Technically but not reasonably mistaken
|Area||Corporate Finance and Securities|
Article originally published in the Canadian Lawyer Magazine, January 2017
Excerpt from "Technically but not reasonably mistaken":
The facts in Mennillo were straightforward though, as the case demonstrated, subject to very different nuances and characterizations. In the winter of 2004, Messrs. Johnny Mennillo and Mario Rosati, two friends, agreed to create a transportation company, to which Mr. Mennillo would contribute the funding while Mr. Rosati would bring his expertise in the space. Intramodal was then incorporated under the Canada Business Corporations Act. Mr. Rosati reserved the name “Intramodal” in April 2004. The notices of subscription and the resolution were signed by Mr. Rosati alone. Intramodal’s affairs were marked by a consistent lack of formality and technical compliance. Virtually nothing was committed to writing, and the requirements of the corporate statute were rarely observed. Though both gentlemen were made directors and officers of the company, as well as shareholders, the initial resolutions were signed only by Mr. Rosati, neither paid for their shares and Mr. Mennillo’s share certificate was never signed. Business was conducted by handshake; the two had neither a partnership nor a shareholders’ agreement, and there was no written contract documenting Mr. Mennillo’s substantial funding advances.