Why a judge had to sign off on two salon chains joining up

The situation

'Why does a judge need to sign off on two hair salon companies joining together? We are not asking permission to run our business.' That was Dawit's question, sent from overseas, where he had been living for the better part of a year while a manager ran the day-to-day of his Collingwood salon chain. It was a fair question, and the honest answer took most of the deal to fully deliver, but the short version is this: because of how the merger was structured, and because his company was not the only one involved that a court had to look at.

Dawit's business, a chain of salons based in and around Collingwood, and Tesfay's, a similarly sized competing chain incorporated in the United States, had agreed to combine into a single company rather than have one simply buy the other outright. The combined business, valued in the eight-to-fifteen-million-dollar range once both chains were folded together, made more sense as a single entity than as two competitors slowly absorbing one another through separate deals. Zoran, representing the other side of the negotiation as Tesfay's counterpart on deal terms, had pushed for a structure that let both sets of owners end up as shareholders in the merged company, rather than one side simply cashing out.

That structure, a plan of arrangement, is a court-supervised process available under Ontario corporate law for exactly this kind of reorganization, where a straightforward purchase agreement does not cleanly capture what the parties are trying to do. A straightforward agreement of purchase and sale works cleanly when one company simply buys another's shares or assets for cash or stock and one side walks away. It works less cleanly when both companies are meant to survive, combined, with both sets of owners holding shares in the result, because that kind of reorganization changes the rights of shareholders on both sides in ways an ordinary purchase agreement is not built to authorize on its own. Because Dawit's company was incorporated in Ontario, the arrangement needed approval from an Ontario court. Because Tesfay's company was incorporated in the United States, a parallel approval process was required there too, and the two processes needed to reach their conclusions on a timeline that let the merger actually close as one transaction rather than two disconnected ones.

Dawit, managing all of this from overseas with a many-hour time difference from both Collingwood and Tesfay's US offices, was not able to attend meetings, sign documents in person, or review filings on the same day they were prepared. Every step of the deal ran through email, video calls scheduled around the time difference, and documents signed electronically and returned hours later than they would have been if he had been in the room.

What the documents showed

The answer to Dawit's question, and the source of the problem that followed, both sat in the same set of documents: the plan of arrangement filed in Ontario and its counterpart process in the United States were not, on paper, one coordinated filing. They were two separate processes, each proceeding under its own jurisdiction's procedure, an Ontario court application on one side and a shareholder-approval and state-filing process on the other, each with its own notice requirements to shareholders and creditors, and its own timeline for objections to be raised before approval could be granted.

In a deal where both companies are staying in business as one combined entity, rather than one simply disappearing into the other through a sale, the plan of arrangement process exists to protect everyone with a stake in either company, shareholders, and sometimes creditors, by giving a court the chance to confirm the arrangement is fair before it becomes final. That is the honest answer to Dawit's question: the court is not approving the business decision to merge, it is confirming that the specific legal mechanism chosen to do it, one that changes shareholders' rights and can affect creditors on both sides, was carried out fairly and with proper notice to everyone affected.

What the documents showed, once we compared the Ontario filing against what US counsel had filed on Tesfay's side, was a gap in the notice periods. The Ontario process had built in a notice window to shareholders that assumed the US approval would already be in hand by a certain date. The US filing, prepared on a slightly different internal schedule by Tesfay's counsel, was not going to reach that stage until roughly three weeks later than the Ontario timeline assumed. Nobody had flagged the mismatch when the two filings were prepared separately, because each side's counsel was working from what its own jurisdiction required, a court schedule and a fairness hearing in Ontario, a shareholder vote and state-law filing deadlines in the United States, without a shared master timeline connecting the two.

Left uncorrected, the mismatch would have meant the Ontario court's approval could be finalized before the US approval existed, creating a period where one half of the merged structure was legally in place and the other was not, a gap that could have exposed both companies to disputes from shareholders or creditors questioning whether the arrangement, as a whole, was actually complete and enforceable.

