BRAMPTON, ON, June 1 /CNW/ - Norwall Group Inc. (TSXV: NGI) ("Norwall") announced today that its board of directors has received a letter from legal counsel to Albeem B.V. ("Albeem") and the Richard Derek Arnold Ashton Trust (the "Ashton Trust") threatening legal action in connection with Norwall's recent sale of manufacturing equipment to DID Co., Ltd. and proposed disposition of certain manufacturing facilities located in Brampton, Ontario.
Among other things, Albeem and the Ashton Trust are alleging that the foregoing transactions represent a "sale, lease or exchange of all or substantially all" of the property of Norwall other than in the ordinary course of business, within the meaning of subsection 184(3) of the Business Corporations Act (Ontario) (the "OBCA"), and that Norwall violated the OBCA by failing to seek and obtain shareholder approval in connection with the above-noted transactions. Albeem and the Ashton Trust further allege that the failure by Norwall to comply with section 184 of the OBCA should not deprive them of the right as shareholders to dissent from the transactions and to be paid fair value for their shares pursuant to section 185 of the OBCA. Albeem and the Ashton Trust have made a claim for payment for the fair value of their shares, and have threatened to bring an oppression action against Norwall under section 248 of the OBCA and/or an order for compliance under section 253 of the OBCA in the event that Norwall fails to make an "offer to pay" within the meaning of section 185(15) of the OBCA and fails to undertake not to disburse any of the proceeds of the impugned transactions pending payment of such fair value to Albeem, the Ashton Trust and other shareholders who may dissent from the transactions.
According to public insider reports available at www.sedi.ca, Albeem, an entity controlled by the Ashton Trust, is the registered holder of 2,035,895 common shares of Norwall (representing approximately 28% of the issued and outstanding common shares). According to its legal counsel, the Ashton Trust holds a further 650,000 common shares (representing approximately 9% of the issued and outstanding common shares) through Barrington Investments Ltd.
The directors of Norwall are reviewing the allegations of Albeem and the Ashton Trust with Norwall's litigation counsel. The board of directors had obtained a legal opinion advising that no shareholder approval was required under the OBCA in connection with the above-referenced transactions.
Norwall intends to vigorously defend any actions that may be brought by Albeem and/or the Ashton Trust and believes that their allegations are entirely without merit.
Norwall manufactures designs and distributes quality residential wallpapers and borders and distributes them to thousands of home centres, specialty stores and mass merchants in Canada and through its wholly-owned operating subsidiary, Patton Wallcoverings, in the United States and in 52 countries worldwide.
Certain statements included in this release contain words such as "could", "expects", "expectations", "may", "anticipates", "believes", "intends", "estimates" and "plans" (and similar expressions) and constitute "forward-looking statements" within the meaning of applicable securities law. These statements are based on Norwall's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Norwall and its subsidiaries operate. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which are difficult to predict and may cause the actual results, performance or achievements of Norwall, or outcomes or results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, such factors which are described in Norwall's management's discussion and analysis of operations and other filings with Canadian regulatory authorities. These statements, although considered reasonable by Norwall at the date of this press release, may prove to be inaccurate and consequently Norwall's actual results could differ materially from its expectations as set out or implied in this release. Unless otherwise required by applicable securities laws, Norwall disclaims any intention or obligation to update or revise any forward-looking statements.
SOURCE NORWALL GROUP INC.
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