Kang v. Sachdev

Kang v. Sachdev

There is a deadlock preventing the companies' affairs from being conducted; it is just and equitable to grant relief under s.324, and the appropriate remedy is to order separate shotgun offers in each company rather than immediate liquidation or appointment of a receiver because that preserves going‑concern value, avoids substantial delay and costs, and is fair to both shareholders; Dr. Kang is ordered to initiate the offers.

Citation
2008 BCSC 1032
Parties
Petitioner: Parmjit Singh Kang; Respondent: Bhupinder Sachdev; Respondent: 0795441 BC Ltd.; Respondent: 0779304 BC Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
31 July 2008
Procedural Posture
Petition Under the Business Corporations Act (british Columbia) Seeking Relief Under S.324 and S.227(3) / Judgment on Petition; Reasons for Judgment and Interlocutory Orders Issued
Outcome
Order for separate shotgun offers in each company granted; petitioner successful and awarded costs on Scale B
Legal Topics
Shareholder Deadlock, Shotgun Buy‑sell Remedy, Liquidation/dissolution, Appointment of Receiver/manager, Section 324 BCA, Section 227(3) BCA, Costs
Source Language
English
Corporate Law Civil Procedure Property Law Insolvency/receivership Shareholder Deadlock Shotgun Buy‑sell Remedy Liquidation/dissolution Appointment of Receiver/manager +3 more

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Parties

Parmjit Singh Kang

Petitioner

Bhupinder Sachdev

Respondent

0795441 BC Ltd.

Respondent

0779304 BC Ltd.

Respondent

Procedural Posture

Petition Under the Business Corporations Act (british Columbia) Seeking Relief Under S.324 and S.227(3) / Judgment on Petition; Reasons for Judgment and Interlocutory Orders Issued

Legal Issues

  1. 1 Whether it is just and equitable to liquidate the companies under s.324(1)(b) of the BCA
  2. 2 Whether the court should order alternative relief under s.227(3) instead of immediate liquidation
  3. 3 Whether a shotgun offer procedure is an appropriate means to resolve the 50/50 shareholder deadlock

Ratio Decidendi

There is a deadlock preventing the companies' affairs from being conducted; it is just and equitable to grant relief under s.324, and the appropriate remedy is to order separate shotgun offers in each company rather than immediate liquidation or appointment of a receiver because that preserves going‑concern value, avoids substantial delay and costs, and is fair to both shareholders; Dr. Kang is ordered to initiate the offers.

Court Disposition

Order for separate shotgun offers in each company granted; petitioner successful and awarded costs on Scale B

Orders

  • Dr. Kang to present separate shotgun offers for the White Rock and Abbotsford companies within 5 days of entry of the order
  • Dr. Sachdev to accept or reply to each offer within 25 days of receipt