Not to be trusted..
Not to be trusted... Essential Coffee’s CEO Todd Hiscock and his shareholder entities were found guilty of shareholder oppression in the Federal Court of Australia. The Court found that "Mr Hiscock could not be accepted as a reliable witness or a witness of truth".
In a scathing trial judgement the Federal Court made adverse credit findings against directors of Essential Coffee's holding company, Essential Investments Pty Ltd. It found that Todd Hiscock and James Cook had deliberately misled shareholders by knowingly providing them with false information. The trial judgement is publicly available on the Federal Court website: Jolan Pty Ltd v Essential Investments Pty Ltd (No 2) [2021] FCA 1533
In the costs judgement, the Federal Court took the rare step of ordering Essential Investments to pay the oppressed shareholder’s legal costs on the indemnity basis, due to the defendants’ unreasonable conduct of the proceedings and the making of allegations by the defendants that ought not to have been made. The costs judgement is publicly available on the Federal Court website: Jolan Pty Ltd v Essential Investments Pty Ltd (No 3) [2021] FCA 1627
Essential Investments was ordered to buy back its largest shareholder’s 1 million shares for $1.16 per share ($1.16 million), despite arguing that the shares were worth as little as $0.58 per share. The shares were purchased by a group of new and existing shareholders for the price ordered by the Court in order to save the company from being wound up. Essential Investments was then ordered to pay 90% of the oppressed shareholder’s legal costs (which exceeded $1.1 million), in addition to its own legal costs. In the same month, Essential Investments triggered an emergency $500,000 capital raise, selling shares for just $0.76 per share.