CANADA: Brick Brewing faces shareholder lawsuit
Brick Brewing is facing a lawsuit filed by two of its own shareholders, over a private share placement initiated by the firm last year.
Canada-based Brick said yesterday (23 March) that it has been notified of a lawsuit filed against it by two of the brewer's shareholders in the Ontario Superior Court of Justice.
Brick said that the shareholders, who it did not name, have claimed that the group's private placement last autumn "was prejudicial and unfairly disregarded them".
On 31 October, Brick completed a non-brokered, non-arms' length private placement of more than 5.7m 'units', each representing one common share in the firm. The offering was intended to raise US$2.75m.
Benbrick Holdings Inc, George Croft and Kernwood Limited were the subscribers to the offering, Brick said.
Brick said this week that the lawsuit filed against it was "frivolous". It accused the shareholders concerned of hoping to "enrich themselves by obtaining a quick settlement".
The group said: "As described in press releases from the period, the Offering was necessary and in the Corporation's best interests, since at the time of the Offering, the Corporation faced financial hardship due to, among other things, decisions made by previous management of the Corporation, being in breach of a bank financial covenant, the unprecedented financial crisis facing the overall market, a decline in beer industry sales in May and June 2008 due to cool wet weather and a continued decline in Brick beer volume."
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