Scott Kugler

Representative Work

Securities

• Greenfire Resources Regulatory – Defended certain directors and shareholders of Greenfire against applications to the Alberta Securities Commission for cease trade orders based on a shareholder rights plan that was implemented after various exempt market transactions were entered into. Entirely successful in having the claim dismissed.
• Bridgemark Class Action and Regulatory – Defended Bridgemark and others against claims by shareholders and the B.C. Securities Commission that they participated in a $50 million “cheque swap” scheme. Claims were all settled.
• Xebec Class Action – Defended a former officer and director of Xebec against a securities class action. Investors sued the company, its officers, directors, auditors and underwriters for misrepresentation in connection with a $143 million prospectus offering of Xebec securities. Claim was settled.
• SNC-Lavalin Class Actions – Defended the former CEO of SNC-Lavalin in class actions in Ontario and Quebec. Investors sued the company and its officers and directors for approximately $1 billion for misrepresentation. The action was certified as a class action, but with a much narrower scope than the plaintiffs sought in the Claim. We defeated a motion by plaintiffs to amend the Claim and defeated a motion for leave to appeal from that decision. Claim was settled.
• Penn West Class Actions – Defended Penn West Petroleum and a number of current and former directors and officers of the company against multiple shareholder class actions in Canada following the restatement of its financials. A parallel class action was commenced in the United States. Claim was settled.
• Poseidon Class Actions – Defended Poseidon and its directors and officers against class actions and multiple other actions in which shareholders asserted both primary and secondary market claims arising from the company’s announcement that approximately $100 million in revenue was improperly recognized. Class actions were commenced in Alberta, Ontario, Quebec and New York. The Poseidon litigation also involved CCAA proceedings and regulatory proceedings. Claim was settled.
• Shareholder Activism – Defended Aberdeen International Inc. against an application to the OSC by an activist shareholder intent on forcing our client to register with the OSC in a different category, change its processes, and report differently to shareholders. Entirely successful in having the application dismissed.
• Shareholder Activism – Represented Land & Buildings Investment Management LLC, a high profile activist investor, in an urgent proceeding at the OSC to contest a decision of the TSX that would have permitted Hudson’s Bay Company to complete a complex and dilutive share issuance within the context of a multi-billion dollar transaction. Entirely successful in the only contested motion and then settled.
• Real Estate Developer Regulatory – Defending a real estate developer and its founder in an investigation by the B.C. Securities Commission that moneys raised in private placements for one development were unlawfully loaned by the developer in furtherance of a second development. Proceedings were averted.
• Convertible Debenture Pricing – Represented a hedge fund in a dispute with the issuer of convertible debentures concerning the conversion price of the debentures. Entirely successful in obtaining a court order requiring the issuer to pay the conversion price that our client had sought.
• Disclosure / Insider Trading – Represented a publicly traded company in a regulatory investigation in which the OSC alleged that the company’s disclosure was deficient and that some of its key executives traded while in possession of material undisclosed information. Proceedings were averted.
• Insider Trading – Represented the President of a public company in proceedings commenced by the OSC in which it was alleged that he had traded while in possession of material undisclosed information. Settlement resulting in a decision that is widely cited as setting out the applicable principles for a settlement approval hearing.
• Investment Advisors – Represented multiple investment advisors and portfolio managers at a leading Canadian financial institution in a regulatory matter involving IIROC. Proceedings were averted.
• Investment Advisors – Represented an investment advisor in regulatory proceedings relating to allegations that the broker had failed to properly advise certain clients and had entered into private dealings with those clients. The proceedings were settled.
• Investment Dealers – Represented a securities dealer in multiple civil proceedings by investors who lost considerable sums of money as a result of investing in an unapproved product that was brought to their attention by some of the dealer’s representatives. Claims were settled.
• Colt Resources Class Action – Defended Colt Resources and two of its directors against a shareholder class action alleging that the company failed to make timely disclosure of a material change and subsequently made misrepresentations in its disclosure documents. Claim was settled.
• Greenstar Class Action – Defended four former officers and directors of Greenstar against a class action in Ontario alleging misrepresentation in its offering documents relating to its operations in China. Claim was settled.
• Barkerville Class Action – Defended Barkerville and two of its former directors and officers against a securities class action relating to alleged misrepresentations concerning geological reports. Claim was settled.
• Armtec Class Actions – Defended Armtec and its directors and officers in class actions commenced in Ontario and Quebec by primary and secondary market investors for approximately $100 million. The plaintiffs alleged that the prospectus and certain public statements contained misrepresentations about the sustainability of the company’s dividend. Claim was settled.
• Atlas Cold Storage Class Action – Defended the CFO of a publicly traded income trust in a class action commenced in Ontario by primary and secondary market investors for approximately $343 million. The plaintiffs alleged that the prospectus, as well as various financial statements and press releases, contained misrepresentations about the finances of the income trust. Claim was settled.
• Portus Class Action – Defended four investment dealers in class actions commenced by investors for an unspecified amount that was expected to be close to $100 million. The plaintiffs alleged that the Portus hedge fund was a sham and that the investment dealers were complicit in the furtherance of the sham. The defendants were successful in striking out most of the claim on a preliminary motion, following which a settlement was reached.
• YBM Magnex Class Action – Defended the former auditor of YBM Magnex in two class actions commenced by primary and secondary market investors for approximately $360 million. The plaintiffs alleged that YBM Magnex was used to carry out a multi-layered conspiracy and fraud for several purposes including obtaining improper gains by financial statement misrepresentation and manipulation. Claim was settled.

