Judge tosses suit seeking a piece of Apotex fortune
Claim filed by billionaire’s orphaned cousins labelled as ‘wishful thinking’
Billionaire Barry Sherman has come out victorious in a lawsuit brought by his cousins, who argued he owed them a share of his interest in Apotex, the generic drug company he founded in 1974.
“The claimed interest in Apotex was wishful thinking, and beyond fanciful,” Superior Court Justice Kenneth Hood wrote in a decision released this month. “Nothing can now change these findings of fact.”
Hood granted Sherman’s motion for summary judgment, finding there was no need to proceed to trial. He dismissed the lawsuit brought by Sherman’s cousins, the “Winter orphans,” four boys, three of them now grown men and one who has died and was represented in the lawsuit by his widow.
Their father, Louis Winter, was the founder of Empire Laboratories Ltd. and died in 1965 when the boys were still very young, just weeks before their mother, Beverley, also died.
Cousin Barry would go on to acquire Empire in 1967 with some associates.
The plaintiffs had alleged that Sherman owed them a “fiduciary duty,” in that he had promised the executors of their parents’ estate in an option that the Winter children would have the right to work for the company after the age of 21 and buy 5 per cent of the issued shares, according to their statement of claim.
Instead, they alleged the founding of Apotex was made possible in 1974 through proceeds from Sherman’s eventual sale of Empire, but that no provision was made for the children to work at Apotex and become shareholders. In the recent lawsuit, they were seeking 20 per cent of Sherman’s interest in Apotex.
But Hood wrote that the option was already null and void by the time Apotex was founded, and reiterated findings from a different judge in a previous unsuccessful lawsuit brought by the plaintiffs (assisted by a different lawyer) against their parents’ executors, Royal Trust.
“As found by Justice (Paul) Perell and confirmed by the Court of Appeal, Apotex did not own or use any of the assets, goodwill, property of business of the Empire companies,” Hood wrote.
The Winters’ lawyer, Brad Teplitsky, said they would be appealing, and declined to comment further. Lawyer Katherine Kay said neither Sherman nor his legal team would be commenting.
Hood said the executors had wanted stronger terms in the option that would have “inhibited Sherman’s ability to resell the purchased business or take the Empire companies public. Sherman refused such terms.”
After the 1967 purchase of Empire, the corporation that owned the drug company, Sherman & Ulster, entered into a share swap with shareholders from a different corporation in 1969. As a result, Sherman and his associates lost control of S& U, Hood said.
The judge found the option agreement “arguably became null and void” at that time.
“It is an abuse of process, in the circumstances of this case, to come to the court asking to proceed, even if against different parties, where the relief and issues arise from the same relationships and subject matter that have already been dealt with by Justice Perell and the Court of Appeal,” Hood wrote.