May 26 (Bloomberg) -- Canada's highest court agreed to expedite BCE Inc.'s appeal of a Quebec court ruling that blocked the Canadian phone company's record C$52 billion ($52 billion) leveraged buyout.

The Supreme Court of Canada today gave the two sides until May 30 to file the application for a hearing and responses. If it agrees to grant the hearing, the court suggested a June 17 date in Ottawa.

The ruling indicates the judges consider the matter of ``national importance,'' one of the criteria they use to determine whether they'll hear a case, said Richard Powers, a lawyer and executive director of MBA programs at the University of Toronto's Joseph L. Rotman School of Management. Dismissal of the BCE application would have increased the likelihood the deal would be jeopardized, he said.

``This is the first hurdle they had to cross,'' Powers said. ``You have to get that before you get leave.''

BCE shares may rebound tomorrow on expectations the court may agree to hear BCE's appeal. The stock had its biggest drop in 25 years on May 22 after a Quebec court ruled the takeover by the Ontario Teachers' Pension Plan and other investors didn't take into account bondholders' rights.

``This is good news for BCE,'' said Michael Sprung, president of Sprung & Co. Investment Counsel in Toronto, which oversees about $50 million. ``It's about the only chance to get the deal back on track. But there are still a lot of hurdles to clear.''

Stock Rises

BCE rose 16 cents to C$33.78 at 4:10 p.m. on the Toronto Stock Exchange. The Teachers'-led group offered C$42.75 a share for the Montreal-based company, in the biggest leveraged buyout.

Kent Thomson, BCE's lawyer, didn't immediately respond to a request for comment, nor did BCE spokesman Bill Fox, or Deborah Allan, a spokeswoman for Toronto-based Ontario Teachers'.

In a filing earlier today, BCE Inc. bondholders opposed to the buyout said the country's highest court doesn't need to act quickly to hear the appeal.

A June 30 deadline set by Ontario Teachers' and other investors is ``entirely artificial'' and should be extended to Nov. 30 if the Supreme Court agrees to hear the appeal, the bondholders' group said.

``It is inappropriate for BCE and the purchaser to manufacture an artificial deadline between them and then, threatening catastrophe and cataclysm, demand that the appeal they would like to bring be disposed of before June 30,'' the group said.

Default Risk

The Court of Appeal of Quebec, in a 5-0 decision May 21, overturned a trial judge's approval of the buyout, saying the bondholders' interests weren't taken sufficiently into account when the purchase was approved.

The bondholders, among them CIBC Global Asset Management Inc., say the acquisition would load Canada's biggest phone company with debt, increasing the risk of a default. Teachers' had planned to raise about C$34 billion in debt for the deal, according to regulatory filings.

The Supreme Court gave BCE until May 28 to file its papers, and the bondholders until May 30 to respond.

The court also set out a proposed timetable, in case it agrees to hear the case. It gave people wishing to intervene until June 6 to file their applications.

``This is great,'' Powers said. ``The landscape is a bit confused right now and this means we're going to get clarity.''

The case is Between BCE Inc. and a group of 1976 Debentureholders. Supreme Court of Canada (Ottawa). File No. 32647.

To contact the reporters on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net. Chris Fournier in Montreal at cfournier3@bloomberg.net

Last Updated: May 26, 2008 18:22 EDT