Tuckamore Capital Management Inc.

Tuckamore Capital Management Inc.

September 16, 2014 19:11 ET

Tuckamore Notified of Possible Indemnity Claim by Brompton Corp.

TORONTO, ONTARIO--(Marketwired - Sept. 16, 2014) - Tuckamore Capital Management Inc. (TSX:TX) (TSX:TX.DB.B) ("Tuckamore" or the "Company") has been advised by Brompton Corp. ("Brompton") that Brompton has received a letter (the "Proposal Letter") from the Canada Revenue Agency (the "CRA") wherein the CRA proposes to deny the deduction to Brompton of certain non-capital losses and other tax attributes in respect of Brompton's 2009 to 2013 taxation years. Tuckamore Holdings LP, a wholly-owned subsidiary of Tuckamore, held approximately 40% of the outstanding shares of Brompton during certain of these periods. Tuckamore Holdings LP sold its interest in Brompton in 2011.

Tuckamore has been notified by Brompton that in the event Brompton is subject to taxes assessed by CRA or incurs losses or costs associated with the CRA's review, it will be seeking indemnification for approximately 40% of these taxes, losses or costs pursuant to agreements entered into by Tuckamore Holdings LP.

Brompton has announced that it has not received any notice of reassessment from CRA to date and that based on the Proposal Letter it estimates its total additional tax liability could be approximately $10.4 million exclusive of penalties, interest, legal costs and other costs. Brompton also notes in its announcement that it remains of the view that its tax filing position is appropriate and does not believe any additional assessment of income tax by CRA is warranted, that it intends to vigorously defend its position, and that legal proceedings through the relevant courts could take considerable time to resolve.

Tuckamore is reviewing its agreements with Brompton and is considering its alternatives in respect of any potential claim for indemnification. The Company intends to follow and participate in the conduct of any negotiations, objections, appeals or other tax-related proceedings relating to the periods during which it was, indirectly, a shareholder of Brompton and to exercise all rights and remedies that it may have in respect of any claims brought by Brompton against Tuckamore Holdings LP for indemnification.

Cautionary Note Regarding Forward Looking Statements

This press release contains forward-looking statements based on current expectations, including but not limited to Tuckamore's intentions with respect to the Proposal Letter, the CRA Review and claims for indemnification. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Tuckamore's business are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada and available at www.sedar.com. Additional important factors that could cause actual results to differ materially include, but are not limited to: the outcome of the CRA's review. Readers are cautioned that the foregoing is not exhaustive. Although the forward-looking statements are based on what management considers to be reasonable assumptions based on information currently available to it, there can be no assurance that actual events or results will be consistent with these statements, and management's assumptions may prove to be incorrect. Forward-looking statements are not guarantees of future performance. In light of the significant uncertainties inherent in the forward-looking information included herein, any such forward-looking information should not be regarded as representations by Tuckamore that its objectives or plans will be achieved. Investors are cautioned not to place undue reliance on any forward-looking information contained herein. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. In addition, these forward-looking statements relate to the date on which they are made. Tuckamore disclaims any intention or obligation to update or revise any forward-looking statements or the foregoing list of factors, whether as a result of new information, future events or otherwise, except to the extent required by law.

About the Company

Tuckamore has investments in 7 businesses representing a diverse cross-section of the Canadian economy.

Contact Information

  • Tuckamore Capital Management Inc.
    Keith Halbert
    Chief Financial Officer