Competition / Anti-Trust

• “PVC” Class Action – Defending a leading U.S. manufacturer of PVC pipes in a class action in which plaintiffs allege a price-fixing conspiracy between PVC pipe manufacturers.
• Airline “Capacity” Class Actions – Defended a U.S. airline in class actions commenced in multiple jurisdictions in Canada in which plaintiffs allege that the defendant airlines conspired to limit the increase in capacity in the airline industry in order to drive higher prices and higher margins. Claim dismissed on certification.
• “Prescription Drug” Class Action – Defended a drug company in a class action commenced by consumers who purchased prescription drugs at allegedly inflated prices due to an alleged price-fixing conspiracy between drug companies. Claim dropped against our client on certification.
• Real Estate “Sales Commission” Class Action – Defended an international real estate brokerage in a class action in which plaintiffs allege a price fixing conspiracy to maintain sales commissions for real estate brokers.
• “Farmed Salmon” Class Action – Defended a Norwegian based salmon producer in a class action commenced by consumers in Canada who purchased farm-raised salmon at allegedly inflated prices due to an alleged price-fixing conspiracy between producers. Claim was settled.
• “Drywall” Class Actions – Defended a leading US drywall manufacturer against class actions in Ontario and Quebec relating to an alleged conspiracy to increase the price of drywall throughout North America. Claim was settled.
• “Condo Refurbishment” Class Action – Defending a condominium refurbishment company in a class action commenced by condominium corporations in the Greater Toronto Area in which plaintiffs allege that multiple leading refurbishment companies engaged in illegal bid rigging in order to charge higher prices to condominium corporations for refurbishment services. Claim was settled.
• Airline “Fuel Surcharge” Class Actions – Defending a U.S. airline in class actions commenced in Ontario on behalf of all persons who purchased a ticket for trans-Atlantic or trans-Pacific air travel. The plaintiffs allege that the defendants participated in a worldwide price-fixing conspiracy in relation to fuel surcharges that were applied to airline tickets. The plaintiffs have claimed approximately $200 million in damages. Claim was dropped.
• “Resistors” Class Actions – Defended a Japanese based resistor manufacturer against a class action in Ontario relating to an alleged conspiracy to increase the price of resistors throughout the world. Claim was settled.
• “LCD” Class Actions – Represented a Taiwanese manufacturer of LCDs in class actions commenced in Ontario and B.C. on behalf of direct and indirect purchasers of LCDs. The plaintiffs alleged that the defendants participated in a worldwide price-fixing conspiracy in relation to LCDs. The plaintiffs claimed approximately $150 million in damages. Claim was settled.
• “SRAM” Class Actions – Represented a U.S. manufacturer of SRAM in class actions commenced in Ontario, Quebec and B.C. on behalf of direct and indirect purchasers of SRAM. Plaintiffs alleged that the defendants participated in a worldwide price-fixing conspiracy in relation to SRAM and claimed approximately $400 million in damages. After successfully defending a production motion, the claim was settled.
• “Consumer Product Engines” Class Actions – Represented an international manufacturer and distributor of consumer product engines in class actions commenced in Ontario and Quebec on behalf of all persons who purchased engines or products containing the engines. The plaintiffs allege that the manufacturer falsely advertised the attributes of the engines. Claim was settled.
• “Automotive Cross Border Pricing Disparity” Class Actions – Represented a leading automobile manufacturer in a class action commenced in Ontario on behalf of all persons who purchased automobiles in Canada at prices higher than were available in the US. Entirely successful in negotiating a dismissal of the action against our client.

