RJM56 Holdings Inc. c. Bazinet  
2022 QCCS 3078  
(Commercial Division)  
DATE: August 17, 2022  
PAGE: 2  
In December 2018, Plaintiffs RJM56 Holdings Inc. (“RJM”) and Kobuck Ltd.  
(“Kobuck”), as shareholders of Replicor Inc. (“Replicor”) filed the present oppression  
remedy proceedings based on Section 241 and following of the Canada Business  
Corporations Act (“CBCA”), claiming that they have been the object of oppressive and  
unfairly prejudicial conduct by Replicor and by its directors Messrs. Michel Bazinet (“M.  
Bazinet”), Léo Bazinet (“L. Bazinet”) and Andrew Vaillant (“A. Vaillant”)1 as they  
disregarded their interests as shareholders which also constituted a breach of their  
fiduciary duties.  
More precisely, Plaintiffs represented at all relevant times by Mr. Martin McCarthy  
(“M. McCarthy”) alleged that they were induced to purchase shares of Replicor at certain  
prices based on representations that were not honoured by the Management Directors.  
These representations involved Venrock (“Venrock”), a U.S. venture capital firm,  
that was to make a significant new investment in Replicor.  
On the basis of those representations, Plaintiffs purchased USD $7.8 million  
shares (class ‘A’ common shares) in Replicor in December 2014 (760,000 shares at USD  
$5/share for a total subscription price of USD $3.8 million) and in March 2015 (400,000  
shares at USD$10/share, for a total subscription price of USD2 $4 million).  
As Replicor, through its Management Directors, refused to complete the  
contemplated transaction with Venrock, the company failed to honour the representations  
made to McCarthy by another one of its directors and, as a result thereof, failed to meet  
Plaintiffsreasonable expectation that Venrock would proceed with its new investment  
based on a price of $15/share.  
In light of the foregoing, Plaintiffs alleged that they have been subject to oppression  
and unfairly prejudicial conduct as they were wrongly induced to pay inflated prices3 for  
their shares.  
In Plaintiffs’ view, the appropriate remedy for this oppression is the issuance by  
Replicor of 1,960,000 class ‘A’ common shares at no cost to them.  
From Defendants’ standpoint, Plaintiffs’ oppression remedy recourse is without  
merit and should be dismissed.  
In their opinion, Plaintiffs have failed to establish any of the applicable criteria  
giving rise to an oppression remedy, namely:  
M. Bazinet, L. Bazinet and A. Vaillant are hereinafter collectively referred to as the Management  
2 Henceforth, the Court shall omit to refer to USD.  
3 $5/share and $10/share.  
- to establish a reasonable expectation;  
PAGE: 3  
- to demonstrate that the Management Directors acted in a manner that could be  
deemed oppressive; and  
- to demonstrate that they suffered any damages justifying the remedy sought.  
Furthermore, the remedy sought is entirely inappropriate in the circumstances.  
For one, prior to the hearing on the merits, Plaintiffs transferred the entirety of their shares  
in Replicor to third parties for an unknown consideration. Although the transfer would have  
occurred in February 2021, Plaintiffs also omitted to inform Defendants and the Court of  
the same. This relevant fact was only discovered haphazardly during M. McCarthy’s  
Finally, if granted, the remedy sought would confer an undue advantage onto  
Plaintiffs, and unduly prejudice Replicor as well as its other existing shareholders who  
would see their shareholdings significantly diluted.  
[12] The Court agrees with Defendants’ position.  
[13] Plaintiffs’ oppression remedy proceedings will be dismissed for the following  
[14] Replicor is a privately owned corporation established under the CBCA. Replicor is  
involved in the research for a cure for Hepatitis B and D.  
[15] Michel Bazinet has been the Chief Executive Officer of Replicor since January  
2003, and its Chief Medical Officer since March 2015. He is the inventor or co-inventor of  
different patents belonging to Replicor. He has also been a director of Replicor since June  
[16] Andrew Vaillant has been the Chief Science Officer of Replicor since December  
2002. He is the inventor or co-inventor of different patents belonging to Replicor. He was  
also a director of Replicor from February 2015 to March 16, 2016.  
[17] Lastly, Léo Bazinet has held the position of Vice President of Administration of  
Replicor since September 2001. He was also a director of Replicor from March 2003 to  
March 16, 2016.  
PAGE: 4  
[18] Plaintiffs, RJM56 and Kobuck, were shareholders of Replicor4. Both entities are  
holding companies, who are effectively controlled by Martin McCarthy as director of RJM  
and the person responsible for investment decisions at Kobuck.  
[19] The Mis-en-cause, Mr. Robert Jennings (“R. Jennings”) was a Director of Replicor  
as of 2011.5 Prior to Replicor, M. Bazinet and R. Jennings had known each other for  
years. In February 2015, R. Jennings was appointed Chairman of Replicor’s Board of  
directors 6 (the “Board”). R. Jennings was later removed as Chairman in November 2015  
(at which time he was replaced by CEO M. Bazinet).  
[20] R. Jennings’ brother, David Jennings (“D. Jennings”), is an attorney who was a  
director of Replicor. D. Jennings joined the Board in 2005.  
[21] Prior to Plaintiffs’ investments in Replicor in 2014, M. McCarthy had known both  
R. Jennings and D. Jennings (collectively the “Jennings Brothers”) for close to 30 years.  
[22] Venrock is a U.S. venture capital firm that is the investment arm of the well-known  
American Rockefeller family. It is specialized in equity funding for companies such as  
[23] Plaintiffs invested three times in Replicor:  
- on July 9, 2014, at a price of $2.50/share7 (the “First Investment”);  
- on December 17, 2014, at a price of $5/share8 (the “Second Investment”); and  
- on March 6, 2015, at the price of $10/share9 (the “Third Investment”).  
[24] In July 2014, D. Jennings advised M. McCarthy of an investment opportunity with  
Replicor. At the time, D. Jennings was a director of Replicor and its legal counsel.  
[25] Plaintiffs alleged that the Second and Third Investments were made based on  
representations of R. Jennings, a close personal friend of M. McCarthy who was then a  
director of Replicor. M. McCarthy claims to have full confidence in R. Jennings's ability,  
judgment, and his honesty. McCarthy relied on his friend’s representations to make those  
additional investments.  
4 P-6 and P-9.  
5 P-2.  
6 P-7.  
7 RJM acquired 50,000 Class ‘A’ shares (P-3). At trail, McCarthy indicated that he was “taking a flyer”,  
which he explained meant taking a small position in the company.  
8 Kobuck acquired 660,000 Class ‘A’ Shares and RJM acquired 100,000 Class ‘A’ shares (P-6).  
9 Kobuck acquired 300,000 Class ‘A’ Shares and RJM acquired 100,000 Class ‘A’ shares (P-9).  
PAGE: 5  
[26] According to Plaintiffs, R. Jennings informed M. McCarthy, in November 2014, that  
Venrock, a venture capital firm and existing shareholder in Replicor, was considering  
making another significant investment in Replicor.  
[27] According to R. Jennings, in the fall of 2014, Venrock was already a shareholder  
in Replicor, having purchased, in July 2014, $2.5 million worth of shares of Replicor at  
$2.50/share. At the same time, another institutional investor, QVT, whom Venrock  
brought in, had also purchased $2.5 million worth of shares at $2.50/share.  
[28] Apparently, Venrock was supposed to make a further major investment in Replicor  
during the fall of 2014 at $5/share after some due diligence. But it did not occur, thus  
prompting another meeting between Venrock and Replicor in November 2014.  
[29] M. McCarthy testified that in November 2014, R. Jennings informed him of the  
a. Replicor had just appointed R. Jennings as the person in charge of raising funds  
from venture capitalists and that there were several funds interested in acquiring  
shares in Replicor;  
b. Venrock was conducting due diligence and was considering making a significant  
investment in Replicor at $5/share and that if M. McCarthy wanted to invest at that  
stage, he would have to do so at $5/share;  
c. Replicor had decided to expand its Board that was to become an independent  
Board10, by including, inter alia, Dr. Bong Koh ("B. Koh"), a representative from  
Venrock; Replicor was taking steps to implement this expansion; and  
d. Replicor had agreed to produce audited financial statements.  
[30] On December 8, 2014, M. Bazinet sent an email to all shareholders11 (including  
Venrock and RJM) providing an update on a variety of subjects including Corporate  
Governance and Capital markets and Fund Raising:  
Corporate Governance - Over the next few months we expect to make changes to  
our Board of Directors by adding new Directors that will offer a more diverse set of  
skills and experience. It is important for the company to have, and to be seen to  
have, this stewardship.  
Capital Markets and Fund Raising - We have raised the funds that will be required  
for all our planned activities for 2015. The most recent fund-raising was completed  
in the last few days at US$5 per share, which puts a valuation of US$150m on the  
company. I also want to advise you that Rob Jennings, one of our directors, will be  
taking over the role of managing future communications with the Investment  
community. Rob, as many of you already know, has extensive experience with the  
10 Instead of a Board controlled by the three Management Directors.  
11 P-5.  
PAGE: 6  
capital markets. He has worked with companies that have raised hundreds of  
millions of dollars and been involved in over 30 mergers and acquisitions in the  
last 20 years. He was also CEO of a NASDAQ listed company that went from a  
handful, to over 300 employees in a six-month period so we expect this past  
experience will be of great assistance as we expand our operations.  
[Emphasis added]  
[31] M. McCarthy claimed that the foregoing email confirming the promotion of  
R. Jennings within the Board added even more credence to the information that the latter  
was providing to him. However, M. Bazinet’s email was totally silent on Venrock.  
[32] A week later, on December 17, 2014, based on R. Jennings’s representations to  
M. McCarthy, the latter caused Plaintiffs to purchase a total of 760,000 class ‘A’ common  
shares in Replicor for $3.8 million (660,000 shares by Kobuck and 100,000 shares by  
RJM) at a price of $5/share.12  
[33] All in all, M. McCarthy claimed that he decided to acquire via Plaintiffs more shares  
in Replicor at a price of $5/share based on R. Jennings’s verbal representations that, to  
all intents and purposes, Venrock was coming on board with a significant investment to  
be made based on that same share price.  
[34] Venrock’s aforesaid investment did not materialize.  
[35] On February 11, 2015, Replicor held a meeting of the Board at which time it was  
resolved to appoint R. Jennings as Chairman:  
The Board discussed the developing practice of both public and private companies  
separating the role of Chief Executive Officer and the Chairman of the Board. In  
order to adopt good corporate governance practice, Dr. Bazinet suggested that  
Robert Jennings be appointed Chairman effective immediately after this meeting.  
After further discussion by the Board, the following motion was passed  
BE IT RESOLVED that the board of directors appoint Robert Jennings as  
Chairman of the Board of Directors effective immediately after this meeting.13  
[36] At that time, the Board also dealt with a private placement to be made by Venrock  
and approved the execution of a term sheet (which was more of a letter of intent) by the  
CEO M. Bazinet acting on behalf of Replicor:  
12 P-6.  
13 P-7.  
PAGE: 7  
The proposed term sheet from Venrock for a private placement of between $20 to  
$25 million USD at a price of $10 USD per Class A preferred share had been  
circulated to the directors. The proposed private placement was scheduled to close  
at the end of February, well in advance of any results from the Moldova clinical  
trial. The directors discussed the terms of the proposed private placement. It was  
agreed if the private placement could not occur prior to early March that the private  
placement would be delayed until after EASL when a new valuation of the  
Corporation’s shares would be likely. The private placement was believed to be in  
the best interests of the Corporation as it would provide sufficient funds to operate  
the Corporation throughout 2015 and 2016 and would align strategic venture  
capital funds with the Corporation’s goals. After further discussion by the Board,  
the following motion was passed unanimously.  
BE IT RESOLVED that the board of directors (i) approve the execution and  
delivery of the letter of intent issued by Venrock, subject to such amendments as  
deemed prudent by the Corporation’s CEO [Bazinet], (ii) authorize the negotiation,  
execution and delivery of an investment agreement and shareholders agreement  
to reflect the terms set out in the Venrock letter of intent, and, (iii) authorize the  
calling of a shareholders meeting to create Class A Preferred shares and to  
address other matters related to the proposed private placement, all subject to  
further Board resolutions once details of the private placement have been settled.14  
[Emphasis added]  
[37] Following the February 7, 2015, Board meeting, two non-binding term sheets were  
signed for a potential investment in Replicor by Venrock (the “Prospective Additional  
Venrock Investment” or “PAVI”):  
- An initial term sheet dated February 18, 2015, for an investment amount up to  
$25 million at a price of $10/share (the Initial Term Sheet”)15; and  
- An amended term sheet dated May 20, 2015, for an investment amount up to  
$17.5 million at a price of $15/share (the “Amended Term Sheet”)16.  
