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Rogers Communications battle reaches court as rival chairmen claim legitimacy -Breaking

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By Moira Warburton

VANCOUVER (Reuters) –The feud between the Rogers family and Canadian telecom giant Rogers (NYSE / Communications Inc) escalated on Tuesday, when Edward Rogers filed a lawsuit to validate his reconstituted board. His mother and sister quickly challenged this move.

Edward Rogers (son of Ted Rogers the founder) has been at war with his mother and sisters about who should run the company since he tried to fire Chief Executive Officer Joe Natale late in September.

Rogers Communications’ chairman was fired last week. Rogers retaliated and used his chair position at the Rogers Control Trust (the family-owned entity which owns most of the voting shares in Rogers Communications) to form a new board, which was recognized as Chairman on Sunday.

RCI has challenged the legitimacy of the move. The matter will be resolved in court.

On Nov. 1, the Supreme Court of British Columbia will hear arguments from RCI and Trust regarding Edward Rogers’ attempts to reconstitute a board by means of a written resolution, without holding a meeting of shareholders. RCI has also released a statement.

John MacDonald, his mother, and two sisters were the first board members to name Natale as their chair.

Canada is not known for its family disputes, so it has taken analysts and investors by shock. Stock has fallen more than 6% in the last week.

Edward Rogers stated in a Tuesday legal affidavit that he no longer trusts Natale as a leader of Shaw Communications (NYSE) – a C$20 billion transaction ($16.1 billion), and was the largest RCI deal ever.

He stated that Loretta Rogers his mother and fellow board director, Natale, supported her firing. She had given a speech to board members in late September stating the same.

Loretta Rogers refuted these claims in a statement she issued just hours after legal filings. She stated that Edward Rogers had provided inaccurate information to her about Natale’s performance as CEO.

According to her, she made a change in her role after speaking with independent directors and getting additional information. Melinda RogersHixon, her daughter, and Martha Rogers (also on the board) believed that Natale was the best CEO to run RCI and close the Shaw transaction.

MacDonald (chair of Rogers Communications Board) stated that Edward Rogers’ “unfortunate, biased view of events doesn’t reflect” the actual event.

MacDonald stated, in addition to the fact that Edward Rogers claimed that Natale was removed from the CEO position by the board of directors was false and that he would “fully correct the record” if he is given an opportunity to do so through court proceedings.

Rogers shares dropped 0.4% Tuesday. This brings the year’s decline to 5.5%. Some analysts reduced price targets because of family turmoil. However, shares of rival telecom companies rose, with BCE Inc (NYSE:) rising 16.2%, and Telus (NYSE;) rising 11.4%.

The Ontario Securities Commission has sought clarification from Edward Rogers about the uncertainty sparked by the row, Globe & Mail newspaper reported on Tuesday. OSC did not comment.

RCI has a special ownership structure. It is owned by 10 family and friends of Ted Rogers. This includes his children, widow and four grandchildren. Loretta’s nephew and several extended family friends. RCI’s Class A voting shares are owned by the trust at 97.5%.



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