Proposals Seek to Provide More Protection and Rights to Crius Unitholders
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
HOUSTON, April 18, 2018 (GLOBE NEWSWIRE) -- JCP Investment Management, LLC (together with its affiliates, “JCP” or “we”), a significant unitholder of Crius Energy Trust (“Crius” or the “Trust”) (TSX:KWH.UN), today issued a statement in connection with its proposals (the “Proposals”) to amend Crius’ trust indenture (the “Indenture”), which is the primary governing document of Crius, in order to provide protection and rights to Crius unitholders that are standard for trusts of Crius’ nature. The Proposals consist of a series of amendments to the Indenture that require the approval of unitholders at the Trust’s upcoming 2018 Annual and Special Meeting of Unitholders (the “2018 Meeting”).
On April 15th, JCP informed Crius that it intended to submit the Proposals for approval by Crius unitholders at the 2018 Meeting. This advance notice was provided so that Crius could include the Proposals in its management information circular for the 2018 Meeting in order to provide adequate notice to unitholders. If the Proposals are approved by unitholders at the 2018 Meeting, the Indenture would be amended to provide the following rights and protections to Crius unitholders, rights and protections which are either not in the Indenture today, or are inadequate and inferior in comparison with Canadian standards:
- The right for unitholders to exercise dissent rights in the context of a compulsory buyout of their units in connection with a take-over bid, instead of being forced to accept the offeror’s bid price for the units, as currently is the case with the Indenture.
- The right to requisition a special meeting of unitholders if the requisitioners hold 5% of the outstanding units. Currently, the Indenture requires a 20% holding, as well as a requirement for the requisitioners to provide upfront funding for the requisitioned meeting. Both of these requirements are dramatically out of line with Canadian standards. If approved, the Proposal would amend the Indenture to give unitholders the right to requisition special meetings consistent with Canadian standards.
- The right for unitholders to make proposals for consideration at meetings of unitholders.
- The right for unitholders to apply to a court to order a unitholder meeting in appropriate circumstances.
- The right for unitholders, upon an approving vote, to appoint an inspector to investigate the performance of the Trustee or the Administrator of their responsibilities and duties.
- The right of unitholders to exercise dissent and appraisal rights in the event of significant events, such as a going private transaction or the sale of all of the assets of the Trust.
- The right to seek court intervention and protection when faced with oppressive behavior by Crius.
The Proposals also include a mechanism for the nomination of directors for election to the Board of Directors of the Trust’s administrator, Crius Energy Administrator Inc. (the “Board”), so that director elections can be made in a full and transparent manner with appropriate disclosure made to unitholders concerning director nominees.
The Proposals reflect basic protections afforded to shareholders of most Canadian corporations, both public and private. Amendments made to the Indenture as a result of unitholder approval at the 2018 Meeting will give Crius unitholders similar rights and protections currently offered to unitholders of Canadian publicly traded trusts with market capitalizations in the billions of dollars.
JCP will be soliciting proxies in support of the Proposals, along with the election of its nominees to the Board – Lalit Aggarwal, Anu Dhir, Ali Hedayat and James C. Pappas – at the 2018 Meeting. Details of the Proposals and their important benefits to unitholders will be described in full detail in JCP’s circular for the 2018 Meeting. More information about the Proposals can also be found at www.fixcrius.com.
About JCP Investment Management:
JCP Investment Management, LLC is an investment firm headquartered in Houston, TX that engages in value-based investing across the capital structure. JCP follows an opportunistic approach to investing across different equity, credit and distressed securities largely in North America.
Investor Contacts:
James C. Pappas
JCP Investment Management, LLC
(713) 333-5540
John Ferguson
Saratoga Proxy Consulting LLC
(212) 257-1311
Disclaimers
JCP has not sought or obtained consent from any third party to the use herein of previously published information. Any such information should not be viewed as indicating the support of such third party for the views expressed herein.
Except for the historical information contained herein, the matters addressed in these materials are forward-looking statements that involve certain risks and uncertainties. You should be aware that actual results could differ materially from those contained in the forward-looking statements. JCP does not assume any obligation to update the forward-looking information.
Information in Support of Public Broadcast Solicitation
JCP is relying on the exemption under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with securities laws applicable to public broadcast solicitations.
This solicitation is being made by JCP, and not by or on behalf of the management of Crius Energy Administrator Inc. and Crius Energy Trust (collectively, “Crius”). The registered address of Crius is Suite 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X 1A4. The mailing address of Crius is 535 Connecticut Avenue, 6th Floor, Norwalk, CT, 06854.
JCP has filed an information circular containing the information required by Form 51-102F5 – Information Circular in respect of its proposed nominees (the “JCP Nominees”), which is available under Crius’ profile on SEDAR at www.sedar.com.
Proxies for the Crius 2018 unitholders' meeting (the “Meeting”) may be solicited by mail, telephone, email or other electronic means as well as by newspaper or other media advertising, and in person by managers, directors, officers and employees of JCP, who will not be specifically remunerated therefor. In addition, JCP may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws.
JCP has entered into an agreement with Saratoga Proxy Consulting LLC (“Saratoga”) pursuant to which Saratoga has agreed that it will act as JCP’s proxy agent should JCP commence a formal solicitation of forms of proxy. Pursuant to this agreement, Saratoga will receive a fee not to exceed US$72,500 (a portion of which being a success fee), plus an additional fee of US$4.00 for each call to or from Crius unitholders. All costs incurred for the solicitation will be borne by JCP.
JCP is not requesting that Crius unitholders submit a proxy at this time. Once JCP has commenced a formal solicitation of proxies, a registered holder of units of Crius that gives a proxy may revoke it: (a) by completing and signing a valid proxy bearing a later date and returning it in accordance with the instructions contained in the form of proxy to be provided by JCP, or as otherwise provided in the final proxy circular, once made available to unitholders; (b) by depositing an instrument in writing executed by the unitholder or by the unitholder's attorney authorized in writing, as the case may be: (i) at the office of Computershare Trust Company of Canada at any time up to and including the last business day preceding the day the Meeting or any adjournment or postponement of the Meeting is to be held, or (ii) with the chairman of the Meeting prior to its commencement on the day of the Meeting or any adjournment or postponement of the Meeting; or (c) in any other manner permitted by law. A non-registered holder of units of Crius will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary.
To the knowledge of JCP, neither JCP nor any of its managers, directors or officers, or any associates or affiliates of the foregoing, nor any of the JCP Nominees, or their respective associates or affiliates, has: (i) any material interest, direct or indirect, in any transaction since the beginning of Crius' most recently completed financial year or in any proposed transaction that has materially affected or would materially affect Crius or any of its subsidiaries; or (ii) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter currently known to be acted upon at the Meeting, other than the election of directors of Crius Energy Administrator Inc.