[38] Pursuant to the Initial Term Sheet which was signed by M. Bazinet, Venrock  
undertook to purchase up to $25 million shares in Replicor at $10/share with an  
anticipated closing date of March 6, 2015.17  
[39] At the same time in February 2015, R. Jennings would have made the following  
representations to M. McCarthy:  
a. The transaction with Venrock was being finalized and Venrock would be  
investing approximately $20 million at a price of $10/share;  
14 Ibid.  
15 P-8. Approved unanimously by the Board on February 11, 2015 (P-7).  
16 P-11.  
17 P-8.  
b. Non-management Board members were being actively recruited; and  
c. Venrock would be appointing B. Koh as one of Replicor’s directors.  
PAGE: 8  
[40] R. Jennings further advised M. McCarthy that if he (i.e., via Plaintiffs) was  
interested in acquiring more shares in Replicor, it should be done at that time.  
[41] M. McCarthy claimed that R. Jennings’s representations - which he also construed  
as some form of assurances - prompted Plaintiffs to make the Third Investment on March  
6, 2015, at the price of $10/share.18  
[42] R. Jennings subsequently advised M. McCarthy that Venrock’s acquisition of  
additional shares in Replicor would be delayed as Venrock had not completed its due  
[43] The Court noted that in March 2015, Replicor issued shares at $10/share to  
investors other than Venrock.19  
[44] On May 20, 2015, Venrock signed the Amended Term Sheet20, which amended  
and replaced the Initial Term Sheet.  
[45] Pursuant to the Amended Term Sheet, Venrock undertook to purchase up to $17.5  
million shares of Replicor at $15/share.  
[46] M. Bazinet signed the Amended Term Sheet on behalf of Replicor.  
[47] The closing involved the execution of several documents described as  
Shareholders Agreementsto be prepared during the due diligence process:  
Closing: Subscription Agreement fully executed within 21 days from the date first  
set forth above and with closing and the execution of the Shareholders  
Agreements (comprised of a Voting Agreement, a Right of First Refusal and Co-  
Sale Agreement and an Investors’ Rights Agreement) to occur within 21 days of  
execution of the Subscription Agreement.21  
[Emphasis added]  
The Initial Term Sheet and the Amended Term Sheet were negotiated on behalf  
of Replicor through the Jennings Brothers, so was the implementation of the Amended  
Term Sheet.  
18 P-9.  
19 P-10.  
20 P-11.  
21 Ibid.  
PAGE: 9  
[49] The Jennings Brothers also exchanged and negotiated directly with Venrock and  
their Canadian attorneys the terms and conditions of the contractual documents22 that  
needed to be approved by the Board of Replicor to be binding and constitute a  
[50] There is no doubt that based on the evidence, Venrock was an attractive  
institutional investor with a good reputation given that they had investments in other  
biotech companies.  
[51] The Court understands that a decision to call for a Special Meeting of Replicor’s  
Board, to be held on June 17, 2015 (the “June 17th Board Meeting”), was made by CEO  
M. Bazinet on June 16, 2015, with the consent of his colleagues L. Bazinet and A. Vaillant.  
[52] M. Bazinet’s decision stemmed from recent exchanges between himself and the  
Jennings Brothers which evidenced a serious difference of opinion regarding the latest  
proposed draft Shareholders Agreements as they were in mid-June 2015 (the “Draft  
Agreements”) that clearly suited the Jennings Brothers, but not M. Bazinet23 who wanted  
to extend the timeline which involved a signing session by June 19, 2015.  
[53] Indeed, a few days before the June 17th Board Meeting, emails were exchanged  
between M. Bazinet and the Jennings Brothers about the Draft Agreements.  
[54] To all intents and purposes, from M. Bazinet’s standpoint, after consulting  
Replicor’s outside counsel, Séguin Racine, the Draft Agreements were still not in a form  
entirely acceptable to Replicor and its shareholders who were to eventually approve the  
same at 70%. Further review and negotiations were needed, which entailed that the  
closing could not take place by June 19, 2015.24  
[55] In M. Bazinet’s view, that timeline was no longer feasible nor realistic as further  
negotiations were warranted on certain outstanding issues regarding the Draft  
[56] The Jennings Brothers were categorically opposed to any further delays, and they  
let M. Bazinet know that any further negotiations with Venrock were totally out of the  
[57] From their standpoint, any further negotiations and delays were not possible. The  
terms and conditions of the Draft Agreements were already extremely favourable to  
Replicor and to its shareholders considering that Venrock was an institutional investor.  
As D. Jennings was the sole lawyer on the Board, R. Jennings recommended that M.  
Bazinet rely on his professional opinion that the Draft Agreements contained the best and  
22 Including the Shareholders Agreements.  
23 And his two fellow Directors L. Bazinet and A. Valliant.  
24 P-37.  
PAGE: 10  
most favourable terms and conditions that Replicor could possibly hope for since  
Venrock’s counsel had basically accepted all of their latest proposed modifications.25  
[58] The three Management Directors were never involved in the negotiations with  
respect to the Draft Agreements. They basically had to rely exclusively on the  
representations and assurances of the Jennings Brothers.  
[59] On June 12, 2015, at 09h36, R. Jennings wrote the following to M. Bazinet:  
[…] I have already negotiated these terms with Bong [Venrock] to the best of my  
ability and I don't think they are going to get much better.26  
[60] At 16h40 on the same day, D. Jennings let M. Bazinet know in no uncertain terms  
that no further negotiations were possible with Venrock. That was it!  
Regarding any conference call, l should note that l am happy to review the terms  
of the agreements for your understanding but I confirm the documents do reflect  
the terms set out in the Letter Of Intent dated May 20. In that regard, there is  
no further negotiation so any desired changes would not be adopted by  
Venrock counsel. Most of these documents are standard legal clauses (the US  
National Venture Capital Association precedents were used for their preparation)  
so I expect your questions will be limited to understanding the boilerplate if you  
desire to have the conversation.27  
[Emphasis added]  
[61] On June 16, 2015, D. Jennings wrote again to M. Bazinet in reaction to receiving  
a Notice of convocation to a Special Board Meeting of June 17, 201528:  
Dear Michel:  
I was surprised to receive your email just now calling a special meeting of the  
directors tomorrow. I will attempt to rearrange my schedule but before I do that, I  
would like to understand the need for the meeting.  
If you are calling this meeting to pass the standard resolutions to approve the  
Venrock transaction, that is best done just prior to closing (i.e. when we have the  
shareholders agreements signed by our shareholders) and using the exact  
language Racine Seguin will require for their opinion.  
If you are calling the meeting because you want to reconsider whether to do the  
Venrock transaction and launch other "financing strategies'', is it because we have  
25 P-37.  
26 P-37, page 2.  
27 P-37, page 1.  
28 P-15.  
PAGE: 11  
received a binding offer from a pharma? That is the only reason I can think of that  
would excuse a decision to back out of the deal we have with Venrock.  
If you want to reconsider the Venrock deal without another binding pharma deal in  
hand, I think I need to make a few important points. Firstly, the terms in the LOI  
and the closing documents that are in the final stages of being drafted are  
the same so there is nothing new to consider. The decision to proceed was  
made in early May when we all agreed that the LOI should be signed. When you  
executed the LOI on May 20, 2015, you set up a series of expectations of the  
financial community. Sure, the LOI is not "legally binding", but having worked with  
VCs [Venture Capital] for almost 25 years, I can categorically state that if Replicor  
doesn't complete this transaction now Replicor’s reputation will be ruined in the  
financial community. I would be shocked if another VC, private equity firm, or  
investment bank would even talk with Replicor in the future (Venrock would tell  
everyone that asks not to bother because "even if you think you have a deal they  
won't honour it"). This deal has taken 4 months to complete so it is probable that  
Replicor will run out of money before any other financing could be completed.  
All the documents have been prepared, due diligence almost done and  
commitments made in order to close the deal. Venrock and its counsel have  
been easy on Replicor and we are ready to go. If you are calling the meeting to  
confirm that, then I give a loud "yes" - we can instead call the meeting in a few  
weeks. If the meeting is to consider abandoning the $17.5 million financing then I  
think any decision to do that would permanently and irreparably harm the  
Can you let me know what is your purpose for calling the meeting?29  
[Emphasis added]  
[62] At the June 17th Board Meeting, the Jennings Brothers reiterated their strong  
objections to delay the closing, but that did not move the majority of Directors.  
[63] The June 17th Board Meeting was presided by CEO M. Bazinet with a lawyer from  
Replicor’s external law firm Séguin Racine acting as Secretary of the meeting. 30  
[64] With respect to Venrock’s Amended Term Sheet, the three Management Directors  
voted to terminate the Amended Term Sheet as more fully appears from the minutes of  
the Board meeting:  
29 P-16.  
30 At the June 17th Board Meeting, the CEO M. Bazinet was elected President of the meeting and a lawyer  
of the firm of Séguin Racine was appointed Secretary of the meeting with the Jennings Brothers voting  
PAGE: 12  
The President [M. Bazinet] discusses receipt by the board members of Venrock’s  
offer and the corresponding draft agreements and also acknowledges having  
received strong argumentation from both Rob and David Jennings who believe that  
Replicor should accept Venrock’s offer. The Board Members having had time to  
review the documentation are asked to decide whether or not to accept Venrock’s  
offer and the President puts forth as a motion the following prepared statement:  
The draft agreements we have received contain numerous covenants,  
representations and warranties which are too burdensome for Replicor and  
as such, the terms and conditions are not in the best interest for Replicor.  
Replicor is not in financial distress. The current cash on hand amounts to  
approximately $12 million. Venrock’s offer is not in Replicor’s best interests  
and the management is convinced that new opportunities will arise.  
Accordingly, I propose the adoption of the following measures to take effect  
1- to terminate any negotiations and discussions regarding  
Venrock’s offer;  
2- not to execute the agreements with Venrock;  
3- to terminate the term sheet and any other agreements that may  
have been executed in connection with Venrock’s offer;  
4- to prepare a letter whereby Replicor terminates the term sheet  
and any negotiations regarding Venrock’s offer; and  
5- to pay Venrock any fees and expenses that shall be borne by  
Replicor pursuant to the term sheet.”  
The foregoing motion is approved by majority of votes, Messrs. D. Jennings and  
R. Jennings dissenting with written dissent to follow.31  
[Emphasis added]  
[The “June 17th Decision”]  
[65] The June 17th Decision made by the majority of Directors with the dissidence of  
the Jennings Brothers, is essentially at the core of Plaintiffs’ alleged acts of oppression.  
[66] Always relying upon R. Jennings’s previous oral representations to M. McCarthy,  
the latter is essentially arguing that the Jennings Brothers, being the Board members who  
negotiated the Draft Agreements and who were highly experienced with institutional  
investors, the other three Management Directors could not reasonably and legitimately  
decide to refuse to execute the Draft Agreements that, in the Jennings Brothers’ opinion,  
31 P-17.  
PAGE: 13  
met the terms and conditions of the Amended Term Sheet. Therefore, the Management  
Directors should have voted in favour of signing the Draft Agreements on behalf of  
Replicor by June 19, 2015.  
[67] In other terms, the decision of M. Bazinet, L. Bazinet and A. Vaillant being the  
Board members who voted to terminate the Amended Term Sheet in order to avoid the  
execution of the Draft Agreements discussed at the June 17th Board Meeting, constituted  
a flagrant dereliction of their fiduciary duties to act and to make a decision in the best  
interests of Replicor and of its shareholders.  
[68] Their oppressive behaviour caused serious prejudice to Plaintiffs who fully  
expected Venrock to proceed with the PAVI32 and make a further substantial investment  
in Replicor based on a price of $15/share.  
[69] Moreover, having previously approved the Initial Term Sheet and the Amended  
Term Sheet, the three Management Directors could not reversetheir own decisions that  
had been made unanimously with the Jennings Brothers who were not only satisfied with  
the content of the proposed Draft Agreements, the terms and conditions of which were  
extremely favourable to Replicor and its shareholders, but that said terms and conditions  
were also acceptable to Venrock’s lawyers who would not entertain any further  
negotiations and modifications.33  
[70] As evidenced by the following, contrary to the Jennings Brothersrepresentations  
to the Management Directors, Venrock’s representative, B. Koh, soon after indicated to  
M. Bazinet that Venrock was really interested in pursuing the negotiations and come to a  
mutually satisfactory agreement.  
[71] On the same day June 17, 2015, after the June 17th Board Meeting, M. Bazinet  
acting on behalf of Replicor sent to Venrock a letter of cancellation of the Amended Term  
[…] The Company hereby notifies Venrock of its desire to terminate  
negotiations immedia1ely with respect to the financing contemplated in the Term  
While the parties to the Term Sheet never entered into definitive documentation  
for the transaction contemplated in the Term Sheet, the drafts that were submitted  
to the Company by Venrock as non-negotiable are deemed to be unacceptable by  
the Company.  
