This addendum to a judgment determined the transaction structure for a court-ordered share purchase as an oppression remedy.
The individual plaintiff, Ms. Murray, a 9.1% shareholder in Pier 21, had been found to be oppressed, and the defendants were ordered to purchase her shares for $39.3 million.
Ms. Murray held her shares through a holding company (2327342 Ontario Inc.) and sought to minimize her tax liability by having the individual defendant, Mr. Star, or his holding company, purchase the shares of her holding company (Option One).
Mr. Star argued for Pier 21 to repurchase its shares from Ms. Murray's holding company for cancellation (Option Two).
The court found that Option One was not in accord with Ms. Murray's reasonable expectations, considering her prior share sales in 2012 where Pier 21 repurchased shares from her holding company for cancellation.
The court also noted that Option One would impose potential unknown liabilities and significant advisory costs on the defendants, risks not present in Option Two.
The court ordered the share purchase to proceed under Option Two, requiring Pier 21 to repurchase its shares from Ms. Murray's holding company for cancellation.