A British Columbia court ruled that Edward Rogers was the rightful president of Rogers Communications Inc., a major legal victory in his battle to take control of the company that bears his last name.
British Columbia Supreme Court Justice Shelley Fitzpatrick ruled on Friday that Edward, who was the architect of a plan to oust company CEO Joe Natale in September, before being stranded by members of his own family, had the right to call himself the legitimate president. the company.
“I grant the order requested by Edward and award him costs,” said the judge.
Edward was chairman of the board of directors of Rogers Communications Inc. until last month, when the plan was unveiled and other board members rejected him for the presidency. But he used his power as head of the voting trust that controls 97% of the company’s voting stock to fire five board members, replace them with his handpicked picks and reintegrate.
The court had to decide who was in charge of the business: the original board that removed Edward as chairman, or the newly formed one he created. The case was heard in British Columbia because that’s where the company is incorporated.
“Shakespearean” family quarrel
In his ruling, the judge acknowledged the firestorm that has engulfed the business since the boardroom and the family breakdown were revealed.
“These family quarrels are an interesting backdrop to this dispute which would be more in keeping with a Shakespearean drama,” she wrote in her ruling.
“They undoubtedly added a voyeuristic element from many to the life of a very wealthy Canadian family and this aspect of the conflict received some media coverage. However, in my opinion, family issues are of little help in determining the narrow legal question raised and certainly do not need to be considered or resolved in this court, ”she said. “At best, they’re a distraction.”
Camden Hutchison, a law professor at the Allard School of Law in Vancouver, said the decision was what he expected. Because Edward controls 97% of the voting rights, what he did is “permitted under the Business Corporations Act of British Columbia and also under the sections of Rogers Communications,” he said. Friday to CBC News in an interview.
Under an obscure loophole in part of British Columbia corporate law, anyone with two-thirds control of shareholders can add or remove directors by simple consent resolution, without the need for a meeting. general shareholders.
Lawyers for the company argued that Edward did not follow proper protocol in unilaterally replacing board members and silenced the wishes of non-voting shareholders, but the argument had no effect. legal weight.
“It’s not a legal argument,” Hutchison said.
WATCH | Rogers drama as a “soap opera”:
![](https://thumbnails.cbc.ca/maven_legacy/thumbnails/60/571/313577356.jpg?crop=1.777xh:h;*,*&downsize=510px:* 510w")
Business professor Glenn Rowe says it’s rare to see public fights like this in a company as large as Rogers, even when controlled by families. 0:39
The judge appeared to agree, concluding in his ruling that, based on the letter of the law, “it was not necessary that the [non-voting] shareholders to participate in the process … or attend an effective meeting of shareholders. “
“I have concluded that the process by which Edward obtained the consent resolution was available to him under the articles and the law,” she said. “In accordance with the statutes and the law, the consent resolution is deemed to be valid and enforceable.
The company’s lawyers have asked the judge to suspend the coming into force of his decision, in order to give them time to appeal. But this request was refused; the decision is immediately effective.
It’s not immediately clear whether the company plans to appeal, but Professor Richard Powers of the Rotman School of Management in Toronto says it would be pointless.
“It will be a moot point at this point as Edward will make the changes he wanted to make. The management team will be gone. Their directors will be in place and things will move forward,” he said in an interview.
‘No joy’ in the decision
In a statement to CBC News following the court ruling, Edward took a conciliatory tone.
“I take no joy in the decision or the events of the past weeks,” he said. “The actions I have taken in the face of constant media attacks have been difficult for me and my family … Our family has disagreements like all other families. I hope we resolve these differences in private, like no other. any family would. I know that every member of our family wants the best future for Rogers Communications. “
As for Natale’s role in the business, Edward seemed to suggest that he might still have a future in the business.
“Mr. Natale remains CEO and Director of Rogers Communications and is supported by the Board of Directors. We need to focus on the business [and] a return to stability, ”said Edward.
Either way, the decision is a decisive victory for Edward in his plans to overhaul the business.
His family members who opposed him strongly denounced the decision. “We are very disappointed with the court’s decision, which casts a black eye on good governance and shareholder rights and sets a dangerous new precedent for Canada’s financial markets by allowing independent directors of a public company to be removed with the stroke of a pen, “Edward’s sisters, Martha and Melinda, and his mother Loretta, said in a statement to CBC News.
“The business now faces a very real prospect of management upheaval and a prolonged period of uncertainty, perhaps at the worst possible time.”
Hutchison says that regardless of what happens now, the decision is a positive thing for the company for the sole certainty after a few tumultuous weeks.
“I’m not saying anything good or bad about Mr. Rogers [or] everyone in terms of being able to run the business, but just being sure of who is in control, I think it’s going to be positive for [Rogers Communications Inc.]” he said.
“Evil alcohol lover. Twitter junkie. Future teen idol. Reader. Food aficionado. Introvert. Coffee evangelist. Typical bacon enthusiast.”