# Definity Financial Corp DFY



## Synergy (Mar 18, 2013)

Definity Financial Corporation Prices $2.1 Billion Initial Public Offering








Definity Financial Corporation Prices $2.1 Billion Initial Public Offering and Concurrent Private Placements


/CNW/ - Definity Financial Corporation ("Definity") announced today that it has entered into an underwriting agreement for its initial public offering (the...




www.newswire.ca





Economical has become the first Canadian federally-regulated property and casualty insurer to demutualize. 

It will be interesting to see how they perform and whether or not other mutual's follow suit. Regardless, we will likely see continued consolidation in the industry. This may bode well for DFY.


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## sags (May 15, 2010)

We will be getting some shares at the IPO. The company deemed we would receive cash instead of shares.

Shares were pre-sold @ $22 a share in private offerings, but opened on the exchange @ $29 a share.

Which price should we expect to receive ?


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## Rebecca (Aug 10, 2014)

I'm pessimistic and have ASSumed that we will be getting the $22. I requested cash, but have not had that confirmed (or denied). Did Economical contact you about that?

Just checked the "Join our Future" website and found this (seems to say that we'll be getting the $22): 

6.6 Distribution of Cash Payments
(1) The IPO Price will be determined at the time that the Underwriting Agreement is entered into, and at that time the amount
of cash to be distributed to each Cash Recipient can be determined and will constitute an obligation of the Company to pay

such amounts.
(2) All cash payments will be paid by the Company out of the Net IPO Proceeds. Subject to Section 6.8, a cash payment will be
made to each of the following groups and such cash payments shall be initiated sequentially, on or after the Final

Consideration Date, in the following order:
(a) first, to the Foundation, pursuant to Section 6.2(2);

(b) second, to those deemed Cash Recipients who are Foreign Recipients, Governments or Minors, pursuant to
Section 6.2(1);
(c) third, to those deemed Cash Recipients pursuant to Section 6.5(2);

(d) fourth, to Cash Recipients who elected to receive cash and who are not Foreign Recipients, Governments or
Minors, pursuant to Section 6.2(1), and to Mixed Recipients (in respect of their Cash Portion), pursuant to

Section 6.4(2); and
(e) last, to Share Recipients and Mixed Recipients (in respect of their Share Portion), pursuant to Section 6.7(3), if
applicable


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## Synergy (Mar 18, 2013)

You should have went with the shares! Cash price will be based on the IPO.


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## Rebecca (Aug 10, 2014)

But who knows where the price will be next year? If you took the shares, you couldn't sell them right away and had a long waiting period to do so (can't remember exactly, but I think that it was about six months).


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## sags (May 15, 2010)

The mutual policy holders will receive $501,000 each and it was calculated at $22 per share.

All the mutual policyholders received shares and must hold them for 180 days.

The non-mutual policyholders will receive varying amounts depending on the type, duration, and premiiums of their policy.

The mutual benefits are above the previous estimated $300,000 to $430,000 range.

Letters are being sent advising everyone their payout numbers. The cheques will be mailed before the end of the year.

The benefits are taxable as income.


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## fireseeker (Jul 24, 2017)

sags said:


> The benefits are taxable as income.


According to the GoC, demutualization benefits paid as cash will be taxed as dividends.

How will I be taxed on my demutualization benefits?


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## Synergy (Mar 18, 2013)

Shares are not subject to tax until sold. Plus they will be subject to capital gains only. I'm not sure but I was under the impression that the dividend will be ineligible or a combination of eligible / ineligible. Tax consequence will depend on your marginal tax rate.


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## Rebecca (Aug 10, 2014)

If they don't get cheques out to all of the "cash option" people by year's end, will that move the tax obligation into 22, or will it be based on when the IPO occurred?


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## Rebecca (Aug 10, 2014)

For those waiting for their cheques, I received mine this morning. It was much better than I was expecting (over $7,000), and more than the highest estimate they gave me on the "Join In Our Future" page.


