Zildjian son wins lawsuit against family
Published Tuesday December 23rd, 2008
Court | Famous cymbal-maker told to pay more than $500K
A judge has ruled in favour of a member of a cymbal-making dynasty who's suing his family and its company, awarding him more than $500,000.
Wilson (Bill) Zildjian filed a lawsuit against his parents, his siblings and their company earlier this year.
Bill Zildjian claimed that as a shareholder of Sabian Ltd., one of the world's premiere cymbal makers, he was owed dividends.
Sabian, based in Meductic, was founded by Robert Zildjian, Bill's father, in 1981.
Robert Zildjian named the company after his three children: Sally Anne Teague (SA), Bill Zildjian (BI) and Andy Zildjian (AN).
Court of Queen's Bench Justice Paulette Garnett ruled on a summary-judgment motion on one aspect of Bill Zildjian's notice of action regarding shareholder dividends.
"The defence in this case is that Bill is not entitled to the dividends he claims because he was given gifts instead," Garnett wrote in her decision.
The gifts in question were payments of tens of thousands of dollars made to Bill Zildjian from his father and Sabian, totalling $290,000 from 2000-06.
Garnett noted, however, that those gifts "predated the declaration of Class A dividends in 2002 and continued after the declaration of dividends ended in 2005."
"There is nothing in any of the documents produced which equates 'gifts' with the payment of dividends," she said.
"The gifts were not a manner of paying the dividends."
The defence had also argued that Bill Zildjian had waived his rights to the dividends, but Garnett said it was clear he wasn't aware of those rights and therefore couldn't waive rights he didn't fully understand or know about.
The judge ruled Bill Zildjian is owed $517,575 for dividends and awarded him $2,500 in costs as well.
Garnett also ordered Sabian to pay Bill Zildjian five per cent interest on the outstanding dividend payments.
Bill Zildjian's lawyer, David Young, said that interest represents a significant sum, more than $200,000.
All told, he said, the ruling awards Bill Zildjian around $750,000.
The defence has declared its intent to appeal Garnett's decision, Young said, and he expects the parties will be in the Court of Appeal early in the new year.
The larger lawsuit continues, he said, and it could take years to resolve.
The dividends issue is just one aspect of Bill Zildjian's lawsuit against his family and the company his father built.
In his notice of action, Bill Zildjian alleges his father misuses company funds for personal expenses and that his brother Andy undermines his position and influence on the business.
He also claims Robert Zildjian has ignored established business regulations and protocols so as to maintain complete control of the company he founded.
Bill Zildjian also claims that he's stuck in this scenario because he can't sell his shares in the company without his father's approval.
"Bill has justifiably lost the trust and confidence in his father Robert and his brother Andy on which their business relationship has been premised," court documents state.
"Bill has no way to exit on fair terms from this situation without the assistance of the Court ... Some form of corporate divorce is the only practical solution."
Statements of defence filed by Sabian deny Bill Zildjian's allegations, noting that company bylaws have been followed and business has been properly conducted.
Young said Monday that Bill Zildjian has also filed a second lawsuit.
In addition to being a Sabian shareholder, he was an employee of the company, the lawyer said, but that changed when he was let go in September.
Zildjian, who lives in Maine but maintains a home in Woodstock as well, filed a wrongful dismissal lawsuit last month.
Young said Sabian has yet to file a statement of defence.
Peter Crocco, the Woodstock lawyer representing Sabian, couldn't be reached for comment Monday.
Sabian clients include Phil Collins, Nickelback drummer Daniel Adair and Barenaked Ladies drummer Tyler Stewart.
The Zildjian family has been making cymbals since the 17th century.
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