Frank Bowman

Schonfeld Inc., acting as a court-appointed Monitor and Receiver, sought to dismiss an action commenced against it by the monitored parties for alleged failure to engage in tax planning.

The monitored parties commenced the action without obtaining leave of the court and subsequently brought a motion for leave nunc pro tunc.

The court held that leave was required under the terms of the Monitor and Receiver Orders.

The court refused to grant leave nunc pro tunc, finding that the proposed claim lacked foundation because the Receiver's mandate did not include tax planning, and the pleadings failed to establish gross negligence or wilful misconduct as required to overcome the Receiver's discharge and release.

The action and a related crossclaim were dismissed.

The plaintiffs and defendants, two brothers and their respective holding companies, engaged in a complex corporate divorce involving a transportation business, ProNorth.

The court determined that the brothers were equal 50/50 shareholders in the holding company, rejecting the defendant's claim of a 62/38 split.

The court found the defendant brother engaged in oppressive conduct by wrongfully excluding the plaintiff from a shareholders' meeting and removing him as a director.

As a remedy, the court ordered the defendant to purchase the plaintiff's shares at a fair value of $4,455,000, based on an en bloc valuation of $8.91 million.

The court also resolved disputes over several jointly owned properties, ordering the defendant to purchase the plaintiff's interests in properties used by the business, and directing the partition and sale of others.

The court awarded the plaintiff $180,000 in damages for exclusion from management, offset by $105,000 awarded to the company for the plaintiff's wrongful detention of a corporate aircraft.

Finally, the court found the company's accountant breached his fiduciary duty to the plaintiff by swearing an affidavit contrary to the corporate records, awarding nominal damages of $100.