32 The Prospective Additional Venrock Investment.  
33 P-37.  
PAGE: 14  
Accordingly, lhe Company agrees to pay upon receipt of supporting invoices the  
fees and expenses incurred to date by Venrock in the scope of the proposed  
transaction. […]34  
[72] M. Bazinet also sent the same letter to B. Koh via email:  
Dear Bong.  
Please find attached a letter that is being sent to you by overnight courrier in 2  
We had a special meeting of the Board of Directors today at which it was decided  
not to proceed with the proposed private placement as reflected in the transaction  
documents [the Draft Agreements].  
This is not indicative of a lack of desire on our part to potentially collaborate with  
Venrock in the future or to have productive discussions moving forward.  
Please kindly sign and return to my attention one copy of the received letter.  
I will call you to discuss our decision.35  
[Emphasis added]  
[73] A few minutes later, B. Koh replied to M. Bazinet as follows:  
Hi Michel:  
I would love to discuss this with you. I am very surprised by this decision  
particularly since we seemed to be done with all our work, there were many months  
of good dialogue and discussion and we seemed to have developed a good  
I am sure you have reasonable thoughts behind this and I would love to better  
understand them.  
Bong Koh36  
[Emphasis added]  
[74] M. Bazinet and B. Koh had a telephone conversation later on that evening during  
which M. Bazinet explained Replicor’s decision to terminate the Amended Term Sheet  
34 P-32, page 166.  
35 P-32, page 172.  
36 Ibid.  
PAGE: 15  
which was based on the fact that the Management Directors were led to believe that no  
additional negotiations were possible with Venrock, which apparently was never the case.  
[75] In the following minutes at 10:26 p.m., M. Bazinet sent B. Koh the following email:  
Subject: How we were told there is no negotiation possible  
As discussed, I have attached an email [dated June 12, 2015] from David  
[Jennings]37 saying there was no additional negotiation possible.  
At any rate, we do not want to just restart the negotiation, we want to cancel the  
previous term sheet and restart from scratch.  
Michel Bazinet38  
[Emphasis added]  
[76] On the following day, contrary to what the Jennings Brothers had led the  
Management Directors to believe on June 17, 2015, B. Koh wrote back indicating that he  
was agreeable to restart the discussions and find a common ground:  
Hi Michel:  
Sorry for the slight delay in responding - I have been in meetings all day.  
I can see your point of view from the below e-mail and why you'd like to start over  
which I understand.  
In any case, I look forward to restarting our discussion so that you and Replicor  
are happy. I am optimistic we can find a common ground!  
So in terms of times to chat next week, I have availability 1-5 PM Monday, 10-5  
PM Thursday and 12-5 PM Friday ET. Do any of those times work for you?  
[Emphasis added]  
37 P-32, page 175 and P-13.  
38 P-32, pages 174-175.  
39 P-32, page 174.  
PAGE: 16  
[77] On June 19, 2015, B. Koh reiterated to M. Bazinet his willingness to reach an  
agreement with Replicor:  
Hi Michel:  
I hope you are well. Attached is our signed letter terminating our previous term  
Let me know if any of those times I sent you work to chat next week. I think we can  
reach an agreement mutually satisfactory to us both. No rush - take your time. We  
can even chat later.  
Thank you and I hope you have a great week-end!  
[Emphasis added]  
[78] In July 2015, the two parties exchanged and reviewed, via their respective legal  
counsel41, new draft Shareholders Agreements and were discussing adding a  
representative of Venrock on the Board.42  
[79] On July 17, 2015, B. Koh wrote to M. Bazinet indicating again:  
I personally feel we can come to a place we are both happy with.43  
[80] In September 2015, the negotiations on a new term sheet and new draft  
Shareholders Agreements were being pursued actively via their respective lawyers.44  
[81] On September 18, 2015, B. Koh wrote the following email to M. Bazinet evidencing  
that the draft Shareholders Agreements were being modified at Replicor’s request  
contrary to what the Jennings Brothers were pretending on June 17, 2015:  
Hi Michel:  
I just spoke with our counsel and external counsel. There are a number of material  
changes to the agreement. I am completely okay with that as I knew you wanted  
to make changes.  
40 P-32, page 176.  
41 Séguin Racine was acting on behalf of Replicor.  
42 P-32, page 178.  
43 P-32, page 178.  
44 P-32, pages 180-260.  
PAGE: 17  
However, they inform me that we really need a term sheet from the company to  
come to a common understanding before they reengage in the documentation (the  
external counsel).  
Hence, it would be great if you could have your counsel draft a term sheet reflecting  
these changes. Once we agree (and I think we should be able to), we can advance  
Thank you!  
[82] On September 23, 2015, Replicor sent the new Term Sheet to Venrock.46  
[83] By October 2015, it was contemplated that Venrock would invest $15M in Replicor  
by acquiring shares at $15/share.47  
[84] On November 3, 2015, M. Bazinet sent an updated term sheet to B. Koh having  
accepted all changes requested by Venrock including reducing the share price to  
Hi Bong.  
As discussed yesterday, I am sending the updated term sheet. We accepted all  
the changes requested by Venrock except for the items we have already  
We have also considered the issues you raised in term of pricing. In view of this,  
the price per share has been reduced to $12.  
I left you a message earlier simply because I wanted to let you know about the  
share price. No need to call unless you need to clarify something.  
I would appreciate feedback from you at your earliest convenience.  
Best regards48  
[85] On the same day, November 3, 2015, B. Koh replied to M. Bazinet as follows:  
Hi Michel:  
Thank you - sorry for not picking up but I was in a meeting.  
45 P-32, page 260.  
46 P-32, pages 262-281.  
47 P-32, pages 282-292.  
48 P-32, pages 295-314.  
PAGE: 18  
Thank you for the flexibility in pricing - that makes it easier for me internally and  
I think we have a deal - I am just need to run it by a couple partners.  
There is one change I am going to make on the TS [Term Sheet] - right now it says  
three BOD [Board of Directors] members from existing BOD and one independent.  
I was going to change the language to two BOD members from existing BOD (you  
and Andrew [Vaillant]) and two independent based on our conversation yesterday.  
Let me know if I misheard you?  
I am also sending this to our counsel.  
Thank your,  
[Emphasis added]  
[86] All in all, despite deemed to be impossible by the Jennings Brothers, negotiations  
with Venrock led by Mr. Michel Bazinet on behalf of Replicor continued well after June  
17, 2015. These negotiations resulted with a new term sheet on November 3, 2015 (the  
New Term Sheet”), which although it was not signed, appeared to be satisfactory for  
Venrock and Replicor, under reserve of a final decision from both parties.  
[87] However, soon after, due to a letter received at the time from the U.S. Food and  
Drug Administration (the “FDA”) that appeared to be critical of Replicor’s proposed human  
clinical testing to be performed in the USA, Venrock decided to suspend negotiations and  
not conclude the transaction with Replicor until further developments on the FDA front.  
[88] It took three years for Replicor to resolve its issues with the FDA.  
[89] Although Venrock remains a shareholder of Replicor, the parties never followed  
up on the New Term Sheet of November 2015. Instead, Replicor has been exploring other  
avenues with major pharmaceutical companies.  
[90] The events surrounding the June 17th Board Meeting brought to a head a major  
conflict between the Management Directors and the Jennings Brothers that had been  
simmering for a while. D. Jennings ceased to act as legal counsel for Replicor.  
[91] On January 21, 2016, R. Jennings instituted oppressive remedy proceedings50  
against M. Bazinet, L. Bazinet and A. Vaillant essentially seeking on the merits to annul  
the June 17th Board Meeting and the resolutions adopted at that time.  
49 P-32, page 294.  
50 500-11-050029-160 (the « Jennings Lawsuit »). A Total Discontinuance was filed on April 6, 2017.  
PAGE: 19  
[92] On an interim basis, R. Jennings was seeking the convocation of an Annual  
General Meeting of Replicor’s shareholders (“AGM”) and an order that M. Bazinet, L.  
Bazinet and A. Vaillant be temporarily suspended and relieved from their functions as  
directors of Replicor with a view of having them ultimately replaced at the next AGM.51  
[93] In a Shareholder Update dated February 3, 2016, the shareholders were apprised  
on the conflict and stalemate with the Board of directors as follows:  
Conflict and Stalemate within the Board  
In the summer of 2015, David Jennings who assumed the role of General Counsel  
of Replicor was terminated as a result of a disagreement with the Management of  
Replicor. He and his law firm received over $60,000 in fees and disbursements for  
2015. For the past six months, Mr. Robert Jennings and Mr. David Jennings, who  
have been members of the Board since August 2011 and November 2015  
respectively, are in profound disagreement with certain decisions of the Board. The  
disagreements relate in particular to the conditions of future financing and the  
abandonment of rights for over 70% of the current shareholders in the face of an  
eventual institutional investor (Right of First Refusal/IPO-Public Offering  
Robert and David Jennings are not collaborating with the majority of members of  
the Board and the Management no longer wishes to work with them.52  
[Emphasis added]  
[94] The shareholders were also informed of R. Jennings’s intention to remove M.  
Bazinet, L. Bazinet and A. Vaillant and place Replicor under tutorship:  
Robert Jennings wants to remove Management and place Replicor under tutorship  
On January 21st, 2016, at 5:45 p.m., Mr. Robert Jennings sent a legal proceeding  
to Replicor and all members of Management urgently requesting the Court, in  
particular to remove all Directors and place Replicor under tutorship, as of January  
22nd, 2016. The legal proceeding also called for the appointment of a sole Director  
of Mr. Jennings' choosing who is unknown to any of the members of Management.  
Contrary to what is claimed by Mr. Robert Jennings, Replicor's Management was  
willing to call an annual shareholders' meeting in December 2015; however, a  
certain director has not ceased to send multiple complaints and threats to  
Replicor's Board of Directors concerning these different meetings and agendas.  
The Directors of Replicor who are also part of Management, have always acted in  
good faith and in the best interests of the shareholders as a whole, and this has  
been the case since the start of Dr. Bazinet's involvement in Replicor.  
51 P-22.  
52 P-38.  
PAGE: 20  
The most important assets of Replicor are its patents, team of researchers and  
their know-how. Any interruption in the "prosecution" of these patents or in the  
current ongoing clinical activities could have a very negative impact on Replicor.  
As a reminder, all of Replicor's patents were developed by Dr. Andrew Vaillant,  
Dr. Jean-Marc Juteau and Dr. Michel Bazinet. In 2001, Dr. Michel Bazinet became  
shareholder, Director and Chairman of the Board of Replicor. Dr. Andrew Vaillant  
is the inventor of Replicor's NAP technology. He supervises all the intellectual  
property, the compliance with regulations for the manufacturing of drugs and the  
research and development activities of Replicor.  
Mr. Robert Jennings' actions and their potential outcomes, namely seeking to oust  
the current Directors and appoint a single outside Director, are likely to cause  
irreparable damage to Replicor's most important assets and to the value created  
for its shareholders.  
The scientific community would be shocked to see Drs. Vaillant and Bazinet  
relieved of their functions. Replicor would be deprived of key individuals needed to  
conclude financing propositions currently underway. The outcome of the  
proceedings initiated by Mr. Robert Jennings would result in dramatic  
consequences for Replicor.  
Replicor respects Canadian Corporate laws in force as well as all as all orders of  
any competent court. Replicor notes that the superior court of Montreal refused to  
urgently hear Mr. Jennings personal recourse. Mr. Jennings recourse is being  
disputed and will be treated according to its merits, if necessary, after March 21st,  
[Emphasis added]  
[95] The Court understands that an AGM actually took place soon after and that the  
shareholders sided with M. Bazinet preferring the latter’s proposed slate of directors as  
opposed to R. Jenningsproposed slate.  
[96] The Court also understands that the Jennings Lawsuit was never heard on its  
merits as on April 6, 2017, R. Jennings filed a Total Discontinuance.  
[97] The Jennings Brothers are no longer members of Replicor’s Board.  
[98] In terms of appropriate remedies, Plaintiffs are seeking the issuance by Replicor  
of some 1,960,000 additional shares representing the difference between the prices  
($5/share and $10/share) actually paid by RJM and Kobuck in the context of their Second  
and Third Investments and the price that they should have paid ($2.50/share):  
53 Ibid.  
PAGE: 21  
ORDER Replicor, within 3 business days of the judgment to intervene herein, to  
issue to Plaintiffs an aggregate of 1,960,000 Class 'A' common shares in Replicor  
(which is comprised of the shares referred to below):  
a. 760,000 shares in Replicor - which represents the difference between:  
(i) 1,520,000 shares, which is the number of shares in Replicor at a price  
of $2.50/per share based on an investment of $3,800,000; and  
(ii) 760,000 shares, which is the number of shares in Replicor that the  
Plaintiffs purchased in December 2014 at a price of $5.00/share; and  
b. 1,200,000 shares in Replicor - which represents the difference between:  
(i) 1,600,000 shares, which is the number of shares in Replicor at a price  
of $2.50/share based on an investment of $4,000,000; and  
(ii) 400,000 shares, which is the number of shares that the Plaintiffs  
purchased in March 2015 at a price of $10.00/share;  
ORDER Replicor, through its directors, to rectify Replicor's securities register to  
reflect the foregoing issuance of shares;  
ORDER Replicor, within 5 business days of the judgment to intervene herein, to  
take all necessary steps to reacquire all of the intellectual property referred to in  
the Subscription Agreements that was previously transferred, conveyed, and/or  
sold to Replicor Ltd.;54  
[99] Plaintiffs’ oppression claim is based on Section 241 CBCA which notably provides:  
Application to court re oppression  
241 (1) A complainant may apply to a court for an order under this section.  
