Judge freezes D’Addario’s EMS stock

An Ontario judge has frozen Environmental Management Solutions Inc. stock held by founder Frank D’Addario pending more court hearings to resolve a dispute over who owns the shares. The court order, signed yesterday by Justice Colin Campbell, was requested by a lawyer for Toronto-area businessman Robert Sansone, who is demanding that all of D’Addario’s stock — 23.5 per cent of the company — be transferred to him.

“ Basically, it freezes the shares until we get the dispute over ownership of the shares worked out. Nobody can buy or sell them,” lawyer Michael Round said after the brief hearing in Ontario Superior Court. He declined to discuss further details of the case.

Sansone, president of 310 Waste Ltd., contends that D’Addario’s stock was pledged as security for $5 million spent on consulting and proxy solicitation services ahead of last April’s EMS shareholder vote.

D’Addario and his supporters narrowly failed to unseat the board, which fired D’Addario in January and which has filed a civil suit against him and his wife, Ferne, a former executive of the company. The D’Addarios have countersued.

D’Addario, a resident of Manotick, Ont., near Ottawa, said last week in an interview that he didn’t have an agreement with Sansone. He wasn’t in court yesterday and no lawyer spoke on his behalf at the 10minute hearing.

If Sansone’s claim is successful, he would become the largest shareholder in EMS — a company that processes contaminated soil and organic waste into reusable products.

Chief financial officer Jim Collins said last month that EMS expects revenues in the third quarter ending Sept. 30 will be in a range of $ 9.6 million to $ 9.8 million.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, is expected to be between $ 1.3 million and $ 1.5 million. Debt at the company’s continuing operations is expected to be less than $10 million by Sept. 30, Collins said. The EMS board, chaired by former Ontario premier Mike Harris, has been in a running legal battle with D’Addario over control of the firm.

D’Addario started the company in his home and grew it rapidly through acquisitions.