Judge denies Quebecor injunction against Just For Laughs

A Superior Court judge refused to issue an injunction, sought by Quebecor, on Monday in a dispute over the sale of the Just for Laughs Group.

Under two contracts signed between the two companies, Quebecor Media Inc. (QMI) claims that it has the right to make the first offer on the company and a right of first refusal — the chance to match any proposal made by a third party to buy the company.

The founder and majority shareholder of Just for Laughs, Gilbert Rozon, said he would sell his share of the business he founded in 1983 after he was accused of sexual harassment and assault by numerous women in October.

In her decision, Judge MarieAnne Paquette confirmed that QMI has a right of first offer and first refusal, due to the contracts it signed with JFL in 2012 and 2017, but that the scope of those rights is narrower than QMI claims.

The right of first offer was respected, the judge said, but the parties had not reached an agreement by the end of the exclusive negotiation period, on Jan. 4.

QMI now has the right of first refusal if JFL wants to sell to a third party at a lower price, or under conditions less favourable, than the first offer made by QMI, the judge said, but QMI does not have the right of first refusal if the humour giant wants to sell to a third party for a higher price.

In other words, the agreements don’t give QMI the ability to reconsider its decision to refuse the first offer.

While Quebecor has certain rights, the judge said, it cannot hold JFL hostage.

In a statement, Quebecor said it was “disappointed” that the ruling did not give it everything it was seeking, but was pleased the court recognized the company ’s right of first offer and first refusal.