The plaintiff shareholder sought an oppression remedy under s. 248 of the Business Corporations Act arising from the collapse and bankruptcy of a painting business in which she and one defendant were directors and shareholders.
The parties had attempted a series of agreements for the plaintiff to purchase the defendants’ shares, but the transactions never closed while the corporation’s financial position deteriorated due to unpaid tax remittances, declining revenue, and withdrawals by both directors.
After resuming control of the corporation, the defendant placed it into bankruptcy and began a new painting business.
The court held both directors breached their fiduciary duties by failing to disclose financial issues, failing to exercise due diligence, and placing personal interests ahead of the corporation.
Because both parties’ conduct contributed to the collapse and undermined any objectively reasonable shareholder expectations, neither established entitlement to an oppression remedy.