Shareholder / Partnership Disputes

• Oppression re Equity Issuance – Defending an issuer and its director and CEO against claims by a minority shareholder that misrepresentations were made in a share purchaser agreement in respect of the company’s compliance with its credit facility at the time of the transaction.
• Oppression re Shotgun – Successfully defended a third party lender that financed a management buyout and subsequently converted its debt into a majority shareholder position against an oppression claim by the former majority shareholder. Claim was dismissed on a motion to dismiss for abuse of process. Appeal is pending.
• Oppression re Financing – Successfully defended the directors of a technology company against an oppression claim by the former majority shareholder in connection with financings that diluted the majority shareholder’s holdings. Claim was dismissed on a motion to dismiss for delay, upheld by the Court of Appeal, leave denied by the SCC.
• Oppression re Termination of Employment – Successfully defended the directors of a dental service organization against an oppression claim by the founder of the company in connection with the termination of his employment and forced repurchase of his shares.
• Oppression on Business Shut Down – Defended the majority shareholder, and the directors and officers, of a national automobile repair business against claims of oppression by minority shareholders who allege that the business was shut down without their approval and contrary to statutory requirements.
• Oppression / Buyout claim – Defended a major shareholder of a family business against claims by a minority shareholder and former employee alleging off-book transactions, misuse of IP, and fraudulent bookkeeping.
• Enforceability of Buy-Sell Agreement – Successfully defended a partner in a partnership dispute regarding the validity of a buy-sell offer and the conduct of the partners in relation to the buy-sell offer. Decision is widely cited for defining parties’ obligations in buy-sell scenarios.
• Share Valuation Dispute – Defended a public company in a valuation dispute with a former C-Suite shareholder regarding the price at which the shareholder was required to sell its shares to the company. Successful on a court application dealing the valuation process.
• Dispute re Issuance of Convertible Debt to Related Parties – Defended a leading water purification company and its directors and officers against a claim commenced by minority shareholders claiming that a convertible debt issuance was oppressive and breached statutory requirements applicable to non-arms’ length transactions. The claim was settled on the eve of trial.
• Real Estate Company – Represented a group of third generation shareholders of a billion dollar family development business and succeeded in obtaining liquidity for their minority shareholdings.
• Real Estate Company – Represented a group of second generation shareholders of a half-billion dollar real estate company to institute transparency and proper governance, leading to a successful partial liquidation of the business to provide liquidity to all interested shareholders.
• Real Estate Company – Represented a 50% shareholder of a half-billion dollar real estate company to negotiate a restructuring of the business to provide for a separation of the owners’ interests without resort to litigation.
• Real Estate Company – Defending multiple shareholders of a leading real estate and development company in a one billion dollar shareholder dispute involving the oppression remedy.
• Private Health Care Company – Represented a key shareholder of a private health care company in a dispute with its other key shareholder over the management and control of the company. The dispute was resolved prior to court proceedings being commenced.
• Private Health Care Company – Represented shareholders of a closely-held private health care company in a dispute with other shareholders who had joined the company as a result of a merger. The unanimous shareholders’ agreement did not contain a buy-sell provision or other contractual mechanism that would allow for the resolution of the shareholder dispute, but we obtained a court order forcing the other shareholders to sell their shares to our clients. The terms of sale were resolved out of court.

Corporate Commercial Disputes

• Bridging Finance: Defending the former CFO of Bridging Finance against claims of breach of duty in the conduct of his obligations. Bridging Finance suffered a complete collapse after it was discovered that the principals of Bridging Finance (but not its CFO) and certain of its borrowers had committed fraud.
• Leasing Dispute – Defended a industrial property owner against claims by a former tenant that it had the right to purchase the property under the lease. The tenant’s claim was dismissed by the court and the decision was upheld by the Court of Appeal.
• Lender Liability – Defending a prominent bank against allegations that it conspired with one of its commercial borrowers in connection with its borrower’s consumer facing business. Claim was settled.
• Real Estate Brokerage – Defending a leading real estate brokerage against claims that misrepresentations were made in a confidential information memorandum that led the purchaser to overpay for a $100+ million commercial portfolio. Claim was settled.
• Covid-19 Rapid Tests – Defending a prominent rapid test manufacturer against claims by a third party reseller alleging that it made introductions leading to significant purchases that should have triggered sales commissions.
• Employment Class Action – Defended a leading technology company in a class action by couriers who claim to be employees rather than independent contractors.
• Condominiums – Defended a condominium corporation and its directors against a claim by multiple large tenants in respect of a dispute over the parking arrangements at the location and over the tenant’s desire to erect a pylon sign.
• Employment – Defended a prominent sports club against a claim brought by a member who was challenging the club’s decision to suspend his membership for breach of the club’s rules.

