A $250 million class action has been launched on behalf of all persons who, on December 3, 2001, owned a least one unit of the 6.75% debentures issued by Bell Canada International. The defendants named in the suit are BCE, BCI and individual directors of BCI, including former chairman and CEO Jean Monty and new CEO Michael Sabia. BMO Nesbitt Burns is also named in the action.

The plaintiffs are Kenneth Field, K. Field Resources, Brian Clark and Cooper Spence are represented by Harvey Strosberg of Toronto law firm Sutts, Strosberg LLP. The class action alleges that BCE, BCI and BCI’s directors acted oppressively, were unfairly prejudicial to and unfairly disregarded the interests of the holders of the 6.75% debentures.

On February 15, 2002, BCI retired the debentures by issuing approximately 11,211,546 BCI common shares it valued at approximately $0.27 per share. Yet, on the same day, BCI issued and sold approximately 3 billion BCI common shares to existing shareholders, under the recapitalization transactions, at approximately $0.14 per share, thereby raising approximately $441 million.

The class action also alleges that the recapitalization plan, announced on December 3, 2001 and implemented on February 15, 2002, was designed to permit BCE to maintain control of BCI at the least cost.

Under a rights offering included in the recapitalization plan, BCE purchased from BCI approximately 2.654 billion common shares at a cost of approximately $391 million. As a result, BCE holds 62.2% of BCI’s issued common shares and continues to control BCI. Had BCI retired the debentures with BCI common shares valued at approximately $0.14 per share, BCE would have been required to pay to BCI a further $115 million to maintain its 62.2% controlling interest.

The plaintiffs allege that BMO Nesbitt Burns was negligent in the performance of services and in the expression of its opinions. For example, BCI has stated that it valued the common shares at approximately $0.27 per share for the purposes of retiring the debentures based upon advice it received from Nesbitt Burns.

Investors who, on December 3, 2001, owned a unit or units of the 6.75% convertible unsecured subordinated debentures issued by BCI may register with class action counsel, at no cost, by visiting a website set up for this purpose.