No business sense in buyout: Dare

TORONTO • The siblings of the Dare family behind the Canadian cookie-and-candy empire once had a “normal” relationship, but those bonds had already started to show cracks by the time each received shares in the multimillion-dollar company, a Toronto court heard.

“There’s no doubt that the threat of litigation has been used since the day Carolyn got her shares,” Bryan Dare said during his testimony in the Ontario Superior Court of Justice on Wednesday.

His testimony came on the third day of a trial which will decide the fate of the Kitchener, Ont.-based company, which sells popular confectionary and biscuit products such as Bear Paws and Breton Crackers in more than 50 countries.

Carolyn Dare-Wilfred says she has been shunned by the family on both a personal and business level, shut out from assessing the value of her stake and unable to sell it.

Dare-Wilfred is seeking relief under a provision of the Ontario Business Corporation Act called the oppression remedy. If she convinces the court her brothers — fellow shareholders in a holding company which owns 80 per cent of Dare Foods — have been acting in an “oppressive or unfairly prejudicial manner” she can ask for actions including an order that would force them to buy her shares at fair market price or put them up for auction.

In their testimony, both Bryan and Graham Dare painted a picture of a family that played baseball in the backyard and which had spent Christmases together.

After Dare-Wilfred’s husband Harmon Wilfred was arrested in 1998 following a custody battle with his ex-wife, the couple were no longer invited to his house, said Graham. Both brothers and their father, Carl Dare — who built the firm into a multinational conglomerate — were skeptical of Wilfred, according to the brothers.

When Dare-Wilfred and her husband left Canada for New Zealand in 2001, she began trying to sell her shares. One interested suitor at the time was Kellogg, but it was only interested in a majority stake, said Bryan.

Their father bought 25 per cent of Carolyn’s shares for $5 million. She was also entitled to an annual dividend of $341,000. She has received some $7 million, which Bryan said was thought to be enough to live a comfortable life.

By 2014, Dare-Wilfred was looking to sell her stake again. Quebec’s LeClerc biscuits was seen as a potential buyer, Bryan said, but none of the discussions led to a sale.

Under the shareholder agreement, Dare-Wilfred has to offer to sell her share to her brothers first before seeking other suitors. Bryan said, under cross-examination, that there is a disincentive for outside buyers as they would have to sign the same shareholder agreement that binds the siblings.

“We have shares in the company and having more shares wouldn’t make a difference,” Graham said. “Having to go borrow money to buy those shares would make a difference ... I don’t have $55 million sitting around to put into this.”