Emerald Health’s Huang settles stock option lawsuit
Emerald Health Therapeutics Inc.’s president, Bin Huang, has settled a lawsuit over a stock option. A private company claimed that it was supposed to receive an option for 830,000 shares.
EMERALD HEALTH Therapeutics Inc.’s president, Bin Huang, has reached an out-of-cour t deal to settle a lawsuit she faced in the Supreme Court of British Columbia over a stock option. A privately held entity had claimed that it was entitled to an option for 830,000 shares as part of a finder’s fee arrangement. The option was supposedly exercisable at 10 cents, which would have made it of some value.
The end of the lawsuit is contained in a consent order filed at the Vancouver courthouse on Oct. 26, 2017. The order simply states that the suit is dismissed with each side to bear its own legal costs. Lawyers for both sides signed the document.
The order brings a quiet end to a case that began almost a year ago. On Nov. 30, 2016, privately held Jescorp Capital Inc. filed a notice of claim against Ms. Huang. According to the suit, Jescorp acted as a finder in a May, 2015, transaction between Emerald Health and a company called Medna Biosciences Inc. (The suit had no details of the transaction, but that month Medna acquired 20.15 million shares of an Em erald predecessor.)
For its role in the deal, Jescorp was to receive an option for 830,000 shares at 10 cents, the suit claimed. (Based on Emerald Health’s closing price of $2.26 on Monday, that many shares would be worth $1.87-million.) The problem, according to the suit, was that Jescorp was unable to exercise the option. Jescorp said that it gave notice of the exercise on Sept. 27, 2016, but it received no response. About a week later, Jescorp’s lawyer wrote a letter demanding a reply, with that query going unanswered as well, according to the suit. Within weeks, it filed the lawsuit.
In addition to Ms. Huang, the lawsuit named as a defendant a Victoria resident named Renee Gagnon. The reason that Ms. Gagnon was a defendant was that the option in question originally belonged to her. She had assigned it to Ms. Huang on Jan. 16, 2015, but apparently the option remained in Ms. Gagnon’s name. The order dismissing the suit applies to Ms. Gagnon as well.
For her part, Ms. Gagnon denied any wrongdoing. In a response filed on Feb. 23, 2017, she said that the agreement to assign the option to Jescorp simply did not exist. Alternatively, if Ms. Huang did assign the option to Jescorp, she did so without telling Ms. Gagnon, according to the response. Ms. Gagnon asked that the suit be dismissed.
Ms. Huang did not file a response to the suit. Emerald Health was not a defendant in the case. (There was never an
explanation in court filings as to why Ms. Huang was paying a finder’s fee on the company’s behalf using an option in Ms. Gagnon’s name.)
Vancouver lawyer Rohan Hill of McMillan LLP filed the lawsuit on Jescorp’s behalf. Gerry Cuttler of Cuttler & Company represented Ms. Gagnon while Patrick Sullivan represented Ms. Huang. Corporate records list Jescorp’s sole officer and director as North Vancouver resident Michael W. Wilson.
Avtar S Dhillon, Punit S Dhillon, James Leslie Heppell, David John Raffa, Chris W Wagner
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