Thursday, February 07, 2002
Published in Magazine:
Monday, July 01, 2002
Unique Broadband Systems, Inc. (UBS), a public company, was considering a merger transaction. The founding shareholder brought an oppression and conspiracy claim against the independent directors on the basis that the proposed transaction was intended to dilute the shareholdings of the founding shareholder prior to a proxy battle against the independent directors at the upcoming annual shareholder’s meeting. The founding shareholder was successful in obtaining an order that prohibited the company from entering into any transaction of substance unless the founding shareholder or any other interested party had an opportunity to seek further direction or order of the court. The independent directors obtained an adjournment of the upcoming annual shareholders’ meeting pending an expedited trial of issues raised by both the founding shareholder and the independent directors.
On February 7, 2002, midway through the examinations for discovery, the independent directors and the founding shareholder settled. Pursuant to the settlement, the independent directors and the founding shareholder exchanged releases and the company and the independent directors agreed not to oppose the slate of directors supported by the founding shareholder at the annual shareholders’ meeting. That slate was elected at the meeting by an overwhelming majority and defeated a rival slate put forward by an unrelated party.
UBS’s founding shareholder, Alex Dolgonos, was represented by Joseph Groia and Alistair Crawley of Groia & Company, together with Wendy Berman and Kip Daechsel of Heenan Blaikie LLP. UBS sought advice from Alan Mark and Allan Goodman of Goodmans LLP.
Cliff Lax, Q.C., and Rocco DiPucchio of Lax O’Sullivan Scott LLP represented a shareholder committee. The independent directors, including John Turner of Miller Thomson LLP, and William Rogers of Arnold & Porter in Washington, D.C., were represented by Jon Levin and Richard Johnston (corporate) and Robert Harrison, Peter Downard and Richard Swan (litigation) of Fasken Martineau DuMoulin LLP.