Court decision in Dare Foods rejects heiress’ claim to oppression remedy
A recent story online discusses the dispute between Dare Foods heiress Carolyn Dare-Wilfred and her brothers, Bryan Dare and Graham Dare. Dare Foods dates back almost 120 years to when Charles Doerr started making biscuits in his neighborhood grocery store. His grandson, Carl Dare took over the business in the 1940s. Over the years the company has expanded to over 50 countries around the world and has annual sales of over $300 million. Some of the products it sells include Breton Crackers and various candies under the company name. Carl Dare passed away in 2014 at the age of 96. Apparently, he had hoped to keep the shares in the family. He had also hoped that if one of his children tried to sell his or her shares, the other siblings would be able to buy them first.
The shareholder agreement did not have a shotgun clause to match Carl Dare’s intention to enable his children to purchase a sibling’s shares first.
In 2014, Ms. Dare-Wilfred attempted to sell her shares to her brothers for $55 million. They refused. As a result, in 2015 Ms. Dare-Wilfred commenced litigation against her brothers, their holding companies and the holding company for Dare Foods.
She alleged that her brothers’ refusal to purchase her shares, combined with a lack of interest from third parties resulted in her shares being held hostage at a time when she needed money.
Ms. Dare-Wilfred sought to have a third party appointed by the Court to determine the value of her shares and order her brothers to buy them at that price. Relief was also sought under the Ontario Business Corporations Act oppression remedy.
Decision of Madam Justice Barbara Conway
Bryan Dare’s and Graham Dare’s position was that they were not interested in buying Ms. Dare-Wilfred’s shares. They did not want to burden the business with debt and they did not have the money to purchase the shares. Furthermore, the shareholder agreement in place did not have a shotgun buy-sell clause. There was no obligation on the siblings to buy shares if any one of them wanted to sell.
Justice Conway also considered submissions by Ms. Dare-Wilfred with respect to her financial situation. She and her husband, Harmon Wilfred, moved to New Zealand in 2001. They invested in several businesses between 2001 and 2014. Some of their businesses were heavily damaged in the Christchurch earthquake in 2009 and failed. Ms. Dare-Wilfred was in need of money.
Justice Conway found that Ms. Dare-Wilfred’s financial circumstances were in no way attributable to actions taken by the Defendants.
As a result, her brothers did not have to purchase her shares.
It will be interesting follow this matter and to see if it is going to be appealed.
More on this story here.