(2) If, on an application under subsection (1), the court is satisfied that in respect  
of a corporation or any of its affiliates  
(a) any act or omission of the corporation or any of its affiliates effects a  
54 With respect to the latter conclusion, no evidence was adduced in respect thereof at trial and it did not  
form part of Plaintiffsarguments and demands at the end of the trial.  
PAGE: 22  
(b) the business or affairs of the corporation or any of its affiliates are or  
have been carried on or conducted in a manner, or  
(c) the powers of the directors of the corporation or any of its affiliates are  
or have been exercised in a manner  
that is oppressive or unfairly prejudicial to or that unfairly disregards the interests  
of any security holder, creditor, director or officer, the court may make an order to  
rectify the matters complained of.  
[100] As former registered holders of security issued by Replicor, Plaintiffs are  
complainants” within the definition of Section 238 CBCA.  
The applicable legal principles and elements of an oppression remedy  
[101] The Supreme Court of Canada has interpreted the principal characteristics of the  
oppression remedy. First, it is an equitable remedy which looks at business realities and  
not merely narrow legalities. Second, it is in an inherently fact-specific exercise:  
[58] First, oppression is an equitable remedy. It seeks to ensure fairnesswhat is  
“just and equitable”. It gives a court broad, equitable jurisdiction to enforce not just  
what is legal but what is fair. It follows that courts considering claims for oppression  
should look at business realities, not merely narrow legalities.  
[59] Second, like many equitable remedies, oppression is fact-specific. What is just  
and equitable is judged by the reasonable expectations of the stakeholders in the  
context and in regard to the relationships at play. Conduct that may be oppressive  
in one situation may not be in another.55  
[References omitted]  
[102] To be entitled to relief under the oppression remedy, the complainant must satisfy  
the two-step test set out by the Supreme Court of Canada in BCE, namely:  
1) That the complainant held a reasonable expectation; and  
2) This reasonable expectation was violated by conduct falling within the terms  
“oppression”, “unfair prejudice” or “unfair disregard” of the complainant’s interests  
as shareholder.56  
55 BCE v. 1976 Debentureholders, 2008 SCC 69.  
56 BCE v. 1976 Debentureholders, 2008 SCC 69, par. 68.  
[68] In summary, the foregoing discussion suggests conducting two related inquiries in a claim for  
oppression: (1) Does the evidence support the reasonable expectation asserted by the claimant? and (2)  
Does the evidence establish that the reasonable expectation was violated by conduct falling within the  
terms “oppression”, “unfair prejudice” or “unfair disregard” of a relevant interest?  
PAGE: 23  
[103] The burden of satisfying this test belongs to the party claiming oppression57:  
[165] The Court of Appeal’s contrary conclusion rested, as suggested above, on  
an approach that incorporated the s. 241 oppression remedy with its emphasis on  
reasonable expectations into the s. 192 arrangement approval process. Having  
found that the debentureholders’ reasonable expectations (that their interests  
would be considered by the Board) were not met, the court went on to combine  
that finding with the s. 192 onus on the corporation. The result was to combine the  
substance of the oppression action with the onus of the s. 192 approval process.  
From this hybrid flowed the conclusion that the corporation had failed to discharge  
its burden of showing that it could not have met the alleged reasonable  
expectations of the debentureholders. This result could not have obtained  
under s. 241, which places the burden of establishing oppression on the  
claimant. By combining s. 241’s substance with the reversed onus of s. 192, the  
Court of Appeal arrived at a conclusion that could not have been sustained under  
either provision, read on its own terms.58  
[Emphasis added]  
[104] The reasonable expectations as opposed to the actual expectations of a  
complainant” are the “cornerstone” of an oppression claim.  
[105] These expectations must be reasonably based on the “facts of the specific case,  
the relationships at issue, and the entire context, including the fact that there may be  
conflicting claims and expectations:  
[62] As denoted by “reasonable”, the concept of reasonable expectations is  
objective and contextual. The actual expectation of a particular stakeholder is not  
conclusive. In the context of whether it would be “just and equitable” to grant a  
remedy, the question is whether the expectation is reasonable having regard to  
the facts of the specific case, the relationships at issue, and the entire context,  
including the fact that there may be conflicting claims and expectations.  
[63] Particular circumstances give rise to particular expectations. Stakeholders  
enter into relationships, with and within corporations, on the basis of  
understandings and expectations, upon which they are entitled to rely, provided  
they are reasonable in the context: These expectations are what the remedy of  
oppression seeks to uphold.  
[64] Determining whether a particular expectation is reasonable is complicated by  
the fact that the interests and expectations of different stakeholders may  
conflict. The oppression remedy recognizes that a corporation is an entity that  
57 See also Stahlke v. Stanfield, 2010 BCSC 142, para. 20 (confirmed by Stahlke v. Stanfield, 2010  
BCCA 603);  
[20] The complainant bears the burden of proof to establish that such reasonable expectations were  
thwarted by the respondents. The respondents do not have a burden to prove that they did not act  
oppressively. [Emphasis added, references omitted]  
58 BCE v. 1976 Debentureholders, 2008 SCC 69.  
PAGE: 24  
encompasses and affects various individuals and groups, some of whose interests  
may conflict with others. Directors or other corporate actors may make corporate  
decisions or seek to resolve conflicts in a way that abusively or unfairly maximizes  
a particular group’s interest at the expense of other stakeholders. The corporation  
and shareholders are entitled to maximize profit and share value, to be sure, but  
not by treating individual stakeholders unfairly. Fair treatment the central theme  
running through the oppression jurisprudence is most fundamentally what  
stakeholders are entitled to “reasonably expect”.59  
[Emphasis added, references omitted]  
[106] When determining whether there exists a reasonable expectation, the Court must  
consider factors such as  
- (1) general commercial practice;  
- (2) the nature of the corporation;  
- (3) the relationship between the parties;  
- (4) past practice;  
- (5) steps the claimant could have taken to protect itself;  
- (6) representations and agreements; and  
- (7) a fair resolution of conflicting interests between corporate stakeholders.60  
[107] Lastly, whether an expectation is reasonable is to be assessed at the time at which  
the shareholder acquired the shares.61  
[108] Once a complainantsuccessfully establishes a reasonable expectation, the  
Court’s inquiry shifts to whether failure to meet the expectation constitutes:  
Oppression”, meaning conduct that is coercive and abusive, and suggests bad  
Unfair prejudice”, meaning conduct which envisions a less culpable state of mind  
that nevertheless results in unfair consequences; or  
59 BCE v. 1976 Debentureholders, 2008 SCC 69.  
60 BCE v. 1976 Debentureholders, 2008 SCC 69, para. 72.  
61 Paul MARTEL, La société par actions au Québec, vol. 1, « Les aspects juridiques », Montréal, Wilson &  
Lafleur, 2021, para. 31-200; see also, Raging River Capital LP v. Tasesko Mines Limited, 2016  
BCSC 2302, para. 48.  
PAGE: 25  
Unfair disregard of interests”, meaning conduct which ignores an interest or  
deems it to be of no importance.62  
[109] In the present case, it is particularly important to bear in mind that whether  
oppression exists must also be determined in accordance with business realities. As  
such, it is well established that the Courts should give appropriate deference to the  
business judgment of directors, so long as it lies within a range of reasonable decisions:  
[40] In considering what is in the best interests of the corporation, directors may  
look to the interests of, inter alia, shareholders, employees, creditors, consumers,  
governments and the environment to inform their decisions. Courts should give  
appropriate deference to the business judgment of directors who take into account  
these ancillary interests, as reflected by the business judgment rule. The  
“business judgment rule” accords deference to a business decision, so long as it  
lies within a range of reasonable alternatives. It reflects the reality that directors,  
who are mandated under s. 102(1) of the CBCA to manage the corporation’s  
business and affairs, are often better suited to determine what is in the best  
interests of the corporation. This applies to decisions on stakeholders’ interests,  
as much as other directorial decisions.63  
[110] In other words, the Court must show deference to the business decisions made by  
the directors of a corporation in the context of an oppression remedy case.  
[111] In such matters, it is not the role of the Court to substitute its own business  
judgment to the directors’ judgment:  
There can be no doubt that on an application under s. 234 the trial judge is required  
to consider the nature of the impugned acts and the method in which they were  
carried out. That does not mean that the trial judge should substitute his own  
business judgment for that of managers, directors, or a committee such as the one  
involved in assessing this transaction. Indeed, it would generally be impossible for  
him to do so, regardless of the amount of evidence before him. He is dealing with  
the matter at a different time and place; it is unlikely that he will have the  
background knowledge and expertise of the individuals involved; he could have  
little or no knowledge of the background and skills of the persons who would be  
carrying out any proposed plan; and it is unlikely that he would have any knowledge  
of the specialized market in which the corporation operated. In short, he does not  
know enough to make the business decision required. That does not mean that he  
is not well equipped to make an objective assessment of the very factors which s.  
234 requires him to assess. Those factors have been discussed in some detail  
earlier in these reasons.64  
[Emphasis added]  
62 BCE v. 1976 Debentureholders, 2008 SCC 69, para. 67.  
63 BCE v. 1976 Debentureholders, 2008 SCC 69.  
64 Brant Investments Ltd. v. Keeprite Inc., 1991 2705 (ON CA), pages 44-45.  
PAGE: 26  
[112] The Court emphatically agrees with the following comments of Justice Louis J.  
Gouin in Desaulniers v. EXP Global inc.65:  
[101] Par contre, peut-on ainsi analyser, et remettre en question, les décisions du  
«Board of Directors», lui qui connaît tous les tenants et les aboutissants des  
[102] Peut-on, après coup, alors que toute l’histoire est connue, réécrire cette  
histoire afin de mieux servir, protéger les intérêts de certaines personnes  
[103] Le Tribunal est d’avis qu’il ne peut pas en être ainsi, surtout lorsque la  
décision analysée fait partie de l’éventail de solutions raisonnables possibles,  
cadre des limites à l’appréciation commerciale effectuée par le Tribunal («business  
judgment rule»).  
[Emphasis added]  
[113] In CW Shareholdings Inc. v. WIC Western International Communications Ltd.66:  
The directors' actions are not to be judged against the perfect vision of hindsight,  
and should be measured against the facts as they existed at the time the impugned  
decision was made. In addition, the court should be reluctant to substitute its own  
opinion for that of the directors where the business decision was made in  
reasonable and informed reliance on the advice of financial and legal advisors  
appropriately retained and consulted in the circumstances.  
[114] In the matter of Labene v. Dumais67, Madam Justice Marie-Anne Paquette  
summarized very well the applicable principles and elements of an oppression remedy:  
[31] Pour obtenir un redressement en oppression, le plaignant doit démontrer trois  
éléments, et ce, de façon prépondérante :  
1- Qu’il a le statut de « Plaignant », au sens de l’article 450 LQSA.  
2- Que la décision ou le geste contesté va à l’encontre de ses attentes  
raisonnables :  
Les attentes réelles d’une partie intéressée ne sont pas  
Il s’agit plutôt de déterminer si les attentes qui auraient été  
frustrées sont raisonnables compte tenu des faits propres à  
65 2018 QCCS 25.  
66 1998 14838 (ON SC), page 27.  
67 2014 QCCS 6377 (Application to dismiss the appeal granted and appeal dismissed in Labene v. Dumais,  
2015 QCCA 394).  
PAGE: 27  
l’espèce, des rapports en cause et de l’ensemble du contexte, y  
compris la possibilité d’attentes et de demandes opposées.  
Le concept d’attentes raisonnables est donc objectif et  
3- Que la décision ou le geste contesté est oppressif, c’est-à-dire qu’il  
constitue un abus, un préjudice injuste ou une omission injuste de tenir  
compte de ses intérêts :  
L’« abus » désigne un comportement coercitif et excessif. Il  
évoque la mauvaise foi.  
Le « préjudice injuste » peut impliquer un état d’esprit moins  
coupable, mais dont les conséquences sont néanmoins injustes.  
L’« omission injuste de tenir compte » vise les cas où un intérêt  
n’est pas pris en compte parce qu’il est perçu comme sans  
Cette analyse doit se faire en ayant à l’esprit les principes  
suivants :  
• Un geste n’est pas abusif dans l’absolu. Un même geste  
peut constituer ou non un abus selon le contexte et les  
rapports en jeu.  
