Validity of two compulsory buy-sell ("shotgun") offers by 1520807 Alberta Ltd. under the Shareholders’ Agreements (USAs).
Whether the offers were oppressive or unfairly prejudicial to Jisk Holdings Ltd.
Facts
Both parties are 50-50 shareholders in Force Civil Solutions Ltd. and Force Civil Constructors Ltd.
Shotgun offers were delivered on May 27, 2024, requiring Jisk Holdings Ltd. to either sell its shares or buy out the respondent’s shares.
Force Solutions had financing guaranteed by both parties.
Shareholders’ Agreements (USAs)
Compulsory Buy-Out Clause: Shareholders can initiate a buy-sell arrangement.
Guaranteeing Shareholders: Cannot be forced to sell their interest unless guarantees are discharged.
Legal Principles
Strict Compliance: Shotgun offers must strictly comply with the USA terms (Trimac Ltd. v C-I-L Ltd., 942925 Alberta Ltd. v Thompson).
Court’s Analysis
Condition 7: Required identical elections for both companies, permissible under the USAs.
Guaranteeing Shareholder (Section 5.11.8): Shareholder cannot be compelled to sell unless guarantees are discharged at closing, which the offer satisfied.
Condition 8: Required waiver of confidentiality, non-competition, and non-solicitation provisions, invalid since confidentiality obligations are perpetual and non-waivable.
Decision
Invalid Shotgun Offers: The court declared the shotgun offers void due to non-compliant terms related to confidentiality.
Oppression Claim: No findings of oppression.
Order
Outcome: Shotgun offers void and of no force or effect; no order on shareholder oppression.
The document does not indicate any monetary award, costs, or damages granted or ordered.
