Lawyer for the head of the Rogers Family Trust says his client had the right to remove and replace five directors without a shareholder meeting, but a lawyer who represents opposing family members argues that this is a simplistic interpretation of corporate laws in British Columbia.
Stephen Schachter, attorney for Edward Rogers’ mother and two sisters, who are members of the board, told a British Columbia Supreme Court judge on Monday that the “ordinary resolution” states that the revocation or the election of directors must take place at a meeting in which shareholders are entitled to participate.
He said this was part of the long-standing public commitment to a strong corporate governance practice by Toronto-based Rogers Communications Inc., which is incorporated in British Columbia.
“He can’t laugh at due process,” Schachter said of Edward Rogers, who was not in court. “It is a publicly traded company.”
However, Ken McEwan, an attorney for Edward Rogers, told Judge Shelley Fitzpatrick earlier that his client had the power to make this decision under an “ordinary resolution” of the board of directors, as the trust controls 97.5% of the shares of Rogers Communications.
“This is the default resolution method throughout the (BC Corporations) Act,” McEwan told Fitzpatrick, who adjourned the case until Friday.
Schachter said the company specifically rejected vacant board director positions outside of a meeting.
“This is background information relevant to Your Excellency to know that the public engagements of the company, signed by Edward, do not comply with the one-day written resolution to remove and replace independent directors.” Schachter told Fitzpatrick, who must decide whether the newly formed council is valid.
The son of the company’s founder, the late Ted Rogers, claimed in an affidavit that he had the authority to terminate and appoint board members because he is chairman of the Rogers Control Trust, which caused the feud with her mother Loretta Rogers and her sisters Melinda Rogers. Hixon and Martha Rogers.
They are the respondent in the case and argue that the board he appointed is illegitimate and that the only valid board is the one that existed before his changes.
But McEwan said the respondent was seeking to “misrepresent the fact” that the case concerns the exercise of shareholder rights.
“He has filed evidence of what he claims to be best practices in corporate governance in Canada for the purpose of restricting or influencing the statutory rights of shareholders,” he said.
“The respondent appears to distract from the simplicity of the matter in court to the extent that he attempts to invoke the rights of the minority shareholders, suggesting that they are in jeopardy.”
David Conklin, an attorney for Rogers Communications, said any removal or replacement of directors from the Rogers Communications board should have been made public in order to inform all shareholders of decisions to vote at a meeting on the issue. governance or buying or selling stocks.
He said the company depended on all stakeholders, including those who make up 70% of the non-voting Class B shareholders of the listed company. Regular practice involving a change in governance would involve a meeting notice to the 30 percent of Class A shareholders, who would be notified of what they were asked to do and why, Conklin said.
However, shareholders were given three or four lines of explanation that “there was a disagreement” leading to Edward Rogers’ decision to replace the independent directors on the board.
“It is not compatible with the environment in which Rogers operates,” he said.
Conklin said that Edward Rogers’ actions also contrasted with a “memorandum of wishes” from Ted Rogers, who “actually anticipated these events” before his death in 2008.
McEwan said the late Patriarch’s document had so far been treated as confidential, would not pass a legal test and was not known to all shareholders.
“The only time this has become a public matter is when it was filed by management,” he said of documents filed in court on Friday by Ted Rogers’ wife Loretta Rogers. .
The dispute has left the telecommunications company with two boards of directors each claiming to be in power and has publicly pitted members of the Rogers family against each other in negotiations to buy rival Shaw Communications Inc. for 26 billion dollars, pending regulatory approval.
Loretta Rogers said in an affidavit that the decision to overthrow her son as chairman of the board was extremely difficult for her and other family members after weeks of trying to work with him.
The family matriarch said she disagreed with her son’s description of the facts in his affidavit and was misled as to why he wanted to fire CEO Joe Natale, who learned “by accident” that he had to be replaced by the CFO.
Loretta Rogers said she did not agree with “her son’s personal opinion that he has the right to exploit his position as chairman of the controlling trust to circumvent Ted’s wishes, interests members of the Rogers family and the governance structure that has enabled Rogers to become a successful public enterprise, despite family control. “
This report by The Canadian Press was first published on November 1, 2021.