Les tribunaux ne s’ingèrent pas dans les affaires  
d’une compagnie. Ils ne doivent pas usurper les  
pouvoirs du conseil d’administration en regard de  
décisions d’affaires prises de bonne foi et qui, au  
moment où elles ont été prises, faisaient partie de  
l’éventail des solutions raisonnables possibles.  
Le recours en oppression ne sera pas accueilli  
lorsqu’une décision est raisonnable, a été prise dans le  
meilleur intérêt de la compagnie et des actionnaires en  
général, et non de manière à préjudicier le plaignant en  
particulier, (Règle de l’appréciation commerciale  
- Business judgment rule)  
Le plaignant doit démontrer un préjudice personnel,  
distinct de celui de la compagnie. Le plaignant qui fait valoir  
un préjudice à la compagnie ou un préjudice personnel  
collatéral à celui que subit la compagnie ne peut intenter un  
recours personnel en oppression. Dans tels cas, il doit  
plutôt procéder par voie d’action dérivée, intentée au nom  
de la compagnie.  
PAGE: 28  
[Emphasis added]  
The application of the legal principles to the case at hand  
[115] For the following reasons, Plaintiffs’ alleged expectations were not reasonable  
within the purview of oppression remedy legal proceedings and the conduct of  
Defendants was not oppressive or unfairly prejudicial to Plaintiffs.  
3.2.1 Plaintiffs’ alleged expectations were not reasonable  
[116] The Court is in agreement with the position voiced by Defendantscounsel that  
Plaintiffs failed to establish neither a reasonable expectation nor an oppressive conduct.  
[117] The Court has already mentioned that at the core of Plaintiffs’ oppression claim is  
their purported expectation that Venrock, an existing shareholder in Replicor, would invest  
additional sums soon after Plaintiffs’ Second and Third Investments.  
[118] With respect to the $5/share Second Investment that was made in December  
2014, it was allegedly based on R. Jennings’s representations made to M. McCarthy that  
Venrock “was considering making a significant investment in Replicor”.68  
[119] The same applies to the $10/share Third Investment. When Plaintiffs decided, in  
March 2015, to make their Third Investment, they alleged that their decision was similarly  
made based on R. Jennings’s representations of an imminent investment from Venrock,  
but this time at a price of at least $10/share.69  
[120] Based on the foregoing, the Court can only surmise that Plaintiffs’ Second and  
Third Investments in Replicor, at the respective price of $5.00 and $10.00 per share, were  
predicated upon their alleged reasonable expectation that the Prospective Additional  
Venrock Investment (PAVI) would be effectively concluded during the summer of 2015.  
[121] According to Defendants’ counsel, Plaintiffs’ alleged expectation was not  
reasonable for the following reasons:  
i) Plaintiffs expressly accepted and acknowledged the risks of their investment in  
the Subscription Agreements that they executed to acquire shares of Replicor;70  
ii) Plaintiffs were fully aware that the PAVI was not guaranteed;  
68 Amended Originating Application, para. 28.  
69 Amended Originating Application, para. 37.  
70 P-6 and P-9.  
PAGE: 29  
iii) The Initial and Amended Term Sheets were non-binding and as such could not  
form the basis of a reasonable expectation that a transaction would in fact be  
iv) When purchasing shares in Replicor, Plaintiffs accepted the inherent risks of  
investing in a biotech startup company;  
v) The price of Replicor shares was not based on the PAVI; and  
vi) Plaintiffs failed to exercise any due diligence on Replicor prior to investing.  
[122] The Court shares that view. Plaintiffs expressly accepted and acknowledged the risks of  
their investment in the Subscription Agreements  
[123] During his testimony, M. McCarthy acknowledged that he did not read the  
Subscription Agreements before signing the same on behalf of Plaintiffs.  
[124] Moreover, M. McCarthy, an experienced investor and businessman, admitted that  
he did not attempt to negotiate or modify the Subscription Agreements in a manner by  
which the Second and Third Investments would be conditional upon the successful  
completion of the PAVI.  
[125] Failure or omission to read a contract before signing the same does not relieve the  
signatory from the terms and conditions set out therein.  
[126] Indeed, in the Subscription Agreements72, Plaintiffs expressly accepted the risks  
of their investments as well as the restrictions on selling shares in a private company like  
Representations, Warranties and Covenants of the Purchaser.  
The Purchaser represents, warrants and covenants to the Issuer (and  
acknowledges that the Issuer and their respective counsel are relying thereon)  
(a) The Purchaser is solely responsible for obtaining such professional advice as  
they consider appropriate in connection with their subscription hereunder, have  
been independently advised as to or are aware of the restrictions with respect to  
trading in the Purchased Securities, no representation has been made regarding  
the restrictions with respect to trading in the aforementioned securities; it  
acknowledges that it is aware of the characteristics of the Purchased Securities,  
the risks relating to an investment therein and of the fact that it may not be able to  
71 P-8 and P-11.  
72 P-6 and P-9.  
PAGE: 30  
resell the Purchased Securities except in accordance with limited exemptions  
under applicable securities legislation and regulatory policy; and it and any  
beneficial purchaser for whom it is acting each covenants and agrees that it will  
not resell the Purchased Securities except in accordance with the provisions of  
applicable securities legislation and will consult with its own legal advisor with  
respect to such compliance;  
(c) The Purchaser has such knowledge and experience in financial and business  
matters as to be capable of evaluating the merits and risks of its investment in the  
Purchased Securities and is able to bear the economic risks of such investment;  
(e) The Purchaser agrees that the Issuer and its legal counsel assume no  
responsibility or liability of any nature whatsoever for the accuracy, adequacy or  
completeness of publicly available information upon which the Purchaser's  
investment decision has been made or as to whether all information concerning  
the Issuer required to be disclosed by the Issuer has been disclosed;  
[Emphasis added]  
[127] In the case of AbitibiBowater inc.73, Justice Clément Gascon pointed out that a  
claimant cannot assert a reasonable expectation for a right that it chose not to include in  
an agreement:  
[156] […] As well, it emphasized that a party could not argue that it reasonably  
expected to have rights it had not negotiated in a commercial agreement.  
[128] With all due respect, how could M. McCarthy claim to have had a reasonable  
expectation of a guaranteed concluded PAVI upon making the Second and Third  
Investments when he expressly assumed on behalf of Plaintiffs the risks to the contrary  
upon executing the Subscription Agreements? Plaintiffs were fully aware that the PAVI was not guaranteed  
[129] M. McCarthy acknowledged that there was no guarantee that Venrock would  
further invest in Replicor following the execution of the Initial and the Amended Term  
73 AbitibiBowater inc. (Arrangement relatif à), 2010 QCCS 6365, para. 155 157; see also, BCE v. 1976  
Debentureholders, 2008 SCC 69, para. 25 and 163.  
74 Pre-trial examination of M. McCarthy March 15, 2019, page 56.  
PAGE: 31  
[130] At trial, M. McCarthy admitted that, at the time that the Second and the Third  
Investments were made, R. Jennings never told him that the PAVI had closed or was  
guaranteed to close.  
[131] The Court bears in mind that the Second investment was made shortly after  
M. McCarthy had received the Shareholder Update of December 8, 201475. Yet, this  
document that mentioned recent fund-raising at $5/share which, on M. McCarthy’s own  
admission, had strongly incited him to proceed with the Second Investment, made no  
mention of Venrock.  
[132] Again, how could M. McCarthy claim that Plaintiffs had a reasonable expectation  
based on a document that made no mention of said expectation or his expected outcome?  
[133] Instead, M. McCarthy mentioned that the content of the December 8, 2014,  
Shareholder Update confirmed, to all intents and purposes, R. Jennings’s verbal  
representations regarding the PAVI even though the document did not expressly say so.  
[134] Also bearing in mind that reasonable expectations must be assessed at the time  
the shares were purchased, M. McCarthy could not rely on documents that he could only  
have consulted well after the Second and Third Investments were made76. Consequently,  
said documents and their underlying facts cannot be invoked by Plaintiffs to assert the  
existence of a reasonable expectation with respect to the PAVI.  
[135] In light of the above, Plaintiffs have failed to establish that they had a reasonable  
expectation that the PAVI would in fact close based on the representations they received  
from R. Jennings.  
A non-binding term sheet cannot form the basis of a  
reasonable expectation that a transaction would in fact be  
[136] Executing a term sheet does not necessarily seal a deal. Its wording will indicate  
if its terms and conditions are binding or non-binding and the next steps to be taken to  
conclude the transaction contemplated therein.  
[137] Both, the Initial Term Sheet and the Amended Term Sheet explicitly provided the  
following under the heading, Conditions Precedent:  
75 P-5.  
M. McCarthy admitted that he was only made aware of certain documents that he invoked in his own  
proceedings and their underlying facts after Plaintiffs commenced the Oppression Remedy proceedings  
against Replicor and the Management Directors in Ontario that was dismissed for lack of proper jurisdiction.  
The documents obtained after the fact are P-7, P-8, P-11, P-12, P-13, P-14, P-16, P-17, P-19 and P-37.  
PAGE: 32  
Except for the provisions contained herein entitled “No Shop Agreement” and  
“Confidentiality,” which are explicitly agreed by the Investor and the Company to  
be binding upon execution of this term sheet, this summary of terms is not intended  
to be a legally binding commitment, and any obligation on the part of either party  
is subject to the following conditions precedent:  
1. Completion of legal documentation satisfactory to the Company and the  
prospective Investors, including with limitation, the Side Letter.  
2. Satisfactory completion of due diligence by the perspective Investors.  
3. Successful completion of an investment presentation to Venrock.  
[Emphasis added]  
[138] The two Term Sheets also provided for:  
- A comprehensive corporate due diligence of Replicor by Venrock; and  
- The negotiation and execution of a slew of lengthy agreements, such as a voting  
rights agreement, a right of first refusal agreement and co-sale agreement, and an  
investors’ rights agreement77 [the Shareholders Agreements].  
[139] Furthermore, assuming the due diligence was completed to Venrock’s satisfaction,  
and the parties were able to successfully execute the required legal documentation,  
namely the Shareholders Agreements, the PAVI still required approval from 70% of  
Replicor’s shareholders.  
[140] With all due respect, it simply defies all logic that an experienced and sophisticated  
investor and businessman such as M. McCarthy would qualify the remaining steps set  
out in the two Term Sheets as mere “housekeeping.”  
[141] The Court shares the view of Defendantscounsel that it simply strains credulity  
for Plaintiffs to assert the existence of a reasonable expectation of an investment by  
Venrock on the basis that the latter and Replicor had signed the Initial Term Sheet and  
the Amended Term Sheet, documents which M. McCarthy had not even consulted prior  
to commencing the present Plaintiffs’ legal proceedings against Replicor and the  
Management Directors. When purchasing shares in Replicor, Plaintiffs accepted the  
inherent risks of investing in a biotech startup company  
[142] As previously mentioned, Replicor is a privately owned biotech company  
developing an experimental treatment of viral infections, namely for Hepatitis B and D.78  
77 P-32.  
78 D-1.  
PAGE: 33  
[143] The evidence revealed that Replicor had to conduct clinical trials to demonstrate  
the efficacy of its treatment (in 2014 and 2015 it was identified as REP 2139) on patients  
suffering from Hepatitis B and D viruses which affect approximately hundreds of millions  
of people around the world.  
[144] In 2014 and 2015, a series of clinical trials for the REP 2139 were conducted in  
Bangladesh and Moldova.  
[145] As these two clinical trials yielded positive results, they led Venrock (and QVT as  
well) to make its initial investment in Replicor in July 2014 in the amount of $5M at a price  
of $2.50/share.  
[146] While Replicor’s clinical trials in 2014 and 2015 were extremely promising, a  
biotech company developing an experimental treatment is nevertheless an inherently  
risky business venture.  
[147] This fact is of utmost importance in the present proceedings because, contrary to  
Plaintiffs’ allegations, the PAVI was not terminated due to the conduct of the Management  
Directors and due to the June 17th Decision.  
[148] While the negotiations between Replicor and Venrock were progressing fruitfully  
following the June 17th Decision, during the fall of 2015, Replicor received a letter from  
the FDA79 who was expressing concerns and reservations about Replicor’s  
Investigational New Drug (IND) Application filed earlier in the summer of 2015. The IND  
was needed to permit Replicor to initiate and carry out human clinical trials in the USA.  
[149] According to M. Bazinet, the FDA had misinterpreted several scientific elements  
of their IND Application.  
