Judge Orders Shareholder Meeting For Summit Water, Latest Twist In Legal Fight
A group of litigants, centered around the original founders and managers of the Summit Water Company, have won a major victory in their court fight against the current managers of the Company.
In a decision about two weeks ago, a Third District Court judge ordered that a Shareholder Meeting for the company be held.
The judge’s ruling is the latest development after dueling lawsuits were filed in 2018.
Summit Water filed a multi-million-dollar lawsuit against the Estate of the late Hy Saunders, now represented by his wife Debra, son Brody Saunders; as well as Trilogy Limited, headed up by another company founder, the late Larry Knowles, and now run by his son Stuart Knowles.
The suit alleged that Saunders and Knowles improperly appropriated revenues that should have gone to the company, from a sale of water shares in 2010, and also, the sale of Summit’s Water Treatment Plant in 2013.
But the Founders group shot back with their own lawsuit. The Saunders Family Trust said the current company management has tried to cancel, or limit the voting rights, of 2600 Class A water shares held by the Trust. Trilogy Limited said their holdings, also 2600 Class A Shares, were targeted by the same action.
Both sides made oral arguments to Judge Richard Mrazik in a Telephone hearing on May 28th. According to the minutes of the session, the Judge granted a Temporary Restraining Order for the Saunders Trust and Trilogy.
The judge also granted the Motion to hold a Shareholder Meeting directing that it has to be held on or before July 23rd. Judge Mrazik said Summit Water is to set up the meeting, and it will be held virtually. The judge ruled that all outstanding Class A and Class B shares will be allowed to vote.
The shareholders will meet to vote on all the Summit Water board positions that have expired. The attorney for the Saunders Trust, Jefferson Gross, told KPCW that right now only one person on the Board was ever elected by the shareholders. That was Stuart Knowles. All the others have been appointed.
However, Summit Water isn’t accepting the judge’s decisions. The President of the company, Andy Garland, has confirmed they will appeal to the Utah Supreme Court to challenge the order for a shareholder meeting.
The exact date of the meeting has not been set.