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AGB Partner, Jordan Katz, wins highly contentious oppression fight

On February 1, 2024, Justice Osborne for the Ontario Superior Court of Justice - Commercial List issued his endorsement in Melia v. blueRover Inc., a case involving competing, highly contentious oppression applications. Justice Osborne granted AGB's clients wide-ranging relief and dismissed the counter-application against them.

Jordan Katz acted for the wholly successful applicants, obtaining declarations validating their contested shareholdings, declaring that the respondent CEO had caused the subject Company's business and affairs to be carried out oppressively, and removing the respondent as director and CEO of the Company. Justice Osborne's endorsement can be viewed here

Key takeaways for lawyers from Justice Osborne's reasons include:

  1. The removal of a director or officer for oppressive conduct is rare, but possible on the right facts. In this case, the respondent director was found principally responsible for the acrimony and confrontation present in the company, and his conduct was found to justify his removal as a director and officer.
  2. In contests over corporate control, it is important for your clients to be (and to be seen as) good corporate stewards. Find ways for your clients' self interest to align with the interests of the company and its stakeholders. In this case, AGB's clients sought the appointment of a monitor on an urgent interim basis at the outset of the proceedings, reflecting their commitment to ensuring there was proper, independent oversight pending resolution of the "fight" between the parties. 
  3. Building the record in oppression cases is critical. The record-keeping and correspondence maintained by AGB's clients and corporate counsel made all the difference on contested factual issues, in what otherwise would have been a pure credibility dispute about the legitimacy and validity of certain share issuances and other corporate decisions.

As mentioned above, in advance of the hearing of this application on its merits, AGB secured the interim appointment of a Monitor and related relief, including an order restricting the roles and responsibilities of the respondent CEO, to "restore some degree of normalcy with blueRover's banking operations on an urgent basis and to facilitate a functioning business atmosphere" pending resolution of the competing oppression applications on their merits. Justice Osborne's endorsement appointing the interim Monitor can be viewed here.