market of undisclosed concerns about Perrault’s involvement in
the Turcolt Investment. Such a pleading is precise, and meets the
[ 155] Considering the “total mix” of information (Sharbern, at
para. 6) is necessary to determine the linkage between the alleged
misrepresentation and the alleged corrective statement. That mix
includes the information disclosed in the Q3 2016 Disclosure.27
[ 156] Colt in effect advised its shareholders in the Q3 2016 Dis-
closure that there was no reason to doubt the propriety of the
Turcolt Investment, stating that Colt (through Eurocolt) had
made the investment, while disclosing material facts which
( i) “[T]he shareholder agreement supporting the ownership
arrangement was unknown”;
( ii) “Substantially all cash in the Company is cash that resides in
Turcolt”, and “this cash is not available for Company’s use”;
( iii) Eurocolt had received a “short-term” shareholder loan in the
amount of ;250,000 so that it could it make the investment,
with interest at 12 per cent and the term of the loan having
expired such that it was payable on demand; and
( iv) The loan was secured on a personal guarantee given by
Perrault which was secured on, amongst other things, one
million shares owned by Perrault in CRME.
[ 157] Three weeks later, Colt advised its shareholders that Perrault was dismissed under adverse circumstances, with terms and
conditions of Perrault’s transitional role under negotiation and
with Colt reviewing its strategic options. An “appropriate” inference could be open to the trial judge, as permitted under Mask
CA, to find that it was only upon the December 2016 Press
Release that Colt shareholders had any reason to suspect impropriety by Perrault with respect to the Turcolt Investment. That
linkage only arose at that time.
[ 158] However, the Defendants submit that because the fact
that the Turcolt Investment was unauthorized was only disclosed
by Colt “for the first time”28 in the January 2017 Press Release,
there can be no linkage between the December 2016 Press
Release and the alleged misrepresentation. I do not agree.
27 Which did set out some corrective information by disclosing the existence of
the Turcolt Investment and the information set out at paras. 27-30 above.
28 The defendants rely on that phrase which was taken from Kauf’s factum on
the Public Correction Issue.