The BC Supreme Court has backed Telus (TSX:T) in the latest part of its protracted battle with Mason Capital Management LLC.
The court ruled that the New York hedge fund cannot hold a meeting of Telus shareholders that it had tried to call and that Mason Capital's proposed resolutions are invalid.
Telus launched the court action earlier this month, in response to Mason Capital trying to stop Telus' proposed exchange of non-voting shares into common shares on a one-for-one basis.
According to a news release from Telus, the court decision critiqued Mason Capital's "empty voting" strategy.
"When a party has a vote in a company but not economic interest in that company, that party's interests may not lie in the wellbeing of the company itself," the court stated, according to Telus. "The interests of such an empty voter and the other shareholders are no longer aligned and the premise underlying the shareholder vote is subverted."
Telus said it will proceed with its October 17 meeting, at which Telus shareholders will vote on the share exchange proposal.
Mason Capital, however, has vowed to fight back.
"While we are disappointed by the court's decision, on a review of the reasons, we have concluded that there are strong grounds for appeal," the hedge fund said in a news release, adding that it will look to expedite the appeal to ensure a decision before the October 17 meeting.
Mason emphasized its belief that voting share owners should have the opportunity to vote on the change and to establish "an appropriate minimum premium" on the transaction.
"Mason will vote its shares against Telus' proposal and, to the extent required, will assert substantial claims available to it and other voting shareholders against the oppressive actions Telus has taken against the class of voting shareholders," the hedge fund said.