M&A Disputes

• M&A Dispute re Reps and Warranties Insurance – Represented an insurer against a claim under a transaction risk insurance policy alleging that the vendor did not disclose product defects, and compiled an order backlog list that overstated confirmed orders.
• M&A Dispute re Reps and Warranties Insurance – Represented an insurer against a claim under transaction risk insurance policy alleging that an accounting error led to an overstatement of EBITDA and thus an inflated purchase price. The key issue between the parties was whether this was an appropriate claim for the application of a multiple.
• M&A Dispute re Reps and Warranties Insurance – Represented an insurer against a claim under transaction risk insurance policy alleging that purchased business unit was unable to operate post-closing as it did prior to closing, stemming from vendor’s failure to renew / transfer a significant software license agreement that was in the name of the vendor not the business unit.
• M&A Dispute re Reps and Warranties Insurance – Represented an insurer against a claim under transaction risk insurance policy alleging that employees of the acquired company were not paid the full amount of vacation and holiday pay that they were entitled to as a result of a calculation error made by the acquired company over a number of years.
• M&A Dispute re Reps and Warranties Insurance – Representing an insurer against a claim under transaction risk insurance policy alleging that the acquired business’ relationships with its key customers materially and adversely changed prior to closing, and no disclosure of such change was made.
• M&A Dispute re Reps and Warranties Insurance – Representing an insurer against a claim under transaction risk insurance policy alleging that certain employees of the target company who received share consideration should have had tax withheld and remitted on their behalf.
• M&A Dispute re Reps and Warranties Insurance – Representing an insurer against a claim under transaction risk insurance policy alleging that various purchased assets were not in good operating condition, and that other aspects of the purchased facility were unsafe and did not meeting OHSA requirements, necessitating capital expenditures to bring the facility into compliance.
• M&A Dispute re Reps and Warranties Insurance – Representing an insurer against claim under transaction risk insurance policy alleging that the vendor’s order backlog was artificially inflated leading to an inflated purchase price.
• M&A Dispute re Earnout Payments – Represented the vendors in a dispute with the purchaser of a large consumer products business involving a dispute over the interpretation of the transaction documents relating to Earnout calculations.
• M&A Dispute re Earnout Payments – Representing a leading third party adjuster firm against a claim by the former shareholders of a business that was acquired by our client. The claim alleges that the purchaser actively diverted business away from the relevant business unit resulting in the conditions for earnout not to be met.
• M&A Dispute re Obligation to Close – Represented the vendor in a dispute with the purchaser about whether the conditions for closing had occurred. Through effective negotiation, the purchaser backed off insisting on closing saving our client millions of dollars.
• M&A Dispute re Misrepresentations – Defended a company and its principals against a claim brought by the purchasers of the defendant company’s pharmacy business. The purchasers claimed that certain representations were false and that certain covenants were not fulfilled. The claim has been settled.
• M&A Advisory - Advisory work for a leading underwriter with respect to its domestic obligations to clients and third parties for the purposes of an international arbitration.

Copyright / AI

• AI Class Actions – Defending a leading consumer-facing AI company against class actions in BC and Quebec alleging that our client built their AI model using copyrighted materials, and has breached copyright in their deployment of the model.
• AI Class Actions – Defending a leading business-facing AI company against class actions in BC and Quebec alleging that our client built their AI model using copyrighted materials, and has breached copyright in their deployment of the model.

Privacy

• Privacy Class Action – Defended a leading cloud storage and services company in a class action by customers of a financial institution whose data was accessed in a cyberattack on the financial institution. We were entirely successful in having the plaintiffs’ claim dismissed at the certification motion. The dismissal was upheld on appeal and leave to appeal to the SCC was dismissed.
• Privacy Class Action – Defended a leading technology company in a class action by consumers who claim that mobile phone companies had access to, and accessed, their user information and confidential data under alleged data sharing agreements with Facebook. Claim was settled.

Insurance

• HST Class Action – Defended a leading insurer in a class action by policy holders alleging that their SABS benefits were incorrectly calculated due to alleged inclusion of HST in benefits calculations. We were entirely successful in having the claim struck out on jurisdictional grounds on a preliminary motion. The decision was upheld on appeal.

Municipal

• PFSA Class Action – Defending a municipality in a class action by residents of the municipality whose drinking water was allegedly impacted by PFAS that was used in the area by the municipality, resulting in a decrease in their property values.
• Highway Class Action – Defended a municipality in a class action by persons who were involved in accidents on a highway alleging that the highway was unsafe for vehicular use. We were entirely successful in defending the certification motion.
• Environmental Class Action – Defending a municipality in an environmental class action alleging that plaintiffs lost property value resulting from approval of developments that allegedly increased the size of the downstream floodplain. A settlement was reached that is currently pending approval by the court.

Administrative Law

• Judicial Review – Represented the manufacturer of Chobani Greek yogurt in a high profile dispute regarding a test marketing permit that had been issued by the Minister of International Trade that allowed limited quantities of Chobani to be imported into Canada duty-free. The applicants contended that the import permit was unreasonable because the imports threatened Canada’s supply management system and argued to have the import permit struck down. The court dismissed the applications and ruled that the applicants all lacked standing.