On March 1, 2013, the Ontario Superior Court of Justice determined that Stifel Nicolaus Canada Inc. (formerly Thomas Weisel Partners Canada Inc.) breached its bought deal engagement letter with Stetson Oil & Gas Inc. To compensate Stetson for damages stemming from the 2008 failed private placement bought deal financing, the court has ordered Weisel to pay Stetson damages of approximately C$16 million.
The court found that the engagement letter between Weisel and Stetson was a binding agreement and that Weisel had breached its obligations under that agreement. The decision serves as a warning to investment bankers eager to put firm deals in front of companies that it is not easy to back out of bought deal commitments.
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