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Rogers Council Room Battle: Edward Rogers Takes Control

by Rex Daniel

Edward Rogers has the right to make changes to the board of directors.

Edward Rogers won the legal battle for control of Rogers Communications Inc. (RCI), with the court ruling in favor of Rogers on Friday afternoon against RCI’s current board of directors.

British Columbia Supreme Court Justice Shelley Fitzpatrick’s ruling on the fate of the Rogers Communications Inc. board was revealed at 1:30 p.m. in a Vancouver courtroom.

Fitzpatrick simultaneously issued a lengthy reasoning paper to the attorneys for Edward Rogers, led by Kenneth McEwan, and to the attorneys at RCI, led by Stephen R. Schachter.

Immediately after the announcement, Schachter said RCI would seek an expedited appeal – including a suspension of the effects of the statement that Edward Rogers would indeed be able to make unilateral changes to RCI’s board of directors – as there are concerns. that “the subject matter of an appeal would be rendered moot by the actions” of a new RCI Board of Directors appointed by Edward Rogers.

Schachter said there was a danger that Edward Rogers, now legally in control of the RCI board, could ask RCI to immediately drop the appeal process.

However, McEwan told the court that his client has assured that he and his new board will not take any action to change RCI’s approach in an appeal, which will take place next week. Fitzpatrick, citing that this was RCI’s only point of contention and that “the balance of convenience favors certainty” in this case, denied RCI’s request to stay.

This means that the decision – that Edward Rogers is within his rights to make changes to RCI’s board of directors – will take effect immediately.

Fitzpatrick heard the affair between Edward Rogers – son of RCI founder Ted Rogers – and the RCI board of directors (including Edward Rogers’ mother, Loretta, and his two sisters) on Monday. Edward Rogers is asking the court to confirm his ability to unilaterally make changes to RCI’s board of directors, despite his removal by that same board just a few weeks ago.

Edward Rogers was claiming his status as chairman of the Rogers Control Trust – the family trust left by Ted Rogers who controls 97.5% of the voting shares of RCI, although he only owns about 30% of the overall capital of the company. society – as giving it the role of the majority. shareholder of shares with voting rights.

This role, under the BC Business Corporations Act, would give him the power to make changes to RCI’s board of directors through a “resolution by consent” – a written order that does not require a shareholders’ meeting to approve.

RCI retorted in court that if Edward Rogers were allowed to sue, it would run counter to the principle of good corporate governance which is the fundamental guiding interest of Canadian business corporation law in relation to publicly traded companies. . RCI’s attorneys have stated that Edward Rogers should not have the power to unilaterally remove members of the RCI board of directors without holding some meeting of shareholders to obtain their consent.

Legal experts have said the dispute – which arose when Edward Rogers tried to remove RCI CEO Joe Natale a few months ago, then met with opposition on RCI’s board of directors which ultimately led to Edward Rogers being ousted as chairman of the board – seemed to favor the ousted chairman of RCI because of details of the BC Business Corporations Act, something not present in the law in other provinces or at the federal level.

RCI is incorporated in British Columbia

Edward Rogers launched the court motion after his ouster as chairman of the RCI board, when he ordered the removal of five directors from the RCI board who had expelled him and the addition of five new directors. The new board of directors then held a meeting which re-elected Edward Rogers as chair of the board of directors of RCI.

The moves have not been recognized by RCI, but RCI’s board of directors does not have the votes (a 67% super-majority) to remove Edward Rogers as head of the Rogers Control Trust.

The dispute comes at a critical time for the business and Canada’s telecommunications landscape, as RCI attempts to acquire Shaw Communications Inc. in a $ 26 billion deal that is currently under consideration by regulators.

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