Two equal 50% shareholders in a lakeside condominium development project in Burlington, Ontario (Nautique Lakefront Residences) sought court guidance on separating their partnership following an acrimonious impasse.
The applicant, an investor providing approximately 90% of equity funding, proposed a court-imposed shotgun buy-sell mechanism.
The respondent proposed a buyout under section 207 of the Business Corporations Act using a valuation report prepared by KSV Soriano Inc. The court found that both parties had engaged in oppressive conduct but determined that separation was necessary to preserve the project.
The court ordered a section 207 buyout by the respondent at a price representing the midpoint between two valuation scenarios, rejecting the shotgun mechanism due to procedural fairness concerns arising from late notice and the respondent's good faith participation in case management conferences.
