CML Healthcare Inc. completed a plan of arrangement on February 23, 2004, that resulted in the creation of two new entities, CML Healthcare Income Fund, an income trust owning CML’s diagnostic services business, and Cipher Pharmaceuticals Inc., a pharmaceutical corporation owning CML’s drug development and pharmaceutical research business. Units of the fund and shares of Cipher began trading on the TSE on February 25. When the transaction was announced on December 15, 2003, CML shares had a market value of approximately $730 million. Nine weeks later, former holders of CML’s common shares received securities and cash with an aggregate value of approximately $1.25 billion, consisting of four units of the fund, one share of Cipher and cash proceeds in the amount of $7 per CML share. As part of the arrangement, CML also entered into new credit facilities in the amount of $200 million with a syndicate of lenders.

CML was represented by Davies Ward Phillips & Vineberg LLP, with a team that included Shawn McReynolds, Patrick Moyer and Donna Aronson (corporate/securities), Ian Crosbie, Siobhan Monaghan and Paul Lamarre (tax), Scott Hyman, Sonny Bhalla and Jim Nikopoulos (banking), Don Stanbury (real estate), Tim Youdan (trusts) and James Doris (litigation) in Toronto, Alain Roberge (banking) in Montreal and Gerald Shepherd (securities) in New York.