What we did

1. Requested the US filing schedule directly from Tesfay's counsel. Rather than rely on secondhand summaries passed through the business principals, who were themselves relaying information across a large time difference, we asked for the actual filed documents and the confirmed approval and filing dates from the US side, which is how the notice period mismatch was first confirmed rather than assumed from a hallway conversation weeks earlier.
2. Built a single combined timeline covering both jurisdictions. We mapped every Ontario and US approval step onto one shared calendar, identifying each point where one process depended on the other being complete, so the gap became visible as a specific, dated range on a single page, rather than something buried across two separate sets of court and corporate filings that nobody had ever laid side by side before.
3. Sought a short adjournment of the Ontario hearing date. Once the mismatch was clear, we applied to move the Ontario court date to align with the corrected US timeline, which required explaining the coordination issue candidly to the court rather than letting the original date pass and hoping the US side would somehow catch up before it mattered. The court granted the adjournment without objection once it understood the correction was aimed at making the notice period accurate, not at delaying scrutiny of the arrangement itself.
4. Arranged for Dawit's approvals to be handled entirely by video and electronic signature. Because he could not attend in person from overseas, we coordinated with the court and with US counsel to confirm electronic execution and remote appearance were acceptable at each stage, and built extra time into every deadline to account for the time difference rather than assuming a same-day turnaround he could not realistically deliver.
5. Reissued shareholder notice under the corrected timeline. Once the Ontario hearing date moved, we ensured shareholders on the Ontario side received updated notice reflecting the new schedule, so the record showed proper notice was given for the dates the arrangement actually proceeded on, protecting the approval from a later argument, from a disgruntled shareholder or an unpaid creditor, that notice had been defective and that the arrangement should never have been allowed to proceed on the date it did.
6. Coordinated a joint status call between Ontario and US counsel each week. Rather than leave the two filings to run on separate tracks again once the correction was made, we set a standing weekly call between both legal teams through to closing, so any new mismatch would surface within days rather than being discovered again close to a hearing date.
7. Confirmed final alignment between both approvals before either was treated as final. Rather than close on the Ontario approval alone, we waited for written confirmation the US process had also concluded, and only then finalized the combined closing, closing the exact gap the original mismatch would have left open between the two halves of the merged structure. That final check was what actually protected the deal; everything before it only reduced how far apart the two approvals could drift.

The outcome

The merger closed, with both the Ontario and US approvals finalized within days of each other rather than weeks apart. The combined company began operating as a single entity across both chains roughly a month later than the original schedule had projected, with shareholders on both sides of the border receiving corrected, properly timed notice before either approval became final.

The delay was not free. Adjourning and reissuing the Ontario hearing added legal cost on both sides of the border, and the month of additional time meant integration work that had been planned for that period, shared scheduling systems, combined supplier accounts, staff transfers between locations, was pushed back as well. None of that damage was severe, but none of it was necessary either, and it traced directly back to two law firms preparing coordinated filings without a shared timeline between them from the start. Had the mismatch gone uncaught, the exposure would have been considerably worse than a month's delay: a period where the merged structure existed on paper in one country but not the other is exactly the kind of gap a disgruntled shareholder or an unpaid creditor could use to argue the arrangement was never properly completed at all.

Zoran, on Tesfay's side, agreed to the adjournment without much resistance once the reasoning was explained, which kept the correction from becoming its own point of dispute between the two merging companies at a moment when goodwill between them still mattered for the integration ahead.

Dawit, once the deal closed, said the frustrating part was not the delay itself but realizing the gap had been avoidable from the beginning, a shared calendar between counsel on both sides would have caught it before either filing was made. Managing the correction entirely from overseas added its own friction, extra hours added to every call, documents that sat overnight waiting for a signature, but it did not cause the underlying problem, and once the mismatch was found, acting on it quickly kept a real gap from becoming a real dispute. He said he would ask, on any future deal, for that shared calendar on day one rather than assuming two experienced firms would naturally keep each other's timelines in view.

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