Court File and Parties

Court File No.: CV-22-00679459-0000 Date: 2023-07-04 Ontario Superior Court of Justice

Application under s. 248 of the Business Corporations Act, R.S.O. 1990, c. B.16 as amended.

Between: Michelle Gojkovich, Applicant And: Buhbli Organics Inc., Organic Products Consulting Inc. and John Rody, Respondents

Counsel: Stephen Schwartz and Darren Marr for the Applicant Shayan Kamalie for the Respondents

Heard: July 4, 2023

Before: Perell, J.

Reasons for Decision

[1] This is an oppression remedy application pursuant to Ontario’s Business Corporations Act. The Applicant, Michelle Gojkovich, and the Respondent, John Rody, are the co-owners of the Respondent, Buhbli Organics Inc. Mr. Rody is the owner of the Respondent Organic Products Consulting Inc., which provides consulting services solely for Buhbli Organics.

[2] By a proceeding by application, Ms. Gojkovich sues the Respondents for an oppression remedy pursuant to s. 248 of the Ontario Business Corporations Act or, in the alternative, for the winding up of Buhbli Organics pursuant to s. 207 of the Act.

[3] By reasons for decision released on May 9, 2023, Gojkovich v. Buhbli Organics Inc., 2023 ONSC 2738, I granted Ms. Gojkovich’s application as follows:

a. It is declared that Ms. Gojkovich has been treated by the Respondents in a manner that is oppressive, unfairly prejudicial to and which unfairly disregards her rights as a shareholder in Buhbli Organics.

b. It is declared that it is just and equitable for reasons, other than the bankruptcy or insolvency of the corporation, that it should be wound up.

c. It is ordered that Buhbli Organics shall forthwith be wound up in accordance with the provisions of the Ontario Business Corporations Act.

d. I shall remain seized of this Application until the completion of the winding up or further Order of this court.

e. It is ordered that Ms. Gojkovich shall within twenty days nominate a liquidator to wind up Buhbli Organics and the motion for the appointment of the liquidator and to settle the terms of the winding up shall be heard on June 20, 2023.

f. It is ordered that pending the appointment of the liquidator that Mr. Rody shall have control of the business and assets of Buhbli Organics and shall carry on business acting in the best interest of the Buhbli Organics and in accordance with his obligations under the Ontario Business Corporations Act.

g. The Respondents shall: (a) within twenty days disclose by sworn affidavit the amount of remuneration, compensation, and/or revenue paid to or received by Mr. Rody from Buhbli Organics and Organic Products Consulting by any means, including salaries, dividends, consulting contracts, loan advances, repayment of shareholder’s loans, sale of shares, sale of assets, etc. for the period from January 2022 to date; and (b) pay the equivalent sum to Ms. Gojkovich within thirty days.

h. If the Respondents fail to make the aforesaid disclosure or pay the aforesaid equivalent remuneration, compensation, and/or revenue paid to Mr. Rody, then the Respondents are jointly and severally liable to pay Ms. Gojkovich $170,000 within forty days and judgement shall issue accordingly.

i. The Respondents shall pay the costs of this application on a substantial indemnity basis.

j. If the parties cannot agree about the matter of costs payable to Ms. Gojkovich for this application, they may make submissions in writing beginning with Ms. Gojkovich’s submissions within twenty days of the release of these Reasons for Decision followed by the Respondents’ submissions within a further twenty days.

[4] After I made my various Orders, the Respondents did not disclose by affidavit the amount of remuneration, compensation and/or revenue paid to or received by Mr. Rody from Buhbli Organics and Organic Products Consulting for the period January 2022 to date and they have not paid the equivalent sum to Ms. Gojkovich within thirty days.

[5] For those eventualities of non-payment, I held that the Respondents are jointly and severally liable to pay Ms. Gojkovich $170,000 within forty days and that judgment shall issue accordingly.

[6] Since the payments to Ms. Gojkovich were not made, the judgment shall be issued.

[7] The purpose of today’s hearing is to appoint a liquidator.

[8] The Respondents submit, however, that the hearing should not proceed. The Respondents have appealed my decision to the Divisional Court, and on June 29, 2023, they served a motion to stay the liquidation process pending the outcome of the appeal. The Respondents submit that the motion to appoint a liquidator ought to be heard after the motion to stay has been heard.

[9] I disagree with this submission. The appointment of the liquidator is part and parcel with the Order I made that is the subject of the appeal. All the Orders should be before the Divisional Court on the stay motion and on the appeal regardless of whether the stay motion is granted or dismissed. I shall proceed to appoint a liquidator.

[10] After, I made my various orders, Ms. Gojkovich nominated MNP Ltd. as liquidator.

[11] On May 17, 2023, MNP Ltd. prepared a written proposal to act as liquidator. In its written proposal MNP lists its qualifications to act as Court-appointed liquidator and describes its proposed engagement.

[12] Ms. Gojkovich submits that MNP Ltd. is qualified to act as liquidator of Buhbli Organics and should be appointed by the Court.

