For Look Communications Inc. shareholders, news from the courts Friday means Christmas will be a bit more jolly.
At a hearing put over from two weeks ago, Justice Frank Newbould of the Ontario Superior Court of Justice ruled against an application brought by Look's former insiders. Those insiders were ousted last year after a shareholder revolt at parent company Unique Broadband System Inc. The shareholders were upset at the process and the amount of compensation paid to the insiders following the net $64-million sale of its spectrum assets. Since then there have been numerous lawsuits between the various groups.
Justice Newbould was asked to consider two matters: whether the former insiders should have their legal fees indemnified by Look (both UBS and Look have paid some of the legal fees incurred by the former insiders); or whether the former insiders should be required to include information about their conduct surrounding the multimillion-dollar payments they received (material that had been included by the current Look insiders in its filings.)
Friday's application was made after the "new" Look team filed a motion that included a number of affidavits over the summer alleging breach of duty against the former insiders, a motion that has not been responded to by the former insiders.
In a hearing that lasted less than a hour, Justice Newbould said at this stage he was "not at all satisfied" the affidavits should be struck. He noted there are some "outstanding issues" between the parties, adding the relevance of the affidavits will be a matter for the hearing of the motion itself. He argued it's "premature" for a judge to say they are "irrelevant."
In material filed, the former insiders referenced a decision made this year in a similar matter involving UBS before Justice Frank Marrocco. "I have questions about the correctness of the decision of Marrocco J. regarding the scope of" the section that was used. "That, however, will be for the judge hearing the matter. To strike the affidavits at this stage effectively forecloses any argument under that section. I am not prepared to find these affidavits frivolous or vexatious," he wrote.
Justice Newbould said it's "up to the applicants to decide whether to respond to these affidavits. If they are as certain as they say that they are irrelevant, it is for them to decide whether to file responding materials or not."
Calls to the lawyer for one of the former insiders seeking comment weren't returned.
This might explain the high volume in UBS a few days ago.
Best wishes to everyone for the new year, except to GMcG, AD and the rest of the dark side.