Suncor Class Action
Suncor announces termination of all Sunoco retailers in Ontario – Retailers launch class action lawsuit seeking up to $200 million for breach of franchise legislation
TORONTO, January 18, 2010 – An intended class action lawsuit was commenced today in the Ontario Superior Court of Justice on behalf of all Sunoco service station operators in Ontario against Suncor Energy Products Inc. and its parent company Suncor Energy Inc.- SU:NYSE/TSX.
The lawsuit follows on Suncor’s internal announcement last week of its intention to terminate the retailer franchise agreements of all 300 of its independent Sunoco retailers in Ontario.
Approximately 100 retail sites will be sold in April, 2010 while the remaining sites will be re-branded under the Petro-Canada banner with different operators. All 300 current Sunoco retailers will be terminated in the process.
The retailers assert in the lawsuit that Suncor failed to comply with Ontario’s franchise legislation when they entered into their most recent franchise agreements. This entitles the retailers to rescind their franchise agreements and obtain substantial compensation. The termination of the Sunoco retailers is part of Suncor’s decision to eliminate the Sunoco brand in Ontario following Suncor’s amalgamation with Petro-Canada in 2009. According to the plaintiff’s lawyer, David Sterns, “Suncor’s franchise operators have been treated as chattels in the amalgamation process. The operation of Ontario’s franchise legislation will result in Sunoco’s dealers, who built up the Sunoco brand through years of hard work and loyal service, receiving a return on their personal efforts and investments.”
This lawsuit underscores the importance of franchise legislation and its potential impact on major corporate restructurings.
For more information contact David Sterns at email@example.com. Sotos LLP 416-977-0007.