A former CEO and minority shareholder has failed in his attempt to have a 96-year-old Burnaby printing company liquidated after it terminated him two years ago.
Daniel Castilloux, who once ran Mitchell Press Ltd., filed a petition in B.C. Supreme Court in October 2022 asking for an order for the company to be sold off, according to .
Since his ouster in March 2022, Castilloux claimed he'd been stuck in "shareholder purgatory" with no salary from the company and no way to get income from his shares since the business had never declared a dividend and he can't get cash for his shares unless it's sold, the ruling said.
Mitchell Press was originally founded in 1928 by ex-Vancouver Sun financial editor Howard T. Mitchell to publish the now defunct Financial News, Canada's first newspaper specializing in Western Canadian financial matters.
Today, Mitchell is Canada’s third largest commercial printing company, with 109 employees operating out of a 64,000-square-foot facility at 8328 Riverbend Court – a property valued at well over $20 million, according to the ruling.
Trusted son-in-law
Castilloux married Howard Mitchell's daughter in 1990 and worked his way up the ranks after his father-in-law sent him to university to learn business management and the science of printing.
Castilloux's role in the company continued even after his divorce in 2010, and he gradually took over the management of Mitchell Press from his ex-father-in-law along with Howard Mitchell's son, David Mitchell.
In 2018, Howard Mitchell also gifted Castilloux a 37.6 percent stake in the company.
By 2022, Castilloux was CEO and David Mitchell was president, but Castilloux was not happy with how much his ex-brother in law was doing for the company, according to the ruling.
"It is clear that David Mitchell's alleged failure to pull his weight at Mitchell Press became a source of growing resentment for Mr. Castilloux," the ruling said.
His grievances burst to the surface in November 2020, when Castilloux gave David Mitchell a "dressing down" in front of the company's CFO, accusing David Mitchell of "doing basically nothing for 28 years" and saying he was tired of "carrying" him, the ruling said.
Castilloux later apologized but not in terms his ex-brother-in-law found sincere, according to the ruling.
COVID conspiracy
The COVID-19 pandemic made matters worse.
Castilloux refused to comply with company policies – including masking and social distancing – adopted by his own management team to contain the spread of the virus, according to David Mitchell and other employees.
"Mr. Castilloux repeatedly told his managers and employees that the mandates were part of a government conspiracy to expand executive powers and eradicate their civil liberties," stated the ruling.
Rather than comply with public health mandates, he stopped going to the plant.
When he did go, he refused to wear a mask or would not cover his nose, according to the ruling.
He suggested he should stay home and communicated electronically with employees via a computer tablet affixed to a pole.
"Mr. Mitchell considered this behaviour absurd, impractical, and insulting to all the employees who were following the rules and keeping the company afloat in difficult times," the ruling said.
Testimony from David Mitchell and others also included accounts of Castilloux summoning employees and suppliers to his home and encouraging them to go unmasked while they were there.
"On one occasion, apparently, he conducted a meeting with the company's banker dressed in a bathrobe, offering the banker a bathrobe to wear himself," stated the ruling.
A senior manager described Castilloux's behaviour as "unprofessional," "unfair," and "embarrassing."
Castilloux told the court he stopped going to the plant, not because he thought the Covid-19 mandates were a tyrannical hoax, but because he was afraid of contracting the virus himself.
But B.C. Supreme Court Justice Robin Baird was not convinced.
He noted Castilloux had invited people to his house for meetings and encouraged them to take no precautions against the virus at all.
"In my assessment, Mr. Castilloux's claim that he stayed home to protect his own health is a recently contrived justification for behaviour which would otherwise appear to the objective observer as selfish, irresponsible, and unbecoming of an executive responsible for the workplace health and safety of over 100 employees," Baird said.
Termination
Castilloux was finally fired on March 21, 2022 for ignoring the terms of an "expectation document" designed to improve communication between him and David Mitchell and to prevent Castilloux from making major decisions without consulting with him – including trying to fire the company's CFO and buying a $300,000 Kodak printer.
Just a few weeks after the expectation document was circulated, Castilloux had also started "secret discussions" about his plan to wrest control of the company from the Mitchell family, according to the ruling.
After his termination, Castilloux sued the company for wrongful dismissal and petitioned the court for an order directing the company be liquidated.
He told the court he was unemployed and unable to find work suited to his skills and experience.
He said he was unable to get money for his shares because the company's articles of incorporation prohibited the sale of his shares without David Mitchell's approval.
Castilloux said David Mitchell had so far refused to approve the sale, but David Mitchell told the court Castilloux hadn't asked for approval and had rejected the terms of the company's offer to buy his shares.
"This would seem to be the crux of the matter: the Mitchell family members are prepared to purchase Mr. Castilloux's shares, but not for a price that he is willing to accept," stated the ruling.
'Dismissal was not only justifiable, but inevitable'
Justice Baird agreed Castilloux's options were limited but said that alone didn't make it "just and equitable" to order the liquidation of a 96-year-old company against the wishes of the majority owners.
Baird said the removal of a shareholder as an employee or director isn't a sufficient reason to order the winding up of a company unless it's clear the removal was not in the best interest of the company.
Baird concluded that was not the case with Castilloux.
"He bears responsibility for his role in deliberately contriving a situation in which his dismissal was not only justifiable, but inevitable," he said.
"It would be neither just nor equitable to grant him the drastic remedy of a liquidation order in circumstances where the conflict that he claims to have rendered it necessary was substantially of his own making. The unanimous, rational, and entirely defensible ambition of the majority shareholders to carry on with business as usual must prevail."
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