Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief in Multiple Jurisdictions -- relief from provisions of section 8.4 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) permitting filer to include alternative financial information in business acquisition report pursuant to section 13.1 of NI 51-102 -- filer will include almost two years of current audited financial information, instead of one year of audited information with the comparable period being unaudited.

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations, ss. 8.4, 13.1.

February 26, 2013


IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(THE "JURISDICTION")
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
TIMBERCREEK U.S. MULTI-RESIDENTIAL
OPPORTUNITY FUND #1
(THE "FILER" or "TIMBERCREEK")
DECISION



Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") for relief pursuant to Part 13 of National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102"), from certain requirements in Item 3 of Form 51-102F4 and Section 8.4(a)(i)(B) of Part 8 of NI 51-102 in respect of a business acquisition report ("BAR") required to be filed by the Filer in connection with a significant acquisition completed by the Filer on December 20, 2012 (the "Exemption Sought").

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

(a) The Ontario Securities Commission is the principal regulator for this application, and

(b) The Filer has provided notice that section 4.7 of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut.

Interpretation

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

Representations

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

1. The Filer is a limited partnership formed under the laws of the Province of Ontario.

2. The head office of the Filer is located in Toronto, Ontario.

3. The Filer is a reporting issuer under the securities legislation of the Jurisdictions and is not in default of its reporting issuer obligations under the securities legislation of any of the Jurisdictions.

4. The Filer is authorized to issue an unlimited number of class A limited partnership units ("Class A Units"), an unlimited number of class B limited partnership units ("Class B Units") and an unlimited number of class C limited partnership units ("Class C Units" and together with the Class A Units and Class B Units, the "Units").

5. On October 25, 2012, the Filer completed an initial public offering of 2,224,350 Class A Units pursuant to a long form prospectus dated September 28, 2012, as amended on October 17, 2012 (the "IPO"). Concurrently with the IPO, the Filer completed a private placement of 1,605,000 Class C Units.

6. The Units are not listed on any exchange.

7. On December 20, 2012, the Filer completed an acquisition of four multi-residential real estate assets located in the United States (the "Acquisition"). The Acquisition constitutes a "significant acquisition" of the Filer for purposes of Part 8 of NI 51-102, requiring the Filer to file a BAR within 75 days of the Acquisition pursuant to section 8.2(1) of NI 51-102.

8. The financial year of the acquired business ends December 31.

9. Section 8.4 of NI 51-102 requires that the Filer include in the BAR, the following annual financial statements of the acquired business:

(a) a statement of comprehensive income, a statement of changes in equity and a statement of cash flows for (i) the audited annual period ended December 31, 2011; and (ii) the annual period ended December 31, 2010;

(b) an audited statement of financial position as at December 31, 2011;

(c) a statement of financial position as at December 31, 2010; and

(d) notes to the required financial statements.

10. Section 8.4(3) requires that the Filer include financial statements for:

(a) the interim period beginning January 1, 2012 and ended September 30, 2012; and

(b) a comparable period in 2011.

11. Section 8.4(5) requires that the Filer include:

(a) a pro forma statement of financial position of the Filer as at September 30, 2012 that gives effect, as if the Acquisition had taken place as at the date of the pro forma statement of financial position, to the Acquisition; and

(b) a pro forma income statement that gives effect to the Acquisition as if it had taken place at January 1, 2011, for each of (i) the annual period ended December 31, 2011 and (ii) the interim period ended September 30, 2012.

12. The Filer proposes to include the following financial statements in the BAR (collectively, the "Proposed Financial Statements"):

(a) an audited statement of comprehensive income, a statement of changes in equity and a statement of cash flows for (i) the annual period ended December 31, 2011; and (ii) the period from January 1, 2012 to December 20, 2012, for the Acquisition;

(b) an audited statement of financial position as at the end of each of the periods specified in paragraph 12(a), above, for the Acquisition;

(c) notes to the financial statements specified in paragraph 12(a) and (b);

(d) a pro forma statement of financial position of the Filer as at December 20, 2012 that gives effect to the Acquisition;

(e) a pro forma income statement of the Filer for the period from August 30, 2012, the date of the formation of the Filer, to December 20, 2012 that gives effect to the Acquisition; and

(f) pro forma earnings per share based on the pro forma financial statements referred to in 12(e), above.

13. The filer submits that the Exemption Sought would not be prejudicial to the public interest because the Proposed Financial Statements will provide current and meaningful information to the investor and is a better representation of the financial performance of the Acquired Business.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that the Filer includes in the BAR the following financial statements required to be filed by the Filer in connection with a significant acquisition completed by the Filer on December 20, 2012:

(a) an audited statement of comprehensive income, a statement of changes in equity and a statement of cash flows for (i) the annual period ended December 31, 2011; and (ii) the period from January 1, 2012 to December 20, 2012, for the Acquisition;

(b) an audited statement of financial position as at the end of each of the periods specified in paragraph (a), above, for the Acquisition;

(c) notes to the financial statements specified in paragraphs (a) and (b);

(d) a pro forma statement of financial position of the Filer as at December 20, 2012 that gives effect to the Acquisition;

(e) a pro forma income statement of the Filer for the period from August 30, 2012, the date of the formation of the Filer, to December 20, 2012 that gives effect to the Acquisition; and

(f) pro forma earnings per share based on the pro forma financial statements referred to in (e), above.

"Sonny Randhawa"
Manager, Corporate Finance