Neptune Wellness to appeal court ruling in favor of former CEO
Neptune Wellness Solutions announced that it has received a judgment from the Superior Court of Quebec regarding certain previously disclosed claims made by the corporation's former CEO against the corporation in respect of certain royalty payments alleged to be owed and owing to the former CEO pursuant to the terms of an agreement entered into on February 23, 2001 between Neptune and a corporation controlled by the Former CEO. The corporation had also filed a counterclaim against the former CEO disputing the validity and interpretation of certain clauses contained in the agreement and claiming the repayment of certain amounts previously paid to the former CEO pursuant to the terms of the agreement. Under the terms of the agreement, it was alleged by the former CEO that annual royalties be payable to the former CEO, with no limit to its duration, of 1% of the sales and other revenues made by Neptune; the interpretation of which was challenged by the corporation. Pursuant to the judgment rendered, which Neptune intends to appeal, the court ruled in favour of the former CEO and rejected the counterclaim filed by the corporation. As a result, the court awarded the former CEO payments determined by the court to be owed under the agreement of 1% of all sales and revenues of the corporation incurred since March 1, 2014, which payments remain to be finally determined taking into account interest, judicial cost and other expenses. The court also declared that, pursuant to the terms of the agreement, the royalty payments of 1% of the sales and other revenue made by the corporation on a consolidated basis are to be payable by the corporation to the former CEO biannually, but only to the extent that the disbursement of the royalty would not cause the corporation to have a negative earnings before interest, taxes and amortization.