Landlord for Whistler, Surrey brewpubs may face corporate shakeup after court ruling
A dispute between shareholders of a B.C. numbered company that serves as a landlord for two well-known brewpubs has ended up in court.
A decision issued in B.C. Supreme Court last week and posted online Friday found that a 1996 agreement between shareholders in 471469 B.C. Ltd. – the landlord for High Mountain Brewing in Whistler and Big Ridge Brewing in Surrey – is still valid and binding on the current shareholders.
That means a notice from one of the company's owners invoking the agreement's so-called "shotgun clause" was legitimate – according to Justice Jan Brongers' decision – and the other owners will likely have to either sell their shares for $13.5 million or buy the first owner's shares for the same price.
The dispute over the numbered company arose from a disagreement between the two families that own it.
Since 2004, the company has been owned exclusively by members of the James and Wolverton families and entities controlled by them.
Triple F Investments Ltd. – a company "effectively owned and controlled by Mark James and members of his family," according to Brongers' decision – owns 50 per cent of the shares of the numbered company.
Wolverton Pacific Partnership – a company owned by brothers Brent and Mark Wolverton and Pacific Investment Corporation Limited, of which Brent Wolverton is CEO – owns 25 per cent of the shares. The remaining 25 per cent are owned by Pacific Investment directly, or by other members of the Wolverton family or entities controlled by them.
"The relationship between the James and Wolverton families regarding the company and its Whistler and Surrey brewpub restaurant businesses appears to have been a positive and cooperative one for many years," wrote Brongers in his decision.
"Furthermore, the two families also have a shared interest in a third brewpub restaurant located in Vancouver's Yaletown district."
The trouble arose in the spring of this year, however, according to Brongers. The judge wrote in his decision that Mark James and the Wolverton brothers disagreed about how to pay for structural repairs needed to the company's Whistler building.
James proposed that the two families jointly loan the numbered company the funds required to complete the project, or that Triple F provide the full amount of the loan at a "favourable rate," provided that the loan was secured by a mortgage.
"The Wolverton brothers responded to Mark James that they consider this proposal to be an ineffective 'Band Aid' solution to the company's problems, and that they are opposed to both the provision of operating loans by either party, as well as to encumbering the Company's assets any further," Brongers wrote.
"Instead, the Wolverton brothers proposed to Mark James that they discuss more broadly a new plan for moving forward with respect to all of the real estate, tenants, leases, management, and overhead issues relating to their shared restaurant brewpub businesses."
According to the court decision, James told the brothers he felt their proposal wouldn't solve the immediate need for funding to pay for construction and the Whistler building's mortgage. He again proposed a loan from Triple F to the numbered company and, when the brothers rejected this proposal, sent them notice that he intended to invoke the shotgun clause.
The brothers, through Wolverton Pacific Partnership, took Triple F to court. They argued that the 1996 agreement was no longer valid because 25 per cent of shares have changed hands since the agreement was signed and because the company's current shareholders "have behaved in a way that indicates that they no longer feel bound" by it.
Brongers rejected these arguments, writing in his decision that "abandonment" of a contract only occurs – in legal terms – if the conduct of the parties amounts to a new contract in which they agree to abandon the old one.
"No such intention has been shown to exist here," the judge wrote, adding that the argument that the change in shareholders invalidates the 1996 agreement was "without merit."
"I was not shown any authority that supports the novel proposition that a shareholders’ agreement ceases to be valid simply because one of its signatories no longer holds shares in the corporation, or because non signatories subsequently acquire some of its shares," he wrote.
Brongers also rejected Wolverton Pacific's argument that the necessary conditions for triggering the agreement's shotgun clause had not been met, and dismissed the company's petition, awarding court costs to Triple F.
CTVNews.ca Top Stories
BREAKING American millionaire Jonathan Lehrer denied bail after being charged with killing Canadian couple
American millionaire Jonathan Lehrer, one of two men charged in the killings of a Canadian couple in Dominica, has been denied bail.
Police make arrests in grandparent scam that defrauded victims out of $739K
Ontario Provincial Police say they have 'disrupted' an organized crime group that allegedly used an emergency grandparent scam to defraud seniors across Canada out of hundreds of thousands of dollars.
Motion to allow keffiyehs at Ontario legislature fails
A motion to reverse a ban on the keffiyeh within Queen’s Park failed to receive unanimous consent Thursday just moments after Ontario Premier Doug Ford reiterated his view that prohibiting the garment in the House is divisive.
Trend Line Anger, pessimism towards federal government reach six-year high: Nanos survey
Most Canadians in March reported feeling angry or pessimistic towards the federal government than at any point in the last six years, according to a survey by Nanos Research.
Lack of detention space could force CBSA to release detainees, internal memo warns
The Canada Border Services Agency is scrambling to find space to hold high-risk detainees that are set to be transferred from provincial jails in June.
BREAKING Allman Brothers Band co-founder and legendary guitarist Dickey Betts dies at 80
Guitar legend Dickey Betts, who co-founded the Allman Brothers Band and wrote their biggest hit, 'Ramblin' Man,' has died. He was 80.
Taylor Swift's new album allegedly 'leaked' on social media and it's causing a frenzy
A Google Drive link allegedly containing 17 tracks that are purportedly from Swift's eagerly awaited "The Tortured Poets Department" album has been making the rounds on the internet in the past day and people are equal parts mad, sad and happy about it.
What does it mean to be 'house poor' and how can you avoid it?
The journey to home ownership can be exciting, but personal finance columnist Christopher Liew warns about the trappings of becoming 'house poor' -- where an overwhelming portion of your income is devoured by housing costs. Liew offers some practical strategies to maintain better financial health while owning a home.
Calgary man charged with manslaughter in death of toddler
Calgary police say Winston Campbell, 45, has been charged in the death of a two-year-old girl in 2022.