News + Insights

On May 1, 2024, Justice Black for the Ontario Superior Court of Justice - Commercial List released reasons in a fast-moving, bitter corporate governance dispute between competing factions of the board of directors of AnalytixInsight Inc., a TSX-traded company with a market capitalization of approximately $5.3 million. 

AGB partner Robert Stellick acts for one of the individual applicants, ultimately seeking leave to commence a derivative action on behalf of the company against respondent directors alleged to have engaged in serious misconduct, including but not limited to insider tipping, material misrepresentations, self-dealing, and entering fraudulent, back-dated agreements. 

This interim motion proceeded at an extraordinary pace: eight days from the first scheduling appearance to the hearing. During this time, the parties exchanged affidavits, held cross-examinations, and prepared written argument. Robert's client, together with co-applicants, marshalled sufficient evidence to satisfy the Court that there was a reasonable basis for believing that the respondent directors and CEO had acted oppressively, dishonestly, and likely fraudulently. On that basis, they secured the appointment of an inspector, exclusion of the respondent directors from board meetings and activities, and related interim relief under to ss. 161 and 248 of the OBCA. Robert's advocacy and his client's evidence ultimately proved essential to the success of their non-majority faction on this motion. 

Justice Black's reasons provide helpful direction on the appropriate remedies and the paths to those remedies when corporate directors are jostling for control of a company.