An advisor's success fee prompted a second opinion before the vote
An Ontario court approved a Kneat.com going-private plan, requiring a second fairness opinion over an advisor's success fee.
Justice Dunphy of the Ontario Superior Court of Justice issued the interim order on June 26, 2026, on an application brought under section 192 of the Canada Business Corp orations Act. The order clears kneat.com, inc. to send meeting materials to shareholders as part of a proposed plan of arrangement that would take the company private, with TB Peloton Topco Inc. on the other side of the deal.
The plan covers more than common shareholders. Holders of options, restricted stock units and deferred share units are also part of the arrangement, according to the endorsement.
Dunphy described the transaction as the result of a thorough marketing process that followed an unsolicited approach, carried out under the watch of a Special Committee of the board with its own financial and legal advisors. He described the application materials as thoroughly and professionally prepared, addressing the questions he had at this interim stage.
One detail worth flagging for compliance and fund-oversight teams: the Special Committee obtained a second fairness opinion because its financial advisor had a success fee riding on the deal. A success fee only pays out if a transaction closes, so a second, independent opinion is one way a board can show it managed that built-in incentive rather than simply accepted the advisor's view at face value. Dunphy's endorsement treats that extra step as part of what supported approval of the interim order.
The judge also noted that Canada's CBCA Director was notified of the application and voiced no opposition, and that the draft order matched the court's Model Order closely. Dunphy summed up the state of the file this way: "all of the I's have been dotted and you've crossed at this stage." The endorsement reads as a routine, uncontested approval rather than a contested fight over price or process.
Dunphy was clear that approving the interim order does not settle anything about the deal's merits. He wrote that it would be for the shareholders themselves to decide what they think of the matter, leaving judgment on value and terms to the vote rather than the bench.
The Initial Order was approved in the form proposed. The matter returns August 4, 2026, for a final approval hearing to be held by video, following the shareholder vote on the arrangement resolution.
For advisors and portfolio managers holding Kneat.com positions on behalf of clients, the ruling means the deal now moves to a shareholder vote, the next real test of whether the arrangement proceeds. It is also a useful illustration of how a second fairness opinion functions in these deals: not a red flag, but a governance step boards take when a financial advisor's own compensation is tied to the outcome.