[150] That is when B. Koh decided to stop the PAVI in mid-November 2015. Before  
resuming the PAVI, B. Koh had to be satisfied that the FDA was wrong on all elements it  
raised concerning Replicor’s IND Application:  
However, as part of the due diligence, the investor [Venrock] reviewed a recently  
issued pre-IND letter from the FDA. The investor concluded that there was too  
much uncertainty as to the timing of an IND approval and that he was not willing  
to proceed with a mezzanine round at this time. It is my understanding that once  
the IND is approved that this investor will potentially reconsider doing an  
investment. As anyone who knows the FDA will realize, we cannot predict when  
an IND could be granted.80  
79 US Food and Drug Agency (“FDA”).  
80 Excerpt from the Shareholder Update of February 3, 2016 (D-3, page 13).  
PAGE: 34  
[151] Yet, it took Replicor three years to sort out the problems with the FDA who finally  
lifted all the objections thanks to the efforts of A. Vaillant, Replicor’s Chief Scientific  
[152] All concerns raised by the FDA were exclusively scientific considerations, not a  
single financial consideration guided its objections at the time.  
[153] In other words, B. Koh’s decision to suspend the PAVI in November 2015 had  
nothing to do with the June 17th Decision. At that time, the Board and the Management  
Directors were not expecting such a response from the FDA.  
[154] Under such circumstances, Plaintiffs like all other shareholders of Replicor had  
accepted the risks of investing in a company like Replicor and had to live with the reality  
that unexpected decisions from regulatory agencies may impact potential investments in  
the company.  
[155] Once again, Plaintiffs could not have had a reasonable expectation that the PAVI  
was necessarily going to be concluded. The price of Replicor shares was not based on the PAVI  
[156] In their Amended Originating Application81, Plaintiffs claimed that their decision to  
make the Second and Third Investment at respective prices of $5/share and $10/share  
was induced by their reasonable expectation that the PAVI would be concluded based on  
R. Jennings’s verbal representations made to M. McCarthy at the time.  
[157] Plaintiffs further alleged that, without the PAVI, the value of Replicor shares was  
not what had been represented by R. Jennings at the time of the Second and Third  
69. Given the foregoing, the value of Replicor is not what was represented to the  
Plaintiffs at the time that they purchased, in December 2014 and February 2015,  
shares in Replicor, at values, respectively, of $5.00/share and $10.00/share.  
70. As shareholders of Replicor, the Plaintiffs had reasonable expectations that  
the Management Directors would respect the representations that were made to  
McCarthy [by Jennings] that induced the Plaintiffs to purchase shares in Replicor  
at the aforementioned values.  
[158] M. Bazinet testified that the price of Replicor shares was based on a multitude of  
factors including the results of the clinical trials and the valuation of companies developing  
comparable treatments.  
81 Paragraphs 35 and 42.  
PAGE: 35  
[159] In fact, the positive clinical trial results in Moldova in particular had a positive  
influence on the price of the Replicor shares in 2014 and 2015. The $10/share price  
mentioned in the Initial Term Sheet was highly influenced by such promising clinical  
[160] Later, Venrock accepted to increase the share price from $10.00 to $15.00 in the  
Amended Term Sheet because of another series of promising results from the Moldova  
trials as well as the positive feedback Replicor received during a conference held by the  
prestigious European Association for the Study of the Liver.  
[161] What is even more relevant, is that these share prices were equally applicable to  
any other potential investor interested in purchasing Replicor shares at the time. Venrock  
was not offered a special deal or a side deal.  
[162] Around the same time that Plaintiffs made their Second Investment in December  
2014, two other subscription agreements were signed between October and December  
- On October 29, 2014, Triathlon Limited, a company controlled by R. Jennings,  
purchased 200,000 shares at a price of $5/share;82  
- On November 6, 2014, Peripatetic Investments Ltd. purchased 40,000 shares at  
a price of $5/share.83  
[163] The Court understands that those subscriptions were made in the fall of 2014, prior  
to the initial discussions between Replicor and Venrock that led to the PAVI which began  
at the end of November 2014.  
[164] During his testimony, M. Bazinet insisted that, at any given time, all share  
subscriptions were always made at the same price. In other words, nobody got a special  
treatment or a special subscription price.  
[165] M. Bazinet also confirmed that the shares were currently being sold at $13/share  
since 2018.  
[166] M. Bazinet’s statements were uncontradicted.  
[167] With all due respect, the preponderant evidence does not support the contention  
that Plaintiffs were, to all intents and purposes, singled out and induced based on  
misleading promises to acquire shares of Replicor at the “unrealisticand “inflated” prices  
of $5 and $10 based on the false representations that Venrock, an institutional investor,  
was to invest millions of dollars in Replicor for certain.  
82 D-9.  
83 D-10.  
PAGE: 36  
[168] When they made their Second and Third Investments, Plaintiffs could not  
realistically have a reasonable expectation that the prices they agreed to pay at the time  
were predicated on Venrock closing its investment deal (PAVI) with Replicor. Plaintiffs failed to conduct any due diligence  
[169] Another important element considered by the Court is that by M. McCarthy’s own  
admission, Plaintiffs failed to conduct any due diligence whatsoever on Replicor before  
making any of their three investments.  
[170] Plaintiffs through their sole director M. McCarthy, an experienced investor and  
businessman, did not take any reasonable steps to eventually protect themselves against  
the prejudice they now claim to have suffered.  
[171] M. McCarthy’s failure to carry out any diligence of Replicor is even more  
astonishing considering that he had never directly invested in pharmaceutical, biotech or  
other healthcare-related companies except what may have been included in his mutual  
[172] M. McCarthy was introduced to Replicor via R. Jennings commencing in May  
2011. Between May 2011, and June 2014, he received updates from R. Jennings about  
Replicor, specifically concerning the promising nature of the treatments it was  
[173] The first investment was made by M. McCarthy via RJM in July 2014.  
[174] Interestingly enough, when RJM acquired its first 50,000 Replicor shares at  
$2.50/share from D. Jennings, M. McCarthy did not:  
- Inquire on the price that D. Jennings had paid for the same shares;86  
- Speak to the CEO Michel Bazinet;87  
- Conduct any due diligence whatsoever on Replicor, REP 2139 or on the valuations  
behind the price of D. Jennings’s shares.88  
[175] M. McCarthy adopted the same pattern for the Second and Third Investments.  
[176] Moreover, M. McCarthy did not even take the time to read the Subscription  
Agreements89 when he decided to make the Second and Third Investments.  
84 Pre-trial examination of M. McCarthy of March 15, 2018, page 13.  
85 D-7 and Pre-trial examination of M. McCarthy of March 15, 2018, pages 35-36.  
86 Pre-trial examination of M. McCarthy of March 15, 2018, pages 39-40.  
87 Pre-trial examination of M. McCarthy of March 15, 2018, page 40.  
88 Pre-trial examination of M. McCarthy of March 15, 2018, pages 39-40.  
89 P-6 and P-9; Pre-trial examination of M. McCarthy of March 15, 2018, page 91.  
PAGE: 37  
[177] With all due respect, this is not the behaviour of a responsible investor.  
[178] How could M. McCarthy (Plaintiffs) have a reasonable expectation that the PAVI  
was essentially a “done deal” to all intents and purposes when, as an experienced  
investor and businessman, he failed to conduct any due diligence90 on Replicor, its  
business model or on Venrock.  
3.2.2 Defendants did not engage in oppressive conduct  
[179] Despite having already concluded that Plaintiffs did not have reasonable  
expectations that their Second and Third Investments were linked to Venrock completing  
the PAVI, the Court shall nevertheless address the alleged oppressive conduct of  
Defendants towards Plaintiffs.  
[180] All in all, the Court does not find that the Management Directors’ conduct herein  
constituted oppression, unfair prejudice or unfair disregard within the meaning of  
Section 241 CBCA. The Management Directors discharged their duties faithfully  
and exercised reasonable business judgment  
[181] As previously mentioned, the June 17th Board Meeting and the decision to  
terminate the Amended Term Sheet adopted by the three Management Directors with the  
strong dissidence of the Jennings Brothers are at the core of M. McCarthy’s denounced  
oppressive conducts.  
[182] In order to determine whether the June 17th Decision constitutes an act of  
oppression, the Court must examine the circumstances that led to that decision.  
[183] In furtherance of the PAVI, on May 20, 2015, Venrock provided Replicor with the  
Amended Term Sheet providing for an investment of $17.5M at a price of $15/share. The  
closing of the PAVI required the execution of the Shareholders Agreements comprised of  
a Voting Rights Agreement, a Right of First Refusal and Co-Sale Agreement, and an  
Investors’ Rights Agreement.91  
[184] In early June 2015, after a review of the latest version of the Draft Agreements, M.  
Bazinet began to have serious concerns with certain of the terms and conditions  
contained in the Draft Agreements that were being circulated.  
[185] Of particular concern for M. Bazinet was the fact that the Amended Term Sheet  
and the Voting Rights Agreement:  
90 126217 Canada inc. v. Cytrynbaum, 2018 QCCS 2616, para. 111-114, 128 and 129.  
91 P-11.  
PAGE: 38  
- required that at least 70% of shareholders accept in advance decisions pertaining  
to an Initial Public Offering (“IPO”), a merger, a sale of voting control or a sale of  
substantially all of the assets of Replicor;  
- did not include a minimum share price guarantee, meaning a clear stipulation that  
an IPO would be closed at a price that is equal or superior to the share price set  
forth in the Amended Term Sheet ($15/share).  
[186] A. Vaillant testified that, on June 11, 2015, M. Bazinet spoke to him while he was  
attending a conference in Israel, in order to share his concerns about the Draft  
Agreements that they were expected to sign soon after. A. Vaillant echoed M. Bazinet’s  
concerns insisting that all existing shareholders needed to be sufficiently protected in  
connection with the PAVI, which did not seem to be the case with the Draft Agreements.  
[187] M. Bazinet also conveyed to A. Vaillant that the Jennings Brothers were exerting  
enormous pressure on them to quickly close the deal with Venrock regardless of the  
existing concerns. They were entirely satisfied with the Draft Agreements as they were  
[188] By June 11, 2015, M. Bazinet was told that the transaction had to be concluded  
with the execution of the Draft Agreements by the end of the following week (June 19,  
[189] On June 12, 2015, M. Bazinet responded to R. Jennings that more time was  
required in order to make an informed decision, especially since most shareholders would  
be relying upon him as CEO to decide whether or not they would vote to approve the  
PAVI. M. Bazinet further stated that:  
[…] Except for those investors you introduced and can directly influence, every  
other investor will rely on my recommendation to agree to sign or not. I cannot take  
this responsibility lightly. I have always and will always put the well being of my  
shareholders first”.92  
[Emphasis added]  
[190] On the same day, R. Jennings responded that no further negotiations with Venrock  
on the terms and conditions of its investment were possible and that in any event, most  
of the contractual documents (the Draft Agreements) were simply “boilerplate”.93  
[191] D. Jennings reinforced his brother’s position that “there is no further negotiation so  
any desired changes would not be adopted by Venrock counsel”.94  
92 P-37, page 3.  
93 P-37, page 2.  
94 P-37, page 1.  
PAGE: 39  
[192] Given that the Jennings Brothers were conducting all negotiations with the  
Venrock’s representatives to the exclusion of the three Management Directors, M. Bazinet  
in particular was not in a position to verify if their assertions that no further discussions or  
negotiations were possible and that basically, the Draft Agreements in their latest version  
had to be signed by June 19, 2015, without any further modifications.  
[193] M. Bazinet took their position as reflecting the true state of affairs with respect to  
Venrock. However, it also fuelled M. Bazinet’s doubts and suspicions about the Jennings  
Brothers’ real agenda.  
[194] It prompted M. Bazinet to consult the law firm of Séguin Racine that was already  
advising Replicor from time to time. On behalf of Replicor, M. Bazinet wanted their  
professional advice on the Draft Agreements that he was called to execute shortly.  
[195] The Court understands from M. Bazinet’s testimony that the lawyers confirmed his  
concerns that the Draft Agreements in their then version were not in the best interest of  
Replicor and of its shareholders. It has never been established whether the lawyers’  
advice was made in writing or not.  
[196] Be that as it may, that is when M. Bazinet with the consent of L. Bazinet and  
A. Vaillant decided to call for a Special Board Meeting to take place on June 17, 2015, in  
order to essentially terminate the Amended Term Sheet since the Draft Agreements that  
could not be modified should not be signed in their then-current form by June 19th.  
[197] More importantly, the termination of the Amended Term Sheet was even more  
indicated in the minds of the Management Directors as they had been falsely led to  
believe by the Jennings Brothers that no further negotiations were possible with Venrock  
who would refuse any further modifications to the Draft Agreements.  
[198] The minutes of the June 17th Board Meeting95 and the additional notes of Robert  
and David Jennings added to those minutes96 evidence the chasm between the genuine  
concerns of the three Management Directors and the position of the Jennings Brothers  
that the Draft Agreements were in somewhat perfect form with extremely favourable terms  
and conditions to Replicor and its shareholders. They reiterated that no further  
negotiations were possible with Venrock whose legal advisors would not grant any further  
concessions. That was it! Take it or leave it!  
