COURT BATTLE OVER COOKIES.
In an age when the market for cookies and candies is dominated by faceless conglomerates, Dare Foods tries to retain the old-time spirit of its founder, Charles H. Doerr, who in 1892 started selling treats from a grocery in Kitchener, Ont.
Built by his grandson Carl into a major industrial player — today it makes Real-Fruit Gummies, Breton crackers, Melba toast, Wagon Wheels, Bear Paws, Viva Puffs, Whippets and Girl Guide cookies — Dare Foods is still owned and directed by two of the founder’s great-grandsons, Bryan and Graham, who look forward to keeping the business in the family.
But a trial that begins next week in Toronto threatens to either break up this confectionery dynasty or cripple it with debt.
Bryan and Graham’s sister Carolyn is pursuing an unusual legal claim of corporate oppression, claiming she has been “shut out of the family,” discriminated against by patriarchal traditional German values, and prevented from selling her inheritance by an unfair shareholder agreement.
She is asking a judge to grant her compensation for the “oppressive and unfair” way Bryan and Graham have exercised their corporate powers, which left them richer by tens of millions of dollars.
So while her brothers enjoy a “very comfortable lifestyle,” Carolyn claims she “struggles to make ends meet” and is now “surviving at a subsistence level.”
She is asking for the family holding company to be sold on the open market, or at court-ordered auction, or that a court-appointed expert set a price at which the brothers must buy her out.
And in a twist that adds geopolitical intrigue to corporate family discord, Carolyn claims that a key reason her family allegedly shut her out was her marriage, against her father’s wishers, to Harmon Wilfred, a self-styled whistleblower against the U.S. government, and one of the relatively few people in the world who are legally stateless.
“Neither her father Carl nor her brothers Graham and Bryan have ever accepted Harmon into the family and it has been a point of conflict,” Carolyn claims.
Carolyn and Harmon live in Lincoln, New Zealand, where they moved after a dispute about unlawfully taking his children from the U.S. to Canada, in violation of a custody order. He also claimed to have uncovered a massive government fraud, and claimed he was being persecuted as a whistleblower, which led him to renounce his U.S. citizenship. He is not allowed to work in New Zealand until this problem is resolved.
In the meantime, he runs websites, such as the World Wide Web Court of Public Justice, which promote his theories about conspiracy and cover-up. In their defence, brothers Graham and Bryan cite these websites, co-run with Carolyn, as evidence of her unsuitability to play a role in the family company.
They also allege she lost the businesses she used to run in New Zealand because of mismanagement, which left creditors unpaid, and not because of the 2011 Christchurch earthquake, as she claims.
Her suitability and desire to work for the company appears to be a key point in the feud that started long before Carl’s death in 2014 at the age of 96.
Unlike her brothers, Carolyn has never been involved in the management of Dare, although she did work in marketing for the company until 2001. She claims she only got this job, with an annual salary less than $50,000, because her mother made her father hire her. Her brothers claim she was paid despite “not actually working.”
The brothers claim she has shown “no real interest in or aptitude for the business ... She has never had any observations or insights of any value on the business.” She has been content to be a “passive beneficiary,” they claim.
In 2001, just a couple of years after her controversial marriage, she moved to New Zealand. She had no other source of income and her father was reluctant to finance the move. But again, under pressure from her mother, Carl agreed that the family holding company would purchase one-quarter of her shares, at a 50 per cent discount against market value, for a total of $5 million. She claims this deal was made “under extreme duress.”
She also claims her brothers were given additional shares without her knowledge, and against her understanding that she had an equal one-third stake in the family business. The effect, according to her lawsuit, is that her brothers received tens of millions of dollars in annual dividends, while she has received nothing from the company in more than a decade. Even worse, she claims this was the intent of her father and brother all along, to leave her broke, estranged, and unable to sell her remaining shares.
In their defence, the brothers argue she is trying to force them to sell the company “to outsiders” or make them spend millions to buy her out. They claim she is trying to put her own interests over that of the family, including eight of Carl’s grandchildren. What she is asking “would either end over a century of Dare family control and stewardship over Dare Group or would divert millions of dollars that are currently required for reinvestment in the business.”
They claim it would also violate Carl’s wishes.