[13] Without suggesting an alternative, the Respondents oppose the appointment of MNP Ltd., mainly because of the costs associated with paying for its services. It appears, however, that MNP Ltd. is charging market rates, and it also appears that the principals of the firm with carriage of the liquidation are well experienced and qualified to carry out the court’s mandate.

[14] I, therefore, appoint MNP Ltd. as liquidator.

[15] Ms. Gojkovich provided the court with a draft order, which is attached as Schedule “A”. This Order shall issue with two changes:

a. The references to “ the “ Sales Officer ” shall be changed to “the Liquidator ”;

b. Paragraph 19 shall be deleted.

[16] Orders accordingly.

Perell, J.

Released: July 04, 2023

Schedule "A"

Court File No.: CV-22-00679459-0000 Ontario Superior Court of Justice

The Honourable Justice Perell, the 4th day of July, 2023

Between: Michelle Gojkovich, Applicant And: Buhbli Organics Inc., Organic Products Consulting Inc. and John Rody, Respondents

Application Under Section 248 of the Business Corporations Act, R.S.O. 1990, Chapter B.16, as Amended

Order

THIS APPLICATION made by Michelle Gojkovich for, among other things, order for oppression remedy concerning Buhbli Organics Inc. and Organic Products Consulting Inc. pursuant to section 248 of the Business Corporations Act, R.S.O. 1990, c. B-16, as amended, and orders for oppression remedies was heard on April 18, 2023 via videoconference, with the decision reserved until this day.

ON READING the various affidavits of the parties and the exhibits thereto, the transcripts from cross-examinations, the facta and compendiums, and on hearing submissions of counsel for the parties,

Appointment of Liquidator

1. THIS COURT ORDERS that _________________________ is hereby appointed liquidator as an officer of the Court (the “ Liquidator ”) to carry out a process for the sale of the business and assets of Buhbli Organics Inc. (collectively, the “ Company ”).

2. THIS COURT ORDERS that the Liquidator is not and shall not be deemed to be a receiver as defined in the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the “ BIA ”) and shall not be required to provide notice of its appointment or any statement or reports in accordance with sections 245 and 246 of the BIA.

3. THIS COURT ORDERS that the Liquidator shall take no part whatsoever in the management or supervision of the management of the businesses of the Company and shall not, by fulfilling its obligations hereunder, be deemed to have taken or maintained possession or control of the Company or its property, or any component thereof.

4. THIS COURT ORDERS that the Company shall remain in control of its business and assets and shall continue to carry on business under the management of the Respondent, John Rody, acting in the best interest of the Company pending the sale of the business or assets of the Company.

Liquidator’s Powers

5. THIS COURT ORDERS that the Liquidator is hereby empowered and authorized to do any of the following where the Liquidator considers it necessary or desirable:

a) prepare a plan for the sale of the Company for approval by this Court (the “ Sale Plan ”);

b) review all of the Company’s assets and liabilities and make inquiries as to any security, rights, claims or other interests asserted in, to or against the Company and its assets;

c) engage legal counsel, consultants, appraisers, agents, experts, auditors, accountants, managers, and such other persons from time to time and on whatever basis, including on a temporary basis, to assist with the exercise of the Liquidator's powers and duties conferred by this Order and any further Order of the Court;

d) engage a recognized agent in the sale of the Company to assist in the Sale Plan;

e) have full and complete access to the Company, including the premises, employees, consultants and advisors, books, records, data, including data in electronic form, and other financial documents of the Company, wherever located, to the extent that is necessary or desirable to perform the Liquidator’s duties arising under this Order;

f) report to this Court at such times and intervals as the Liquidator may deem appropriate with respect to the Sale Plan, the implementation of the Sale Plan, and all such related matters as the Liquidator deems appropriate;

g) have full and complete authority to direct the settlement of any and all debts, accounts and claims made by or against the Company;

h) take any steps reasonably incidental to the exercise of these powers or the performance of any statutory obligations; and

i) perform such other duties as are required by this Order or by this Court from time to time, and in each case where the Liquidator takes any such actions or steps, it shall be exclusively authorized and empowered to do so, to the exclusion of all other Persons (as defined below), including the Company, and without interference from any other Person.

6. THIS COURT ORDERS that the Company shall be entitled to pay all expenses incurred by it in carrying on its business in the ordinary course. Effective April 18, 2023, the Company shall not make any out of the ordinary course payments without the prior written approval of the parties and the Liquidator or further order of this Court.

Limitation on Liquidator’s Liability

7. THIS COURT ORDERS that nothing in this Order shall be construed as resulting in the Liquidator being an officer, director, employer, successor employer, responsible person or operator within the meaning of any statute, regulation or rule of law, or equity for any purpose whatsoever.

8. THIS COURT ORDERS that, in addition to the rights and protections afforded the Liquidator as an officer of this Court, the Liquidator, its officers, directors, employees and agents, shall incur no liability or obligation as a result of its appointment or the carrying out of the provisions of this Order or any future Order of the Court, save and except for any gross negligence or willful misconduct on its part. Nothing in this Order shall derogate from the protections afforded the Liquidator as an officer of the Court pursuant to this Order, and any applicable legislation, at common law or otherwise.

