Jamaica’s Supreme Court has ordered Chas E. Ramson Ltd, or its directors, to buy out Sally Fulton, the sister of its chairman, after finding the directors exercised their powers in a way that “unfairly disregarded her rights as a shareholder”.
Fulton holds 101 of the company’s 400 issued shares, the court heard. Fulton and the defendants agreed that a buyout was the right remedy. The parties, however, disagreed on the details.
“Given the undisputed and uncontested breakdown in the relationship between the parties, it is accepted by both sides that the appropriate order in the circumstances of this case is a buyout order,” Justice Brown Beckford wrote in a judgment issued in September.
Chas E. Ramson, which began in 1922, distributes brands including Ramson’s, Sno White, Cloud Nine, Cubbies, and partners in the production of Foska Oats, according to its website.
Brown Beckford of the Supreme Court’s Commercial Division set the price at just over $6.5 million a share. That values the company at $2.1 billion on the low end, after removing a villa, and applying discounts to the valuation offered by Fulton’s expert, Christopher Fagan.
GRANDDAUGHTER OF FOUNDER
Fulton was never employed in the company’s operations. She discovered in around 2014 that she held shares in the company, and asserted that she has been excluded from participating in the affairs of the company, court documents indicated. Fulton is the granddaughter of the late founder Charles ‘Chas’ Ramson, and the elder daughter of the late Lauritz Ramson, former chairman of the company.
She sued certain family members in 2018 under the Companies Act, in a case passed through the lower courts, including the Court of Appeal in 2021.
The defendants are her brother John Ramson, executive chairman; her sister Susan Silvera, company secretary; John Ramson’s sons Christopher and Phillip Ramson; Silvera’s husband, Noel Raymond Silvera; and the company.
The defendants were given 30 days from the date of the order to tell Fulton in writing who will buy the shares. If they give no notice, the company must buy them, the ruling indicated. The purchase should be completed by December 31, but additional time was allowed for the defendants to weigh their options.
The Financial Gleaner sought comment from John and Phillip, who were unavailable up to print. Lawyers for the directors said they haven’t decided whether to appeal. “Our clients respect the court’s ruling and are reviewing the written judgment and orders with care,” said Georgia Gibson Henlin, KC, in a Financial Gleaner interview. “The court granted a 42-day stay to allow the defendants to consider their options.”
Michael Hylton, KC, who represents Fulton, said she would oppose any appeal. “If an appeal is filed, Mrs Fulton intends to oppose it and will consider whether any further steps in relation to the judgment are appropriate,” he said in a Financial Gleaner interview. He declined to comment on the merits of a potential appeal.
Ransford Braham, KC, who represents the company, argued at trial that Fulton failed to establish oppression and that dividends were paid in accordance with the Companies Act.
In the judgment, Justice Beckford found, however, that the first to fifth defendants, and the five directors, “have exercised their powers in a manner that was oppressive or unfairly prejudicial to the claimant or unfairly disregarded her rights as a shareholder”.
OWNERSHIP DISPUTE
The central question was how many shares Fulton owns. The directors argued that Fulton beneficially owned only seven of the 101 shares and held the other 94 in trust for another entity, Caribbean Cutlery Limited, citing a 1985 share-transfer document. The judge found there was insufficient evidence to recognise the alleged trust and declared Fulton the legal and beneficial owner of all 101.
Gibson Henlin added more detail to the matter. “The court expressly considered the 1985 signed transfer instrument concerning the 94 shares and treated it as prima facie evidence relevant to Caribbean Cutlery Limited’s claimed interest,” she said. The judgment says Fulton is “presently” the owner, and that the directors aren’t legally entitled to assert Caribbean Cutlery’s interest.
