United Canada Criminal Code | Article 144-Offences involving leveraged buyouts



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16. Offences against Finance and Trade

Article 144-Offences involving leveraged buyouts

144.1

Offences involving leveraged buyouts

Leveraged Buyout is when a financial party acquires a controlling interest in a company's equity with a significant percentage of the purchase price financed through leverage (borrowing) by using the estimated assets of the company as collateral for the borrowed capital.

Primary Fact(s)

1. That the officer or shareholder of the financial party making the leveraged buyout purchase has entered into an agreement to secure some or all of the funding by using some or all of the assets of the target company as collateral; and

2. That the actions of the accused contributed to the situation where some or all of the funding for the purchase of a controlling interest in a company was effectively secured by using some or all of the assets of the target company as collateral; and

3. That the actions of the accused were done with the knowledge and intent of using some or all of the assets of the target company as collateral for establishing a greater or controlling equity position.

Penalty Conditions (Level 2-Crime)

Type	Condition(s)
1-3	a) if the target company is private and the total value of all leveraged loans against the collateral of the target company are less than 1,000 annual wages;
4-6	a) if the target company is public and the total value of all leveraged loans against the collateral of the target company are less than 1,000 annual wages;

Penalty Conditions (Level 3-Crime)

Type	Condition(s)
1-3	a) if the target company is private and the total value of all leveraged loans against the collateral of the target company are greater than 1,000 annual wages and less than 5,000 annual wages;
4-6	a) if the target company is public and the total value of all leveraged loans against the collateral of the target company are greater than 1,000 annual wages and less than 5,000 annual wages;

Penalty Conditions (Level 4-Crime)

Type	Condition(s)
1-3	a) if the target company is private and the total value of all leveraged loans against the collateral of the target company are greater than 5,000 annual wages and less than 20,000 annual wages;
4-6	a) if the target company is public and the total value of all leveraged loans against the collateral of the target company are greater than 5,000 annual wages and less than 20,000 annual wages;

Penalty Conditions (Level 5-Crime)

Type	Condition(s)
1-3	a) if the target company is private and the total value of all leveraged loans against the collateral of the target company are greater than 20,000 annual wages;
4-6	a) if the target company is public and the total value of all leveraged loans against the collateral of the target company are greater than 20,000 annual wages;

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