Removal of Director
It was Me Étienne Paradis’ hard work and effort that led to this win in favour of the Defendants, before the Honourable Justice Annie Breault of the Montréal Superior Court. Me Paradis’ victory led to the successful removal of a Director from his duties.
In this particular case, the Plaintiff and Director of the company held, together with the Defendants, shares in another corporation (hereinafter referred to as the “Third-party corporation”). More than 57% of these shares were held by our clients, the Defendants. Consequently, as majority shareholders, the Defendants had the capacity to vote in favour of the removal of the Third-party corporation’s Director.
Following the Notice of a special meeting of the shareholders, the Plaintiff sought to obtain a safeguard order so as to block his removal as Director of the Third-party corporation in which the parties conjointly held shares. The Plaintiff asked the Court to grant said motion on the grounds that (1) the Defendants were acting together in favour of their own interests but to the detriment of those of the Plaintiff and the Third-party corporation, and (2) that a safeguard order was necessary in order to prevent any future abusive or unjust conduct by the Defendants. The Plaintiff based his claims on his deteriorating business relationship with the Defendants in other projects, which aroused suspicion between the parties that there was an intention to seize the funds of the Third-party corporation and to unduly benefit from them.
The Court concluded that several criteria necessary for the approval of a safeguard order were not met, notably that of urgency, which, as Me Paradis argued, was based solely on speculation. The Court found in his favour, concluding no such urgency existed that would justify the blocking of a special meeting of the shareholders. The Court went on to explain that holding said meeting would not cause any serious and irreparable harm to the Plaintiff seeing as the latter’s claim was based solely on speculation. The special meeting of the shareholders was, therefore, maintained.
