Compensation Regulations — 3
Amount of compensation 3 (1) For the purposes of determining the amount of compensation to which a prescribed person is entitled, the Corporation must estimate the liquidation value and resolution value of the person’s shares or liabilities that are referred to in subsection 2 (1). Liquidation value (2) The liquidation value of a share or liability is the estimated value that the prescribed person would have received in respect of the share or liability if an order under the Winding-up and Restructuring Act to wind up the federal member institution had been made immediately before the making of an order under subsection 39.13(1) of the Act in respect of the institution. Assumptions (3) The liquidation value is to be estimated (a) as if no order under subsection 39.13(1) of the Act has been made in respect of the federal member institution; and (b) without taking into consideration any assistance, financial or other, that is or may be provided to the federal member institution, directly or indirectly, by the Corporation, by the Bank of Canada or by Her Majesty in right of Canada or a province after any order to wind up the institution has been made. Resolution value (4) The resolution value of a share or liability is the total of the estimated value of the following: (a) the share or liability, if it is not held by the Corporation and it was not converted, after the making of the order under subsection 39.13(1) of the Act, into common shares under subsection 39.2(2.3) of the Act or in accordance with their terms; (b) common shares that are the result of a conversion of the share or liability carried out, after the making of the order under subsection 39.13(1) of the Act, under subsection 39.2(2.3) of the Act or in accordance with their terms; (c) any dividend or interest payments made, after the making of the order under subsection 39.13(1) of the Act, with respect to the share or liability to any person other than the Corporation; and (d) any other cash, securities or other rights or interests that are received or are to be received with respect to the share or liability as a direct or indirect result of the making of an order under subsection 39.13(1) of the Act and any actions taken in furtherance of the order, including cash, securities or other rights or interests to be received from any of the following: (i) the Corporation or the federal member institution, (ii) the liquidator of the federal member institution, if the institution is wound up, (iii) the liquidator of a corporation described in subsection 10(2) of the Act, if the corporation is liquidated, (iv) the liquidator of a bridge institution, if the bridge institution is wound up. Determination of compensation (5) Subject to subsection (7), the amount of compensation to which a prescribed person is entitled with respect to each share or liability is determined by the formula A − B − C where A is the estimated liquidation value; B is the estimated resolution value; and C is (a) if the share or liability is converted into common shares in accordance with its terms, an amount equal to an estimate of losses attributable to that conversion, or (b) in any other case, zero. For greater certainty (6) For greater certainty, a prescribed person is not entitled to compensation if the amount of compensation determined under subsection (5) is zero or a negative value. Difference in time (7) In determining the amount of compensation to which a prescribed person is entitled, the Corporation must consider the difference between the estimated day on which the liquidation value would be received and the estimated day on which the resolution value is, or would be, received. Same class (8) Every offer of compensation in respect of the shares or liabilities of a federal member institution that are of the same class must be calculated using the same amount of compensation, in the case of (a) common shares, per share, (b) shares other than common shares, per dollar of liquidation entitle