High Liner Foods has finalized a settlement in a lawsuit it initiated against Brian Wynn for what it claimed were false representations and warranties in connection with its purchase of Rubicon Resources.
High Liner completed the purchase of Rubicon Resources – a shrimp importer and distributor located in Culver City, California, U.S.A. – in 2017. The sale closed for USD 107 million (then EUR 98 million) – with 70 percent of that total paid in cash and 30 percent paid in roughly 2.43 million shares in High Liner stock.
Soon after the purchase, Rubicon lost most of its value. The company lost a contract with Sam’s Club worth USD 95 million (then EUR 87 million), and Kroger, which previously had placed USD 107 million worth of sales from the company, significantly cut back on its purchasing from Rubicon.
High Liner then sued Rubicon and Wynn, claiming they made false representations and warranties in connection with the sale of Rubicon Resources and that Wynn failed to disclose the company’s issues with Sam’s Club and Kroger.
Soon after the purchase and the loss of the major contracts, High Liner saw significant drops in sales in 2018 and ended up laying off 14 percent of its workforce as part of reorganization efforts. These negative trends continued into 2019, as then-CEO Rod Hepponstall embarked on a five-step “critical initiative plan” to turn the company around. As Covid-19 further disrupted the company, High Liner only managed to return to earnings growth in Q3 2020.
In November 2023, a panel of arbitrators awarded High Liner USD 15.5 million (EUR 14.2 million), finding Wynn and Rubicon both made fraudulent representations during the sale of Rubicon Resources.
Now, High Liner has finalized a settlement agreement between it, Wynn, and Rubicon that cancels the issuance of the 2.43 million shares in the company. Based on a closing price of CAD 12.70 (USD 9.40, EUR 8.62) on 1 March, as well as the exchange rate at the time, the shares are worth approximately USD 22.5 million (EUR 20.6 million), High Liner said.
Another USD 5.65 million (EUR 5.18 million) will be paid by Wynn and other Rubicon vendors to ...