[199] Sadly, the position voiced repeatedly by the Jennings Brothers since June 11,  
2015, to M. Bazinet and to the other Management Directors that the Draft Agreements  
were no longer negotiable and that they had to be signed as is by the end of the following  
week, could not be further from the reality, if not the truth.  
95 P-17.  
96 P-19.  
PAGE: 40  
[200] As previously discussed, in the hours following the June 17th Board Meeting, M.  
Bazinet discovered from B. Koh that Venrock was not averse to pursue discussions with  
Replicor to satisfy their concerns, on the contrary.  
[201] In fact, B. Koh was ready to and did negotiate the New Term Sheet until Venrock’s  
decision in November 2015 to suspend all negotiations due to the concerns raised by the  
FDA, a situation totally unrelated to the June 17th Decision.  
[202] The Court finds that none of the three Management Directors came to and made  
the June 17th Decision based on strictly selfish preoccupations or interest, on the contrary.  
[203] If anyone is to carry the blame for the unfortunate turn of events that took place at  
the June 17th Board Meeting, it can only be the Jennings Brothers who, through their  
determination to plow ahead regardless of their three colleagues’ genuine and legitimate  
concerns, mislead them in thinking that Venrock was essentially forcing them to sign the  
Draft Agreements in their latest version without any possibility of pursuing any  
negotiations whatsoever, which could not have been further from the truth.  
[204] It is not surprising that M. Bazinet’s subsequent discovery following his discussions  
with B. Koh caused the three Management Directors to seriously mistrust henceforth the  
Jennings Brothers and to conclude that the Board as it existed then could no longer  
remain the same.  
[205] Echoing the same feeling, R. Jennings tried to break the impasse among the  
Board members by unsuccessfully instituting the Jennings Lawsuit in January 2016  
against M. Bazinet, L. Bazinet and A. Vaillant to essentially remove them from the Board  
of Directors and appoint a controlling director of his choosing. R. Jennings discontinued  
his legal proceedings in 2017.  
[206] In the meantime, in 2016, the Jennings Brothers also unsuccessfully orchestrated  
an attempt to gain control of the Board with a slate of proposed directors. M. Bazinet’s  
proposed slate nevertheless prevailed despite the efforts deployed by R. Jennings.97  
[207] All in all, the June 17th Decision was not made lightly by the Management Directors.  
[208] Since he had serious concerns, M. Bazinet as CEO was right to consult lawyers  
given the highly technical nature of the Draft Agreements.  
[209] This was especially true given that none of the three Management Directors were  
in the loop” with respect to the negotiations carried out at the time on behalf of Replicor  
with Venrock.  
[210] The prevailing climate of suspicion at the time was heightened by recent unrelated  
events. For example, shortly before, D. Jennings refused to inform A. Vaillant of the tenor  
97 P-23 and P-24.  
PAGE: 41  
of his recent discussions with shareholder QVT, the institutional investor brought on board  
by Venrock in 2014.  
[211] At trial, Plaintiffs’ counsel insisted on obtaining the legal opinion sought by Bazinet  
that prompted the June 17th Board Meeting.  
[212] The Court maintained Replicor’s objection to produce any such legal opinion since  
Replicor had not waived the professional secrecy privilege. Moreover, the Court  
maintained the objection on the basis that, in any event, the content of said opinion was  
irrelevant given the evidence already adduced.  
[213] Plaintiffs sought leave to appeal said decision.  
[214] However, Plaintiffs had previously endeavoured to obtain said legal opinion on  
November 11, 2019, when Madam Justice Chantal Corriveau maintained Plaintiffs’  
objection to disclose the same. On January 20, 2020, Madam Justice Lucie Fournier of  
the Court of Appeal denied Plaintiffs’ Application for leave to appeal.98  
[215] On June 16, 2022, upon denying Plaintiffs’ Application for leave to appeal99,  
Justice Benoit Moore made the following comment:  
[9] J’ajoute qu’il s’agit ici d’un jugement rendu en cours d’instruction en matière  
d’administration de la preuve, sujet pour lequel le juge jouit en principe d’une  
grande discrétion100. En l’espèce, celle-ci est d’autant plus importante que le juge,  
au-delà de sa conclusion selon laquelle les intimés n’ont pas renoncé au secret  
professionnel, conclut que la preuve n’est pas pertinente pour les fins du dossier.  
Force est d’admettre qu’il jouit sur ce point d’un avantage très net101.  
[216] With the benefit of the evidence adduced at trial, the Court finds that Replicor did  
not waive the professional secrecy privilege linked to any such legal opinion whether it  
was made in writing or not.  
[217] Moreover, the Court reiterates that the content of such legal opinion is irrelevant  
for the purposes hereof.  
[218] The circumstances which brought M. Bazinet to consult the lawyers at Séguin  
Racine have been amply disclosed at trial. It had to do with the Draft Agreements, which  
from the Jennings Brothers’ standpoint, were not only already extremely favourable to  
Replicor and to its shareholders but also they could not be subject to further negotiations  
and modifications.  
98 2020 QCCA 74.  
99 2022-QCCA 862.  
Lagacé c. Gestion Michel Lagacé inc., 2020 QCCA 1768 (Rancourt, j.c.a.).  
Jasmin (Succession de) c. Montreuil, 2010 QCCA 1928 (Bich, j.c.a.).  
PAGE: 42  
[219] M. Bazinet had serious concerns whether the existing shareholders were  
sufficiently protected with those Draft Agreements.  
[220] As a serious and conscientious CEO and Director, M. Bazinet realizing that he did  
not have the necessary experience to properly interpret and fully understand such  
complex legal documents and their ramifications for the existing shareholders, decided,  
rightfully so, to consult Replicor’s legal counsel, Séguin Racine.  
[221] The Court fails to see any oppressive conduct toward M. McCarthy who clearly  
thought that the Management Directors should have trusted and relied on the Jennings  
Brothersopinion and representations and that they should have signed the Draft  
Agreements in the following days without questioning the same.  
[222] The evidence satisfies the Court that the legal advice sought from Séguin Racine  
was directly related to the Draft Agreements and to ascertaining that M. Bazinet’s  
concerns at the time were well founded or not.  
[223] It is now obvious, in the eyes of the Court, that M. Bazinet’s concerns shared by  
the other two Management Directors were confirmed by Replicor’s lawyers.  
[224] It is also obvious that, contrary to the Jennings Brothers’ assertions, Venrock was  
agreeable to pursue the negotiations and that going forward, Venrock’s legal  
representatives accepted to further modify the Draft Agreements in line with Séguin  
Racine’s proposals that aimed to further protect the interests of the existing shareholders.  
[225] With all due respect, in such circumstances, it is irrelevant to see any legal opinion  
provided in June 2015 by Séguin Racine to Replicor in connection with the Draft  
Agreements whether that opinion was provided in writing or not.  
[226] It is sufficiently clear that the legal advice provided pertained to Séguin Racine’s  
appreciation of the Draft Agreement submitted for their perusal by M. Bazinet in mid-June  
2015 since the same could no longer be modified according to the Jennings Brothers.  
[227] At trial, Plaintiffs’ counsel endeavoured to get M. Bazinet and A. Vaillant to indicate  
which portions of the Draft Agreements they were uncomfortable with and then have them  
explain why. In so doing, Plaintiffs’ goal was obvious, namely try to establish that the  
Management Directors’ concerns with the wording of the Draft Agreements, approved by  
the Jennings Brothers, were not that serious to justify adopting the June 17th Decision.  
[228] Clearly, having access to the legal opinion, if it exists in written form, would have  
helped identify the issues or concerns addressed at the time by Replicor’s lawyers at M.  
Bazinet’s behest. But again, this constituted, in the Court’s opinion, a futile and  
unnecessary exercise that was not likely to assist the Court in its task to deal with the real  
questions at issue.  
PAGE: 43  
[229] At issue is not to determine if ultimately Replicor, its shareholders and the  
Management Directors could have and should have lived with the Draft Agreements,  
wholeheartedly approved by the Jennings Brothers and conveniently supported after the  
fact by M. McCarthy.  
[230] It is not the role of the Court to review the wording of the Draft Agreements in order  
to verify if the Management Directors’ concerns confirmed by Replicor’s lawyers were  
sufficient concerns to justify the June 17th Decision and whether the Jennings Brothers  
were justified to express their dissidence to the same.  
[231] The Court cannot disregard the fact that subsequently to June 17, 2015, Séguin  
Racine successfully proposed various modifications to the Draft Agreements102 in order  
to alleviate the Management Directors’ legitimate earlier concerns.  
[232] The real issue is whether despite the dissidence of the Jennings Brothers, the June  
17th Decision made by the Management Directors was a reasonable business decision or  
not under the circumstances.  
[233] The Court answers in the affirmative. It was indeed a reasonable business  
decision. It was not the only reasonable business decision that the Management Directors  
could have arrived at. But the June 17th Decision was definitely among one of those  
[234] Indeed, faced with a range of decisions, the Management Directors, based on their  
experience as officers and directors of Replicor, on their own analysis of the merits of the  
Amended Term Sheet and of the Draft Agreements, decided that the best option available  
for Replicor and its shareholders was to terminate the Amended Term Sheet especially  
since they were clearly led to believe - albeit falsely - that all further negotiations with  
Venrock and modifications to the Draft Agreements were impossible.  
[235] In their minds, without the possibly of pursuing the negotiations to address their  
legitimate concerns, the Jennings Brothers’ position–that they thought to be accurate at  
the time - left them with no other reasonable alternative.  
[236] Courts have previously held that the evaluation of a term sheet or a decision to  
accept an investment were exercises that fall under the business judgment rule.103  
[237] Under the present circumstances, there is no basis for this Court to intervene in  
the business judgment exercised by the Management Directors on June 17, 2015.  
102 P-32.  
103 Hooper v. MDS (Canada) inc., 2007 QCCS 3989, para. 80.  
PAGE: 44  
[238] Moreover, there is simply no evidence to conclude that the June 17th Decision  
actually constitutes a conduct that can be deemed oppressive, unfairly prejudicial or an  
unfair disregard of Plaintiffs’ reasonable expectation.  
[239] The Court shares Defendants counsel’s opinion that in reality, Plaintiffs, under the  
guise of an oppression claim, are simply asking this Court to rewrite history and impose  
upon Defendants their vision of the merits of the Amended Term Sheet.  
[240] Consequently, in the absence of having established in a preponderant manner that  
they had reasonable expectations in the matter at hand, Plaintiffs have also failed to  
satisfy their onus under the second part of the BCE test, namely that their inexistent”  
reasonable expectation was violated by the conduct of Defendants falling within the terms  
“oppression”, “unfair prejudice” or “unfair disregard” of their interests as shareholders of  
[241] Incidentally, given the special circumstances of this case, the Court also finds that  
the failure to hold Annual General Meetings of the shareholders of Replicor in the recent  
year does not constitute an act of oppression towards Plaintiffs giving rise to the remedy  
[242] All in all, Plaintiffs failed to satisfy, with preponderant evidence, any of the criteria  
of Section 241 CBCA giving rise to the remedy they are seeking, which in itself is quite  
extraordinary under the circumstances as it will be more fully discussed hereafter.  
[243] As previously determined, Plaintiffs failed to successfully demonstrate a breach of  
their reasonable expectation caused by conduct of Defendants falling within the terms of  
“oppression”, “unfair prejudice” or “unfair disregard” of their interests pursuant to  
Section 241 CBCA.  
[244] Under such circumstances, Plaintiffs also failed to establish that they are entitled  
to the remedy they are seeking.  
[245] In any event, the Court is of the view that the remedy sought by Plaintiffs would  
not have been an appropriate and equitable remedy under the present circumstances.  
[246] Section 241(3) CBCA sets out the Court’s broad powers when it comes to  
remedying oppression:  
Powers of court  
241 (3) In connection with an application under this section, the court may make  
any interim or final order it thinks fit including, without limiting the generality of the  
(a) an order restraining the conduct complained of;  
(b) an order appointing a receiver or receiver-manager;  
PAGE: 45  
(c) an order to regulate a corporation’s affairs by amending the articles or by-laws  
or creating or amending a unanimous shareholder agreement;  
(d) an order directing an issue or exchange of securities;  
(e) an order appointing directors in place of or in addition to all or any of the  
directors then in office;  
(f) an order directing a corporation, subject to subsection (6), or any other person,  
to purchase securities of a security holder;  
(g) an order directing a corporation, subject to subsection (6), or any other person,  
to pay a security holder any part of the monies that the security holder paid for  
(h) an order varying or setting aside a transaction or contract to which a corporation  
is a party and compensating the corporation or any other party to the transaction  
or contract;  
(i) an order requiring a corporation, within a time specified by the court, to produce  
to the court or an interested person financial statements in the form required by  
section 155 or an accounting in such other form as the court may determine;  
(j) an order compensating an aggrieved person;  
(k) an order directing rectification of the registers or other records of a corporation  
under section 243;  
(l) an order liquidating and dissolving the corporation;  
(m) an order directing an investigation under Part XIX to be made; and  
(n) an order requiring the trial of any issue.  