Duty to Provide Access and Co-operation to the Liquidator

9. THIS COURT ORDERS that (i) the Company, (ii) all of its current and former directors, officers, employees, dependent or independent contractors, agents, accountants, legal counsel and shareholders, and all other persons acting on its instructions or behalf, and (iii) all other individuals, firms, corporations, governmental bodies or agencies, or other entities having notice of this Order (all of the foregoing, collectively, being " Persons " and each being a " Person ") shall forthwith advise the Liquidator of the existence of any property owned by the Company in such Person's possession or control, and shall, upon request of the Liquidator, grant immediate and continued access to the Company to the Liquidator.

10. THIS COURT ORDERS that all Persons shall forthwith advise the Liquidator of the existence of any books, documents, securities, contracts, orders, corporate and accounting records, and any other papers, records and information of any kind related to the businesses or affairs of the Company, wherever located, and any computer programs, computer tapes, computer disks, or other data storage media containing any such information (the foregoing, collectively, the " Records ") in that Person's possession or control, and shall provide to the Liquidator or permit the Liquidator to make, retain and take away copies thereof and grant to the Liquidator unfettered access to and use of accounting, computer, software and physical facilities relating thereto, provided however that nothing in this paragraph 10 or in paragraph 11 of this Order shall require the delivery of Records, or the granting of access to Records, which may not be disclosed or provided to the Liquidator due to the privilege attaching to solicitor-client communication or due to statutory provisions prohibiting such disclosure.

11. THIS COURT ORDERS that if any Records are stored or otherwise contained on a computer or other electronic system of information storage, whether by independent service provider or otherwise, all Persons in possession or control of such Records shall, upon request by the Liquidator, forthwith give unfettered access to the Liquidator for the purpose of allowing the Liquidator to recover and fully copy all of the information contained therein whether by way of printing the information onto paper or making copies of computer disks or such other manner of retrieving and copying the information as the Liquidator in its discretion deems expedient, and shall not alter, erase or destroy any Records without the prior written consent of the Liquidator. Further, for the purposes of this paragraph, all Persons shall provide the Liquidator with all such assistance in gaining immediate access to the information in the Records as the Liquidator may in its discretion require including providing the Liquidator with instructions on the use of any computer or other system and providing the Liquidator with any and all access codes, account names and account numbers that may be required to gain access to the information.

PIPEDA

12. THIS COURT ORDERS that, pursuant to clause 7(3) (c) of the Personal Information Protection and Electronic Documents Act, the Liquidator shall disclose personal information of identifiable individuals to prospective purchasers or bidders for the Company and to their advisors, but only to the extent desirable or required to negotiate and attempt to complete one or more sales of the Property (each, a " Sale "). Each prospective purchaser or bidder to whom such personal information is disclosed shall maintain and protect the privacy of such information and limit the use of such information to its evaluation of the Sale, and if it does not complete a Sale, shall return all such information to the Liquidator, or in the alternative destroy all such information. The purchaser of any Property shall be entitled to continue to use the personal information provided to it, and related to the Property purchased, in a manner which is in all material respects identical to the prior use of such information by the Company, and shall return all other personal information to the Liquidator, or ensure that all other personal information is destroyed.

Liquidator's Accounts

13. THIS COURT ORDERS that the Liquidator and its legal counsel shall be paid their reasonable fees and disbursements by the Company, in each case at their standard rates and charges, as part of the costs of these proceedings. The Liquidator and its legal counsel shall render their accounts to the Company from time to time, and such accounts shall be paid within 7 days of their receipt. Such payments shall constitute advances against the remuneration and disbursements of the Liquidator and its legal counsel when and as approved by this Court.

14. THIS COURT ORDERS that the Liquidator its legal counsel shall pass their accounts from time to time, and for this purpose the accounts of the Liquidator and its legal counsel Officer are hereby referred to a judge of the Ontario Superior Court of Justice.

General

15. THIS COURT ORDERS that the Liquidator may from time to time apply to this Court for advice and directions in the discharge of its powers and duties hereunder.

16. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal, regulatory or administrative body having jurisdiction in Ontario to give effect to this Order and to assist the Liquidator and its agents in carrying out the terms of this Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully requested to make such orders and to provide such assistance to the Liquidator, as an officer of this Court, as may be necessary or desirable to give effect to this Order or to assist the Liquidator and its agents in carrying out the terms of this Order.

17. THIS COURT ORDERS that the Liquidator be at liberty and is hereby authorized and empowered to apply to any court, tribunal, regulatory or administrative body, wherever located, for the recognition of this Order and for assistance in carrying out the terms of this Order, and that the Liquidator is authorized and empowered to act as a representative in respect of the within proceedings for the purpose of having these proceedings recognized in a jurisdiction outside Canada.

18. THIS COURT ORDERS that all proceeds generated by the Sale Plan shall be held by the Liquidator in trust and shall not be distributed to any party pending further Order of this court made with notice to all parties.

19. THIS COURT ORDERS that any interested party may apply to this Court to vary or amend this Order on not less than seven (7) days' notice to the Liquidator and to any other party likely to be affected by the order sought or upon such other notice, if any, as this Court may order.