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SOMBA K'E/YELLOWKNIFE
The distribution of power at the owners' table at the Black Knight Pub hangs in the balance as investors head to court to fight over the sale of 25,000 business shares that one original partner claims is unfair.

The disagreement stems from the 2011 sale of shares to two of the business's shareholders: former GNWT deputy minister Dwight Noseworthy and Rita Wray, widow of Gordon Wray, who was an original shareholder.

In an affidavit signed by one of the original partners in the pub, Bogus Zdyb, it states that the two shareholders took part in "oppressive and unfairly prejudicial action." He is asking the deal be cancelled and any dividends improperly received be forfeited.

The pub has been a busy restaurant and bar in the city since 1997.

When it was first established, the originating partners shared 100,000 Class A shares: with three shareholders owning 25,000 each and two owning 12,500 each. The juggling of shares began when an original partner in the pub, Brian Fraser, had his 25,000 shares seized by creditors when his other financial ventures went sour about three years ago.

The shares eventually came under the control of numbered company 5749 NWT Inc., which Zdyb then negotiated with in April 2010, hoping to purchase Fraser's forfeited shares on behalf of the other shareholders. It's not clear who are the controlling interests behind 5749 NWT Inc. Neither Zdyb nor Noseworthy would comment when contacted by Yellowknifer.

"Sometime in May of 2010 an agreement was arrived at for the acquisition of the Brian Fraser shares from 5749 NWT Inc. for the sum of $310,000," stated Zdyb in the affidavit.

On Oct. 25, 2010, during a special shareholders meeting, the shareholders ordered the pub's board of directors to proceed with the purchase of the shares held by 5749 NWT Inc. for the price Zdyb had negotiated with a closing date of Nov. 30, 2010. The plan was to dissolve the shares once they were purchased, claimed Zdyb in his affidavit, which would then cause the remaining shareholders' shares to increase in value.

However, the deal never went through.

The shares were sold to Noseworthy and Rita Wray with a closing date of Feb. 15, 2011. Noseworthy acquired 7,000 shares for $84,000 while Rita Wray received 18,000 Class A shares worth $216,000.

The case arose in civil Supreme Court on Jan. 25 but was adjourned until March 8, giving the respondents' lawyer, who is based in Newfoundland, time to apply for a restricted appearance certificate, allowing the lawyer to actively practise law in the territory for up to one year.

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