[Emphasis added]  
[247] Despite their broadness, these powers can only be exercised for a specific  
purpose: “that is, to rectify the oppression. […] If it has some other result the remedy  
would be one which is not authorized by law”.104  
[248] The following teachings of the Supreme Court of Canada in Wilson v. Alharayeri105  
are quite relevant herein:  
104 Naneff v. Con-Crete Holdings Ltd., 1995 959 (ON CA), p. 11.  
105 2017 SCC 39.  
PAGE: 46  
[52] […] Fairness requires that, where “relief is justified to correct an  
oppressive type of situation, the surgery should be done with a scalpel, and  
not a battle axe”. Where there is a personal benefit but no finding of bad faith,  
fairness may require an order to be fashioned by considering the amount of the  
personal benefit. In some cases, fairness may entail allocating responsibility  
partially to the corporation and partially to directors personally. For example, in  
Wood Estate, a shareholder made a short-term loan to the corporation with the  
reasonable expectation that it would be repaid from the proceeds of a specific  
transaction. Those proceeds were instead applied to corporate purposes, as well  
as to repayment of the loans made to the corporation by the defendant directors  
and officer and by another shareholder. D. M. Brown J. held the defendant  
directors and officer liable for the amounts used to repay their own loans and the  
shareholder loan, and also ordered the corporation to pay an equal amount  
towards the balance of the loan. As this last example shows, the fairness principle  
is ultimately unamenable to formulaic exposition and must be assessed on a case-  
by-case basis having regard to all of the circumstances.  
[53] Second, as explained above, any order made under s. 241(3) should go  
no further than necessary to rectify the oppression. This follows from s. 241’s  
remedial purpose insofar as it aims to correct the injustice between the parties.  
[54] Third, any order made under s. 241(3) may serve only to vindicate the  
reasonable expectations of security holders, creditors, directors or officers in their  
capacity as corporate stakeholders. The oppression remedy recognizes that,  
behind a corporation, there are individuals with “rights, expectations and  
obligations inter se which are not necessarily submerged in the company  
structure”. But it protects only those expectations derived from an  
individual’s status as a security holder, creditor, director or officer.  
Accordingly, remedial orders under s. 241(3) may respond only to those  
expectations. They may not vindicate expectations arising merely by virtue  
of a familial or other personal relationship. And they may not serve a purely  
tactical purpose. In particular, a complainant should not be permitted to  
jump the creditors’ queue by seeking relief against a director personally. The  
scent of tactics may therefore be considered in determining whether or not  
it is appropriate to impose personal liability on a director under s. 241(3).  
Overall, the third principle requires that an order under s. 241(3) remain rooted in,  
informed by, and responsive to the reasonable expectations of the corporate  
[55] Fourth and finally a court should consider the general corporate  
law context in exercising its remedial discretion under s. 241(3). As Farley J.  
put it, statutory oppression “can be a help; it can’t be the total law with  
everything else ignored or completely secondary”. This means that director  
liability cannot be a surrogate for other forms of statutory or common law relief,  
particularly where such other relief may be more fitting in the circumstances.  
[Emphasis added, references omitted]  
PAGE: 47  
[249] The Court draws from the foregoing that when determining the appropriate  
remedy, the Court must be guided by the following principles:  
- A remedy must be precise and as minimally intrusive as possible on the affairs  
of the corporation;  
- The remedy should not go further than necessary to rectify the oppression;  
- The remedy must be rooted in, informed by, and responsive to the reasonable  
expectations of the claimant;  
- The Court must consider the general corporate law context when exercising its  
remedial discretion.106  
[250] Plaintiffs are asking this Court to order that Replicor issues in their  
favour 1,960,000 new shares - without having to pay any consideration for the same -  
which represents the number of additional shares they should have received had they not  
supposedly overpaid upon making their Second and Third Investments.  
[251] Plaintiffs justify their position on the basis that, without the PAVI and the  
representations made about Venrock by R. Jennings, Replicor’s shares should have been  
valued at $2.50/share at the time that the Second and Third Investments were made  
instead of $5 and $10.  
[252] To all intents and purposes, Plaintiffs are asking the Court to determine the fair  
market value of Replicor’s shares in December 2014 and March 2015 – which they  
advance was supposed to be at $2.50/share but failed to provide any evidence in  
support of their assertion.  
[253] Moreover, Plaintiffs have failed to prove that they actually suffered damages  
directly caused by Defendants’ fault.  
[254] The Court cannot disregard the fact that from 2018 until now, Replicor’s shares  
are being sold at $13/share.107  
[255] Section 238 CBCA provides that former registered holders of security issued by a  
corporation like Replicor in the present instance, can be considered “complainants” for  
the purpose of remedy oppression.  
[256] That being said, given the particular nature of the remedy sought herein, the Court  
is of the view that the remedy sought must not only be considered, inter alia, in light of  
the “complainant” status at the time of Plaintiffs’ alleged oppression but also at the time  
that the appropriate remedy is determined, which is at the time of rendering this judgment.  
106 Ibid.  
107 D-1, page 9 and D-13, pages 7 and 15.  
PAGE: 48  
[257] Generally, a “complainant” is seeking to have its shares bought back or to acquire  
the shares of other shareholders although other forms of remedy can also be sought. In  
other circumstances, it can seek to get shares that it had acquired but that were never  
delivered in a context of oppression.  
[258] But, in the present instance, Plaintiffs, as former shareholders, are requesting the  
issuance of 1,960,000 additional shares, at no cost to them, to compensate the fact that  
they would have overpaid for their shares that they already disposed of.  
[259] Surprisingly, it was only during M. McCarthy’s cross-examination that the Court  
was made aware for the very first time of the transfer of all of Plaintiffs’ shares to two third  
party entities, Abyssinia Holdings Inc. and Phoenician Global Markets Inc. which  
apparently took place in February 2021.  
[260] The Court used the word “apparently” because M. McCarthy also failed to provide  
any specific details which could have an impact on this Court’s assessment of the  
appropriateness of the remedy sought, namely  
- The reasons for the transfer of shares;  
- The relationship, if any, between Plaintiffs and the third parties;  
- The consideration or any other benefit received or arising from the transfer; and  
- The price at which the shares were transferred and the manner by which that  
price was determined.  
[261] M. McCarthy’s testimony on that specific unexpected issue was vague and  
inconclusive at best. It appeared as if the witness was reluctant to provide any relevant  
details to, at least, determine if Plaintiffs incurred a loss or a profit with such transfers.  
[262] Such information was relevant in the context where Plaintiffs want to acquire  
1,960,000 new shares without paying any consideration, on the basis that they overpaid  
their previously held shares that they chose to dispose of at an unknown consideration.  
[263] It is true that in doing so, Plaintiffs did not lose their status of “complainants, but  
such a decision may have a potential impact on the remedy sought.  
[264] While the absence of good faith does not preclude a shareholder from  
commencing oppression proceedings, it becomes relevant at the time of determining  
whether the Court should use its discretion to provide the relief sought.108  
Mayer v. Mayer, 2012 BCCA 77, para. 207 209; see also Pelletier v. Recyclage Yamaska inc., J.E.  
92-1329 (C.S.), p. 15 16, partially reversed but not on this point J.E. 94-357 (C.A.).  
PAGE: 49  
[265] Indeed, while Plaintiffs are asking that the Court grant them 1,960,000 additional  
shares in Replicor, they failed to disclose the fact that they were no longer shareholders–  
and have not been since apparently February 2021.  
[266] With all due respect, the lack of transparency on the part of McCarthy regarding  
such a relevant fact as the status of shareholders is troubling.  
[267] The evidence has revealed that, in February 2021, Plaintiffs transferred all their  
shares to third parties without providing any details relating to the exact identity of the  
purchasers (arms length or not), the sale price, the consideration received and any  
financial or tax benefit arising from this transfer.  
[268] Even if there was little or no consideration received, there can and should be a tax  
or financial advantage (or consequences) in making this transfer. A reasonable person  
can assume that there must be a benefit flowing from this transfer. Otherwise, why would  
Plaintiffs incur significant professional fees for planning and executing such a transaction?  
[269] Why did McCarthy chose to conceal such relevant facts from the Court and  
seemingly from Defendants?  
[270] Be that as it may, Plaintiffs have failed to satisfy their burden of proof to  
demonstrate that they actually suffered any damages as a direct oppressive conduct of  
Defendants and that they are entitled to the relief sought.  
[271] Moreover, the relief sought would confer a substantial advantage to Plaintiffs that  
would go beyond the realm of what is just and equitable when it comes to redressing any  
conceivable expectation that Plaintiffs could have had upon making their Second and  
Third Investments.  
[272] The facts speak for themselves.  
[273] In March 2015, following their Third Investment, Plaintiffs collectively held 4.07%  
of Replicor’s shares.  
[274] With an additional 1,960,000 shares, to the extent that Plaintiffs and the third  
parties to which their shares were transferred are part of the same “group”, their collective  
stake in Replicor would have gone from 4.07% to 10.66%.  
[275] The Court was informed that by holding more than 5% of Replicor shares, Plaintiffs  
would have enjoyed, for their sole and exclusive benefit, additional rights that no other  
Replicor shareholder is entitled to such as the right to make proposals to annual meetings  
(for example, nominations for the election of directors - Section 137(4) CBCA).  
[276] Moreover, by holding more than 10% of Replicor shares, Plaintiffs would have  
been entitled, for their sole and exclusive benefit, to block future major transaction like a  
PAGE: 50  
take-over bid - Section 206(2) CBCA, thereby potentially depriving Replicor and all other  
shareholders of future acquisition opportunities.  
[277] The Court emphatically agrees with Defendantscounsel that such a remedy is  
neither fair nor surgical.  
[278] Finally, such a remedy if awarded would have been inequitable to the other existing  
[279] The Court was also informed that currently, Replicor has a total of approximately  
330 shareholders.  
[280] Since 2018, the current share price has been set at $13/share and Replicor has  
sold shares at that price.  
[281] At the price of $13/share, the issuance of 1,960,000 shares would normally require  
a total investment of $25,480,000 by Plaintiffs.  
[282] Despite this, Plaintiffs are asking the Court to order the issuance, on the date of  
the present judgment, of 1,960,000 additional shares established on the basis of  
$2.50/share, but with no payment whatsoever to be made on their part.  
[283] Needless to say that such an extraordinary relief would clearly go beyond Plaintiffs’  
purported reasonable expectation which, in any event, has not been established by a  
preponderance of probabilities.  
[284] The Court cannot ignore neither that granting such a remedy could well violate the  
reasonable expectation of other shareholders of Replicor that their shares would not be  
diluted by the issuance of a significant number of new shares at a severely discounted  
price ($2.50/share).  
[285] In fact, had the Court granted the remedy sought by Plaintiffs, it would have had  
to conclude that the value of the shares of Replicor is presently of $2.50/share. Had such  
a judgment been rendered, Replicor’s shareholders who purchased shares at a price  
higher than $2.50/share - which is the case of all shareholders who purchased shares  
since July 2014 - might have concluded, rightfully so, that they paid too much for their  
shares and could likely seek a similar relief, or reimbursement, for the investments made.  
Such an outcome would force Replicor and its directors to defend the decisions they made  
in good faith in the course of the past years and fight for the survival of the company.  
[286] The outcome sought by Plaintiffs just does not make any sense in the present  
[287] The Court has no hesitation to state that it would not have granted such an  
unreasonable, excessive if not abusive remedy under the present circumstances.  
PAGE: 51  
[288] MAINTAINS Defendants’ Plea;  
[289] DISMISSES the Amended Originating Application of Plaintiffs, RJM56 Holdings  
Inc. and Kobuck Ltd.;  
[290] THE WHOLE with legal costs against Plaintiffs solidarily.  
Mtre David Stolow  
Kugler, Kandestin s.e.n.c.r.l., L.L.P.  
Counsel for Plaintiffs RJM56 Holdings Inc. and Kobuck Ltd.  
Mtre Tommy Tremblay  
Mtre Daniel Baum  
Mtre Fady Toban  
Langlois avocats, s.e.n.c.r.l.  
Counsel for Defendants Michel Bazinet, Léo Bazinet and Andrew Vaillant  
Mtre Éric C. Lefebvre  
Norton Rose Fulbright Canada, s.e.n.c.r.l., s.r.l.  
Counsel for Defendant Replicor Inc.  
Mtre Quentin Montpetit  
Osler, Hoskin & Harcourt, s.e.n.c.r.l., s.r.l.  
Counsel for Mis-en-cause Robert Jennings  
Hearing dates:  
April 19, 20, 21, 22, 2022 and May 13, 2022  

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