If Yellow Media, which has the legal right to convert Pref A into about 13 shares, instead decides to pay out $250 million that it has no need to pay out, the directors of the company should expect to be sued. This would be a gross dereliction of their duty.

 

The claim is a Derivative Action filed by any shareholder which when deemed meritorious by a Judge (? see below) becomes an action YLO commences against the Directors and other named parties. The legal fees are paid by YLO which means any number of large Montreal firms would be willing to file the claim.

 

1

Royal Bank of Canada v. 9096-3406 Québec Inc., Daniel Pauzé, Stéphane Lévesque

Daniel Pauzé is president and sole director and shareholder of 9096-3406 Québec Inc. (“9096”), a company doing business under the name Piscines Daniel Pauzé. 9096 has a bank account with the Royal Bank located on Dagenais Boulevard in Laval.

Pauzé has cashed 3 cheques issued by Centre d’accueil St. Margaret to Stéphane Lévesque. He remitted the amounts to Lévesque, less a commission, by bank drafts on the account of 9096. Pauzé alleges that he did so to accommodate Lévesque and that he did not know that the cheques were fraudulent.

The bank is claiming reimbursement of $149,580.78 from 9096 and Pauzé. The latter have filed a cross demand.

The Court finds 9096 contractually liable according to the provisions of the Business Services Agreement, as well as extra-contractually liable for its acts.

The Court also finds Pauzé extra-contractually liable. His faulty conduct reveals gross negligence and he is to be held jointly and severally liable with 9096 for damages sustained by the Royal Bank.

The Court dismisses the cross demand.

Royal Bank of Canada v. 9096-3406 Québec Inc., Daniel Pauzé, Stéphane Lévesque, 2006 QCSC 5127, Superior Court, 500-17-018701-030, 13 October 2006, Honourable Justice Silcoff.

2

Paul Simard, Pierre Simard, v. Moisan et al.

Paul and Pierre Simard each hold approximately 4,5% of the share capital of Investissements Calnar Inc. (previously SPB Canada Inc.) (“ Calnar”). They filed an introductory motion for oppression and a derivative action against the defendants. Some of the defendants have filed a motion for dismissal.

MM. Simard are asking the Court to authorize them to file a derivative action. They allege the refusal of the mises en cause companies to file such proceedings to end the abusive conducts of defendants.

The Court indicates that the difficulty lies in determining if such an authorization is required, as federal and Québec statutes are different. Under section 239 C.B.C.A., such an authorization is necessary. On the other hand, Québec statutes do not expressly require such an authorization.

The Court indicates that, following certain case law, the Québec Courts now model oppressive remedies for provincial companies on those provided by the C.B.C.A. Other cases indicate that the authorization required under federal law is not required under Québec law.

The Court concludes that the exercise of a derivative action under Québec law, similar to the oblique action of Article 1627 C.C.Q., does not require the authorization of the Court.