TORONTO, ONTARIO--(Marketwire - May 26, 2011) -
Editors Note: A photo for this release will be available via Marketwire on the picture wire of The Canadian Press.
Louis and Beverley Winter died 17 days apart in 1965 leaving behind the country's largest Canadian-owned pharmaceutical company and four young boys, who as adults continue their legal fight against Royal Trust (owned by RBC) and their cousin Barry Sherman who they claim failed in their fiduciary duties. These claims, as alleged, are currently before the courts and not yet proven.
Empire Laboratories Ltd., was one of four pharmaceutical companies founded by Louis Winter, whose businesses were sold by Royal Trust to his nephew Barry Sherman in October 1967. To complete the deal, two agreements were in the final sales contract: (1) a 15-year royalty agreement for four chemical processes; and (2) an option for the children to become full-time employees after the age of 21 or following completion of their formal education, and a further option for each child to be given the opportunity to purchase a 5% interest after being employees for two years.
The option and royalty agreements were designed to benefit the orphaned children, but those agreements were never disclosed to their adoptive parents or to the Official Guardian's Office by either Sherman or Royal Trust.
"Losing our parents at such a young age is tragic, but what happened after their deaths is unbelievable," said Kerry Winter, one of the four orphaned boys. "Our story is truly a David and Goliath situation, except we're up against two Goliaths. We had hoped that this matter could have been addressed and settled within our family, especially considering Barry's relationship to our father. Barry's father died when he was young, and my Dad took him under his wing and taught him the family business. It's disappointing that we're fighting this way now."
The beneficiaries of the Winter Estates filed their first claim against Royal Trust for $500 million on March 17, 2006. A second claim for $1 billion and 20% of Apotex was filed on January 24, 2007 against Bernard C. Sherman, Michael F. Florence, Joel D. Ulster, and Apotex Inc. The children allege that Apotex is for all intents and purposes carrying on the business of their late father's companies by another name and Sherman owed a fiduciary duty to them.
Sherman Seeks Sealing Order
In the action against Sherman and others, Ontario Superior Court Judge Wailan Low recently ruled in favour of the plaintiffs to gain access to privately-controlled Apotex's drug records and its most recent financial statements and tax returns. Sherman's legal team requested a sealing order with respect to these documents, which the plaintiffs agreed to, in exchange for discovery dates to move the lawsuit towards a trial. Discovery examinations will take place in June and August.
Maurice Neirinck is lead legal counsel for the orphans in both cases.
Stonewalling the Orphans
RBC purchased the Royal Trust in 1993, but the bank's subsidiary has continued to fight all actions brought forward by the orphans. Not knowing the details of what happened to their father's companies, Jeffrey Barkin, one of the Winter orphans approached Royal Trust to learn more. Instead of assistance, the Royal Trust was uncooperative in providing access to his late parents' records. He was forced to take legal action against Royal Trust to review the estates' files.
While his case was before the court, an unexecuted copy of the purchase agreement was discovered in the records of lawyer David A. Ward Q.C. In 2002, Jeffrey's legal action against the Royal Trust was successful, and Ontario Superior Court Judge Romain Pitt ordered Royal Trust to provide access to all of the estate records to the children. However, the materials that were finally handed over, appeared to have been vetted and it further appeared documents were missing. Signed copies of the executed purchase agreement were not provided following the Pitt order. It was not until the after the children filed their action against Royal Trust did they receive a fully executed copy of the purchase agreement with the two separate related option and royalty agreements.
"Royal Trust has fought us every step of the way; first, by failing to cooperate in permitting us to review our family's estate documents, then by opposing our application for an order requiring production of the documents," explains Jeffrey Barkin.
"It started with some simple questions for the Royal Trust, who we thought would be cooperative in helping us, although it didn't turn out that way. We pulled on a string and everything started to unravel. I would never have guessed that things would turn out the way they did resulting in us having to pursue legal action against Royal Trust, Barry Sherman and Apotex."