The shareholders of Environmental Management Solutions Inc. (EMS) have re-elected the board of directors of the company, but only by a bare 50.35 per cent majority. Frank D’Addario, the company’s founder, largest shareholder and fired CEO, says he is contemplating a legal challenge to the close vote. The management-supported board won just 214,650 more votes than D’Addario’s dissident slate, out of almost 30.5 million cast. A lawyer for D’Addario told the meeting there was a 350,000-vote swing in management’s favor because of irregularities in allowing and disallowing proxy votes. There also is dispute over 1.2 million votes for the management slate that arose from a stock grant that D’Addario’s side suggests was not to have been made before next November.
D’Addario and the company are already in litigation, including his claims totaling more than $28 million alleging defamation and wrongful termination. The current EMS management has authorized a lawsuit against D’Addario for alleged breaches of contract and fiduciary duty, listing "extraordinary" related-party transactions under D’Addario, who founded the company in 1995 and took it public in 2002. The company says the Ontario Securities Commission is probing "potential market manipulation, options trading issues and disclosure issues" during D’Addario’s tenure.
EMS is a specialist in soil remediation and organic waste management with operations in Quebec, Ontario and Alberta.