LOS ANGELES - Investment partnership Browning West, LP, which holds approximately 5% of Gildan Activewear Inc .'s (NYSE: NYSE:GIL) (TSX: GIL) shares, has initiated legal proceedings with the Superior Court of Quebec against Gildan and its Board of Directors.
The lawsuit, filed today, seeks to ensure that Gildan's upcoming Annual Meeting on May 28th, 2024, proceeds without delay or interference, as Browning West alleges the Board has engaged in actions that undermine shareholder rights.
The investment firm accuses Gildan’s Board of various oppressive tactics, including leaking sensitive information, soliciting proxies improperly, and engaging in meritless litigation to delay shareholder actions. Browning West also claims the Board has made misleading statements regarding the dismissal of Gildan's founder and the appointment of a new CEO, Vincent Tyra.
Browning West's representatives, Usman S. Nabi and Peter M. Lee, assert that the Board's actions are self-preserving and value-destructive. They have requested the Quebec Superior Court to enforce the scheduled date of the Annual Meeting and appoint an independent chair to oversee it, ensuring a fair and transparent voting process.
The firm has also begun mailing an information circular to Gildan shareholders, encouraging them to support changes at the Board level. Browning West’s approach is to communicate directly with shareholders to advocate for what they describe as necessary change within the company.
This legal action is part of a broader strategy by Browning West to exercise its rights as a significant shareholder and to influence the future direction of Gildan. The firm has outlined its intentions to make changes to the Board and management, although it acknowledges that these actions are subject to risks and uncertainties.
Browning West has enlisted Olshan Frome Wolosky LLP, Goodmans LLP, and IMK as legal counsel, with Longacre Square (NYSE:SQ) Partners and Pelican PR as advisors, and Carson Proxy for proxy services.
The information for this report is based on a press release statement and reflects only the facts presented therein. The outcomes of the legal proceedings and the potential impact on Gildan's governance and future direction remain to be seen.
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