Student Paper Award

The Canadian Tax Foundation-Osler Hoskin Harcourt Award for Quebec 2013-14

Adam Drori

The Canadian Tax Foundation is pleased to announce that Adam Drori is the winner of the Canadian Tax Foundation-Osler Hoskin Harcourt Award for the best
Quebec student paper of 2013-14 dealing with an aspect of Canadian taxation. 

Mr. Drori’s paper, “Price Related Terms in Agreements for the Purchase and
Sale of a Business,” was written for the Masters of Law program at hec Montreal. Mr. Drori obtained a bachelor of arts degree from McGill University in 2007 and
civil and common-law degrees from McGill University in 2010, all with honours. While completing his law degrees at McGill, he was the recipient of the Mackay
Award in Corporate Taxation as well as the Speigel Sohmer Taxation Scholarship. He has practised tax law at Stikeman Elliott llp since his admission to the Quebec bar in 2013. 


This paper discusses the tax consequences that can arise from certain commercial terms relating to purchase price that are commonly found in purchase and sale agreements. 

The first section addresses the allocation of purchase price in an asset deal, and specifically the risk of a reallocation by the Canada Revenue Agency under section 68 of the Income Tax Act. It analyzes the leading case law on reallocations, the Federal Court of Appeal decision in Transalta Corporation v. R (2012 fca 20), and focuses on reallocations between goodwill and other assets. 

The second section addresses the tax consequences of holdback and escrow clauses
that secure a vendor’s indemnification obligations under the agreement and focuses on the availability of reserves and issues relating to interest.

The last section addresses the tax consequences (certain and less so) relating to conventional and reverse earnouts and focuses on how the outcome may vary depending on whether the deal is an asset