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## sags (May 15, 2010)

Great news......I thought that may be the case because the IPO was higher than estimated the company value way back.

Actually, the company deserves kudos for strengthening their business with an online portal and eliminating some areas of climate change risk........while they waited.

Enjoy those "couple of dinners"........


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## Rebecca (Aug 10, 2014)

sags said:


> Great news......I thought that may be the case because the IPO was higher than estimated the company value way back.
> 
> Actually, the company deserves kudos for strengthening their business with an online portal and eliminating some areas of climate change risk........while they waited.
> 
> Enjoy those "couple of dinners"........


If you haven't received yours yet, I hope that you are pleasantly surprised too. Yes, all of my dinners could be aboard a high-end cruise ship if I so desired, lol. 

Now, I'm just hoping that this dividend income qualifies for the Canadian dividend tax credit.


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## Rebecca (Aug 10, 2014)

Rebecca said:


> If you haven't received yours yet, I hope that you are pleasantly surprised too. Yes, all of my dinners could be aboard a high-end cruise ship if I so desired, lol.
> 
> Now, I'm just hoping that this dividend income qualifies for the Canadian dividend tax credit.


 Just replying to my own response. In fine print, on the cheque stub, it says: "The portion of this demutualization benefit payment that will be designated as an eligible dividend has not yet been determined. Notification of the designated amount will be made on Join In Our Future and reflected on your T5 slip at a later date".

Fingers crossed that it will all be eligible, or at least a good portion!


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## sags (May 15, 2010)

The company added this to their website FAQ section.

_December 10, 2021

Letter Respecting the Designation of Dividends Paid Upon Demutualization

The Company has designated $0.36 of every $1.00 paid, or 36% of the total dividend received by each eligible policyholder as demutualization benefits as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act (Canada).

This notice is our written notification of the eligible dividend designation for dividends paid upon demutualization. Pending a favourable Ruling from the Canada Revenue Agency, the Company may designate a larger portion as an eligible dividend, however, the amount of the dividend paid to you will not change. We will notify you on this website of any increase in the amount designated as eligible dividend. Your T5 slip when issued to you will show the amount of eligible dividends for income tax purposes._


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## Bruce_K (Jan 15, 2017)

I received a cheque in late 2021 sent to my personal home address, but in the name of the Bare Trust Corporation -- a Joint Venture -- that purchased the insurance for an office condo, which made several co-owners theoretically eligible for a cash benefit. I was the president, secretary and joint venture operator. However, that corporation was dissolved over 3 years ago. Economical said they couldn't change who the cheque was made out to when I asked them to stop payment and reissue amounts to each of the former co-owners, but our bank allowed me to deposit it to my account by agreement of the other former co-owners who I was able to reach, except for one who has disappeared. To get a T5, I had to call Computershare who directed me to Stock Transfer Services where I had to request a T5 as they don't automatically send them out to companies and I had to provide documentation showing I was authorized to receive it. I received it a month after they told me they mailed it and it had my SIN number on it and showed the full amount of the cheque as an eligible dividend, but didn't show the gross-up or tax credit, which I can calculate myself. Before receiving the T5 and after I complained that I hadn't received it, they subsequently sent me 2 more of the same T5 slip in separate envelopes arriving on the same day, but after I got the first one. However, those don't have my SIN # on them. I talked to the CRA to see if they could match up the T slip to my account, but they couldn't and I am not sure they have even received it. They told me to report the income on my personal tax return which will be placed under review and I can submit the T5 then. The cheque was for over $2,000 and I contemplated just not cashing it, but having received it and one T5 that shows my SIN #, I couldn't do that. I am responsible for reporting it and paying the tax whether I deposited it or not. What a pain in the neck this has caused me. Just curious if anyone else has gone through something similar? There must have been many corporations that purchased insurance from Economical who also got a cheque and some of them may also no longer exist.


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