PARTNERSHIPS - Interests and duties of partners - Share of capital and profits

Law360 Canada (April 14, 2023, 6:33 AM EDT) -- Appeal by Mark Libfeld (Mark) from the trial judge’s determination that he was not a partner in the Shanontown transaction. Appeal by Corey Libfeld (Corey) from the exclusion of the Shanontown transaction from the wind-up order. Appeals by Sheldon Libfeld (Sheldon) and Jay Libfeld (Jay) seeking to set aside paragraph 7 of the judgment requiring each brother to certify compliance with the terms of the judgment and the related data room order that created an electronic repository of Group documents. This set of appeals originated from a breakdown of the business relationship of four Libfeld brothers. The brothers, Sheldon, Mark, Jay, and Corey, were equal owners of The Conservatory Group (Group), a Toronto-based real estate development business. By 2015, the relationship between the brothers descended into open conflict. Sheldon and Jay sought to remain as partners with each other and allow the Group to carry on in some form. Mark and Corey sought to dissolve the Group entirely and carry on business alone. In the alternative, Mark sought a total liquidation, wind-up, and sale of the Group on the condition that none of the brothers be permitted to purchase any of the assets of the Group. Additionally, Mark sought a declaration that lands in Caledon, Ontario, owned by Shanontown Developments Inc. (Shanontown), itself owned by Sheldon, Jay, and Corey, were assets of the Group, such that Mark would be entitled to a 25 per cent partnership interest in the Shanontown lands. The trial judge made no findings of oppression or breach of fiduciary duty against any party and dismissed Mark’s application for the declaration that Shanontown be included as an asset of the Group.  Most significantly, the trial judge ordered that the Group be wound up and sold under the supervision of a court-appointed Sales Officer, with all of the brothers being permitted to participate in the sales process as potential purchasers (Judgment). On appeal, Mark argued that the trial judge erred by failing to apply the principles of partnership law in analyzing the Shanontown transaction....
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