatchewan Drive
Regina, Saskatchewan S4P 4H2
Telephone: (306) 787-5842
www.sfsc.gov.sk.ca
 
Yukon
Registrar of Securities
Department of Justice
Andrew A. Philipsen Law Centre
2130 -- 2nd Avenue, 3rd Floor
Whitehorse, Yukon Territory Y1A 5H6
Telephone: (867) 667-5005