Mr. Hacio

The plaintiffs brought a motion for leave to appeal an interlocutory order that declined to appoint independent counsel for the corporate plaintiff in a shareholder dispute.

The court found that the moving parties failed to establish conflicting decisions or good reason to doubt the correctness of the order.

The motion for leave to appeal was dismissed with costs.

In a corporate governance dispute among shareholders and directors of closely held corporations, the individual plaintiffs moved for an order appointing independent counsel to oversee and control the corporate plaintiffs.

The applicants argued that independent counsel was necessary to represent the corporations’ interests where conflicts existed between shareholders and directors.

The court held that appointing independent counsel would add cost and delay while providing no practical benefit, particularly because the corporate claims had been stayed and any counsel would require instructions from directors who were defendants in the litigation.

The court concluded that such counsel would face an unavoidable conflict of interest and could not act effectively.

The motion was therefore dismissed.

In a shareholder dispute, the moving defendants sought to remove the plaintiffs' counsel, Hacio Law, alleging a conflict of interest between the individual plaintiffs and the corporate plaintiffs.

The defendants also sought to stay the action, arguing the corporate plaintiffs did not authorize its commencement.

The court ordered Hacio Law removed as counsel for the corporate plaintiffs (on consent) but declined to remove them as counsel for the individual plaintiffs, finding no risk of misuse of confidential information.

The court stayed the action as against the corporate plaintiffs only, as the former directors lacked authority to instruct counsel on their behalf.