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ARTICLE · 07 JUNE 2022

From Deadlock To Liquidation – A Cautionary Tale

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Petersen and Hawley are identical twin brothers who equally own shares of a BC company, Value Equity Ltd.

CanadaCorporate/Commercial Law
Jordanna Cytrynbaum
Jordanna Cytrynbaum
Jessica L. Lewis
Jessica L. Lewis
Carey Veinotte
Carey Veinotte
Shayna L. Clarke
Shayna L. Clarke
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Petersen v. Hawley1 serves as a stark reminder that "shareholders of closely-held companies who go into business together without providing for the resolution of future conflicts in a written agreement are courting disaster - even if (and perhaps especially if) they are related by blood."2 In Reasons released May 18, 2022, the British Columbia Court of Appeal upheld a decision by the Chambers Judge that it was "just and equitable" to order liquidation of a deadlocked company due to an ongoing and bitter conflict between identical twin brothers, each holding 50% of shares of the family company.

Background

Petersen and Hawley are identical twin brothers who equally own shares of a BC company, Value Equity Ltd. (Value). Value holds the real assets of the family company, "The Mega Group of Companies." The most valuable asset in Value's portfolio is a property in Surrey, BC that Value rents to an operating company held by the brothers. The ongoing litigation centres

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