VANCOUVER, British Columbia, April 09, 2019 (GLOBE NEWSWIRE) -- Deans Knight Income Corporation (the "Company") announces that the Company has been successful in its appeal to the Tax Court of Canada (the "TCC"). The TCC has allowed the Company's appeal of the notices of reassessment ("NORAs") issued by the Canada Revenue Agency ("CRA") in respect of the Company's taxation years 2009 to 2012, inclusive.
As previously disclosed, the Company received the NORAs in July 2014 in which the CRA denied the use of certain tax attributes by the Company. The NORAs indicated that the Company's tax liability for the 2009 to 2012 taxation years was approximately $22.7 million, including arrears interest and penalties. In order to limit additional interest and penalties from accruing, the Company prepaid the CRA and as of today's date, the prepaid tax asset amounts to approximately $2.05 per share.
On April 5, 2019, the TCC released its decision in favour of the Company. The Crown has 30 days to appeal to the Federal Court of Appeal. If the Crown appeals the TCC decision, the Company anticipates that final resolution could take an additional 18-24 months.
In the event that the Crown does appeal the decision, the Company intends to continue its vigorous defence of its tax filing position. In the event that the Crown does not appeal, the Company will continue its liquidation process. Any capital to be returned to shareholders will be subject to the Company's litigation costs (including in connection with any further appeal by the Crown, if applicable) and the Company's ongoing general and administrative costs.
"When the portfolio liquidation commenced in 2014, shareholders were required to retain over $2 per share in the Company, primarily consisting of funds on deposit with the CRA," said Dillon Cameron, CEO. "This decision is the first step in returning the remaining balance of shareholders' assets and allowing them to redeploy their capital as they see fit." Cameron continued, "Since the Initial Public Offering in 2009, management has maintained the view that the Company's tax filing position was appropriate. The original objective of the Company was to maximize total return for shareholders by investing primarily in corporate debt securities. For the first 5 years we executed this strategy and for the last 5 years we have defended the Company's tax filing position. We look forward to further updating our shareholders as information becomes available.”
Burnet, Duckworth & Palmer LLP acted as legal counsel for the Company in connection with its appeal to the Tax Court of Canada.
For further information contact:
| Dillon Cameron | Kelsey Dunwoodie |
| Director, Chief Executive Officer | Chief Financial Officer |
| Deans Knight Income Corporation | Deans Knight Income Corporation |
| (604) 669-0212 | (604) 669-0212 |