What happened
In 2018, CLR, a company belonging to three senior executives of the RESO group, invested $250,000 in shares of a Canadian biotech company developing a cancer screening test. In 2022, Canada imposed sanctions on RESO. In 2025, following a shareholder conflict, CLR brought a claim for breach of its rights as a minority shareholder and for a compelled buyout of its shares at market value. The court granted the buyout claim but specified that payment may be made only in compliance with sanctions legislation, that is, once it is confirmed that the sanctions do not apply to the claimant. The court left the question of whether the sanctions apply to the discretion of the Canadian regulator, noting “red flags”: the complex corporate ownership structure and the fact that the claimant’s shareholders remain senior executives of RESO.
Why it is notable
Sanctions against a legal entity can also affect companies belonging to its managers. The Canadian court granted the share buyout claim but made the payments conditional on sanctions compliance.