A recent Ontario decision examined the confidentiality duties of financial advisors and, indirectly, of potential purchasers, towards a target company in the context of a hostile takeover bid. An injunction was issued restraining a company from proceeding with its hostile takeover bid to acquire the shares of another mining company. The injunction was sought by the target company on the basis that, for the purposes of preparing the takeover bid, the co-defendant had hired the advisory services of a firm with contractual confidentiality and loyalty obligations towards the target company. The judge granted the injunction on the basis that there was a strong case to the effect that the financial advisory firm, co-defendant, had breached its obligations towards the target company and that the company making the bid was aware of such breaches. The judge found that the company making the bid should be bound to respect the contractual obligations of the financial advisory firm, rather than benefit from any breaches thereof.

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