Ira Gluskin and Gerald Sheff

March 18, 2016 07:00 ET

Founders' Response to Gluskin Sheff + Associates Inc. Press Release of March 17, 2016

TORONTO, ONTARIO--(Marketwired - March 18, 2016) - Ira Gluskin and Gerald Sheff (the "Founders") each entered into an Amended and Restated Transition and Retiring Agreement with Gluskin Sheff + Associates Inc. (the "Company"), effective January 1st, 2012 (the "Agreements").

Under certain circumstances, the Agreements provide the Founders with an option to require the Company to pay amounts equal to 90% of the fair market value of its Obligations, as defined in the Agreements.

On April 13, 2015, the Founders delivered notices to the Company exercising their option, requiring the Company to pay them the Value, as defined in the Agreements, of the Obligations. The Company disputed the notices and commenced arbitration proceedings. The hearing for the first phase of the arbitration was held January 18, 2016 to January 26, 2016. The purpose of the first phase was to determine whether the April 13, 2015 notices were valid.

The Arbitrator found that the Founders held the view, acting reasonably, that the Company had breached the Agreements with respect to one of its obligations and further, that the Company had failed to remedy the breach in a timely manner having had the opportunity to do so, and therefore that the April 13, 2015 notices were valid.

As the Company saw fit to make comments in its release of March 17, 2016 regarding the state of its information with respect to how the Founders arrived at their claims, the Founders consider it important to set forth certain facts. Prior to exercising their options in April of 2015, the Founders advised the Company that they had retained two independent experts who had separately provided their preliminary views as to Value. The amounts that are being claimed by the Founders were arrived at with the benefit of those views. The Company was also advised as to the amounts that would be claimed prior to the delivery of the notices. At the request of the Company, the Founders also disclosed the firms of the two independent experts who are leaders in their profession. The second phase of the arbitration will fix the amount of the Value.

While the Founders are not pleased to be in the current situation, they are very proud of the Company they founded and built over many years, and they value the many relationships they continue to enjoy with many of the Company's both current and past clients and employees.

The Founders will assert their respective legal positions in the second phase of arbitration dealing with Value. They do not plan to comment further, pending the final decision of the Arbitrator.

Contact Information

  • David Spence
    Stikeman Elliott LLP