Chapter 9: Flashcards
Bradley Resources Corporation v. Kelvin Energy Ltd. got a Meriva injunction. Why is that unusual?
A mareva injunction is a pre-judgment remedy. There was no final decision on the merits of the action. Kelvin says: “that’s no good”. The fight was over the value of the shares. How far apart were they? Inability to collect damages doesn’t seem to be a harm.
What is a mareva injunction?
All your assets in the world are frozen.
What happened in Bradley Resources v. Kelvin Energy?
Bradley was exercising their right to dissent and sought a Mareva inunction to prevent the corporation from selling its assets. This was to insure that Bradley could have his shares bought back.
The Court lifted the injunction saying that they didn’t want the appraisal remedy to be defeated, but that lifting the injunction was in the best interest of the corporation. IN response though, the Court held that all profits from the transaction had to be held in trust for the dissenting shareholder.
Why was Mareva arguably too big in Bradley?
Jurisditional issues. If you have an Alberta judge just go to BC. There is no global issue requiring a Mareva injunction.
85956 Holdings Ltd. v. Fayerman Brothers Ltd.
Stopped filling inventory and let it sell off. Is that a sale of all the assets of the business? How does the Court come at this when they say that it is: they look at whether the business affects what it set out to do in the first place. The court says: you wrecked the business.
The test to be applied is not the amount or value of the asset; rather, the nature of the transaction.
A sale is out of the ordinary course of business when it is a sale with unusual features, given the nature of the business that the corporation has historically conducted
What is the procedure of Appraisal Rights?
1) Notice of Dissent
2) Offer to Purchase
3) Fair Value
4) Acceptance of OFfer
5) Apply to court
Who pays for the cost of an appraiser?
That is unclear. As is the burden of proof required.
Re: Wall & Redekop Corp et. al.
To value the shares of the dissident shareholders, the court may, at its discretion, appoint one or more appraisers to assist it in fixing a fair value for the shares.
Diligenti v. RWMD Kelowna Ltd
There were 4SH’s that opened two keg restaurants. One of the four SH did all the heavy work putting the restaurant together. The other 3 fired the hardworker and outsourced. The fired director brought an action because he felt he was unfairly prejudiced by the other 3.
The unfairness was they took him out and diverted the money away from him.
What is the purpose of the Oppression Remedy?
The basic intent behind s. 241 and its equivalents across Canada is to provide the sort of relief formerly provided for in applications for the winding up of the corporation without the necessity of proving that the circumstances are such that it would be just and equitable to order a winding-up, but with the power to the court, if it thinks it appropriate, to include within the relief that can then be ordered, an order for winding-up. (Diligenti)
Naneff v. Con-Crete Holdings Ltd.
The nature and scope of that order is circumscribed by the requirements that the order “rectify the matter complained of”. It must address only the aggrieved parties’ interests as corporate stakeholders. This is why the TJ’s order to wind-up the company was wrong. Rather, you must construct a remedy based upon what the aggrieved party’s expectation was.
Cohen v. Jonco et. al. MBCA
When her dividends started going down she goes to the company and says that she has a right to redeem her shares. Redeem my shares! The company says: “no”. Presumably because this would eat up all the cash that the company’s son needed to speculate on real estate. She cited the failure of the company to redeem shares, the failure to wind up, and the pledging of asses for her son’s personal loans, and failure to diversify the assets.
Reasonable expectations was that she could get her shares paid out and redeemed.
This flies in the fae lof corporate law. The son’s got voting shares. He can get the corporation to sink all the assets.
What is the test for the oppression remedy?
1) What are the reasonable expectations of the complainant?
2) Was there a breach?
3) Did it amount to unfair prejudice, oppression?
What are reasonable expectations?
“The concept of reasonable expectations is objective and contextual”
- Question of Fact
- Objective
- Not a “wish list”
- Not static.
BCE v. 1976 Debentureholders
Can a creditor have a reasonable expectation of being paid first?
No–– Stabile v. Milani ONCA.
