Gildan Lawsuits Against Browning West Dismissed Ahead of Shareholder Meeting
Browning West LP — a long-term shareholder of Gildan Activewear that beneficially owns roughly 5% of the company’s shares — announces that the two “meritless lawsuits” brought by Gildan’s board of directors against the firm have been dismissed.
The press release states that the Superior Court of Quebec dismissed the board’s full Hart-Scott-Rodino (HSR) Act legal application. The judge in the matter said the courtroom is not the appropriate forum for the parties’ fight and that the upcoming shareholder meeting was better suited to hash out the issue.
Additionally, the Quebec Financial Markets Administrative Tribunal dismissed the board’s application that sought various orders about Browning West’s solicitation of proxies, including an order to prohibit Browning West’s Peter Lee from standing for election as a director of Gildan. The Tribunal found that the public interest would not be served by any of the relief sought by Gildan: “Gildan’s application aims to satisfy private interests, not the public interest.”
The news comes ahead of the May 28 Annual Meeting of Shareholders, where Browning West hopes to elect eight independent director candidates to Gildan’s board. Those candidates include Lee, Michael Kneeland, Glenn J. Chamandy (Gildan’s former CEO), Michener Chandlee, Ghislain Houle, Mélanie Kau, Karen Stuckey, and J.P. Towner.
Usman S. Nabi and Lee, of Browning West, commented, “We are pleased that the board’s frivolous legal proceedings aimed at preventing shareholders from securing necessary boardroom change have been dismissed in their entirety. Since day one, we have maintained that Browning West did not breach the HSR Act and that we have complied with proxy solicitation rules every step of the way. The board has continually pursued entrenchment, obfuscation, and disparagement of dissenting shareholders in an attempt to avoid accountability. The board has also repeatedly tried to weaponize legal action with the primary purpose of undermining and delaying Browning West and shareholders from exercising our rights at the upcoming Annual Meeting.”
Browning West says the proxy fight with Gildan is quickly becoming one of the most expensive in Canadian history, yet the firm remains encouraged as these lawsuits are put to rest. It looks forward to May 28, when shareholders can have an opportunity to vote on the director candidates, including reinstating Chamandy as CEO. Browning West believes reinstating Chamandy and electing Kneeland will pave a path toward long-term shareholder value.
Gildan’s Statement
Following this news, on May 17, Gildan published an investor presentation highlighting “critical reasons to vote for its director nominees” at the upcoming meeting of shareholders on May 28.
The presentation, titled “New, Focused CEO and Refreshed Board Delivering for All Gildan Shareholders,” highlights key topics, including:
- Why leadership change at Gildan was overdue.
- Why Vince Tyra’s skills and track record make him the right CEO for Gildan.
- Why Gildan’s board of directors are best positioned to serve all Gildan shareholders.
- Why Browning West’s Peter Lee is not qualified to serve as a Gildan director.
Both parties are asking shareholders, whether they attend the meeting or not, to vote for their respective director nominees — the blue proxy card for Gildan and the gold proxy card for Browning West.
