Financial inquiries ‘a bit of an insult,’ Dare heiress says
Stake in multinational food company at centre of decades-long family feud
A lawyer for Bryan and Graham Dare on Tuesday chipped away at the reasons their sister Carolyn Dare-Wilfred wants an Ontario judge to force a sale of their familyowned cookie and food empire.
During her cross-examination at a trial in the ownership dispute, the brothers’ lawyer, John Chapman, questioned whether DareWilfred understands how others might view her previous demand that her brothers pay $55 million to buy out her roughly 20 per cent indirect stake in Kitchener, Ont.based Dare Foods Group.
In 2001, family patriarch Carl Dare set up a structure that paid Dare-Wilfred $5 million for 25 per cent of her one-third stake in Serad Holdings, which in turn holds an 80 per cent stake in Dare Foods. She also received a series of dividend payments over several years. By 2010, she had received more than $7 million, court heard Tuesday.
Dare-Wilfred moved to New Zealand in 2001 with her husband, Harmon Wilfred, a self-described whistleblower who claims to have information about the financial misdeeds of the CIA and the Clinton family.
In early 2010, Dare-Wilfred and her husband were short of cash.
She and her husband say their investments in New Zealand suffered after the 2010 and 2011 earthquakes in Christchurch. She was also facing a multimillion-dollar tax bill from the Canada Revenue Agency related to her 2001 share sale.
She asked her father, then well into his 80s, for financial help, but was distressed when he demanded to see some records to prove she needed the funds.
“Do you not understand it might be natural for him to wonder why $7 million was not enough?” Chapman asked.
“To me it was a bit of an insult,” Dare-Wilfred replied in court. She viewed her father’s prior financial help as an unconditional gift. “For him, this was just another control thing. I couldn’t stand it.”
Carl Dare died in 2014. That same year, Dare-Wilfred triggered a portion of the Serad shareholder agreement in which she could offer to sell her remaining shares to her brothers. If they refused the offer, she was allowed to market those shares to a third party at the same price.
She offered to sell her stake, which works out to an indirect stake of 20 per cent in Dare Foods, for $55 million, but her brothers said this was too much and refused.
Court heard that Dare-Wilfred was seeking roughly twice the amount Saputo Inc. had received from Serad for its stake in Dare in a 2010 transaction.
Dare-Wilfred challenged that valuation in court. “A lot of things had happened between Saputo and then,” she said. “I don’t believe you can value the shares on Saputo.”
After the brothers refused, an investment bank was engaged to sell the shares. No offers emerged. Dare-Wilfred said in court that the bank and the company didn’t provide the market with enough information.
Chapman then asked why DareWilfred didn’t return to the market with a lower offer. This was permitted under the shareholders agreement, so long as the brothers had a chance to match any offer from a third party.
“Do you understand the option was to go back to market with a lower price?” Chapman asked.
“Yes,” Dare-Wilfred replied, but she added the real problem was that she hadn’t been provided with enough information about the financial position of the company to pick the right price.
“I still didn’t know the real value,” she said. “We didn’t have enough information.”
Later Tuesday, Bryan Dare began giving his evidence. He described Dare Foods as a cookie, candy, cracker and flat breads company with about 1,200 employees and annual sales of around $300 million.
Profits weren’t disclosed in open court. Dare said the majority of the company’s profits are reinvested in the business, which he described as facing stiff competition from multinational competitors.
He said the family was shocked when his sister disappeared from her home near Stratford, Ont., in 2001, then suddenly reached out from New Zealand with an offer to sell her shares in the company.
“Carolyn’s situation was surprising to us,” he told court.
The trial before Justice Barbara Conway continues.