Law360 Canada ( March 22, 2021, 9:22 AM EDT) -- Appeal by Baylin Technologies and 2385796 Ontario from a decision dismissing their application for an order requiring Gelerman to tender his resignation as a director of Baylin, as required under Baylin’s majority voting policy, and other declaratory relief. Pursuant to a 2018 asset purchase agreement, Baylin acquired from Spacebridge the undertaking and assets of Spacebridge’s satellite and radio frequency, terrestrial microwave and antenna equipment and services business. Gelerman was the founder of Spacebridge and its president and CEO. It was a condition to the closing of the 2018 agreement that Baylin enter into the Consulting Agreement with Spacebridge. The Consulting Agreement provided for consulting services to be provided by Gelerman, in his capacity as CEO. The amounts due under the Consulting Agreement were to be paid out over a two-year period. Baylin was listed on the Toronto Stock Exchange (TSX) and was required to adopt a Majority Voting Policy to comply with the TSX rules. At the 2019 Annual General Meeting, Gelerman only received 29 per cent of the eligible votes for his re-election. 2385796 and other shareholders withheld their votes relative to Gelerman’s election. Gelerman did not submit his resignation as required by Baylin’s majority voting policy. The application judge found that Baylin’s majority voting policy did not comply with the TSX majority voting requirement. He found that both Spacebridge and Gelerman had an expectation arising from the background leading up to the 2018 Agreement and its terms that Gelerman would be a director of Baylin for the two-year period. The application judge also found that they had a reasonable expectation that Baylin would act honestly and in good faith in assisting Gelerman to be elected to the Baylin board for the two years in issue. The application judge also found the policy to be a breach of Gelerman’s reasonable expectations as a director and that it was oppressive, unfairly prejudicial to, and disregarded Gelerman’s role as a director. The application judge was satisfied that the reason the majority voting policy was drafted in the manner it was, was to enable the removal of Gelerman as a director of Baylin....