$16 Million Awarded for Breach of Bought Deal Engagement Letter by Dealer

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Overview -

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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Topics:  Bought Deals, Engagement Letters, Financing

Published In: Civil Remedies Updates, General Business Updates, Energy & Utilities Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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