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Director found personally liable for oppression after misappropriating funds and failing to produce financial statements; receiver appointed.
The applicant, a 30% shareholder, brought an application for oppression against the respondent corporation and its sole director.
The director failed to produce audited financial statements, breached multiple court orders, and misappropriated millions in corporate funds for personal use.
The court found the director's conduct to be oppressive and imposed personal liability.
A receiver was appointed, and the court set a rough buyout value for the applicant's shares at $3,993,750, giving the parties options to accept the valuation or have the receiver conduct a formal valuation.
The court ordered disclosure of foundational documents and retainers for expert reports relied upon for ex parte orders, but upheld litigation privilege for internal drafts.
The defendants brought a motion seeking orders to compel answers to refused questions and production of documents related to forensic accounting reports (Tartis and Crowe Soberman) and a digital forensic investigation (Duff and Phelps), as well as miscellaneous accounting and financial records.
The court largely granted the defendants' requests, ordering disclosure of foundational documents and retainers for the Tartis and Crowe Soberman reports, compelling answers to undertakings given by Filipowicz (Duff and Phelps) where no timely objection to cost was made, and requiring the plaintiffs to produce general ledgers, trial balances, financial statements, and bank statements at their expense.
However, the court upheld litigation privilege for internal drafts and notes of the reports, finding no evidence of improper conduct to warrant an exception.
