Carbone Restaurant Group’s founder failed to establish a rival two-person board in a May 28, 2026 Manitoba ruling that dismissed his oppression application and lifted an injunction preventing the company from issuing additional shares.
In Nasberg et al. v. Carbone Restaurant Group Ltd. et al., Justice Harris confirmed that the fast-food franchise company’s lawful directors were Lorne Rapkin, James Huber, Harvey Jenkala, Benjamin Nasberg and Kris Krohn. The decision therefore rejected Nasberg’s attempt to displace three directors; it did not remove Nasberg himself from the five-member board.
Nasberg and shareholder Carbone Coal Fired Pizza Inc. had sought relief over control of the company and financing that could dilute their holdings. At the hearing, Nasberg’s first request was confirmation that only he and Krohn constituted the board. He argued that shareholder votes had removed the other directors and that procedural objections were being used to obstruct those votes.
Excluded directors and incomplete notices
The dispute developed after the board resumed formal meetings in late 2025 amid concerns about the company’s finances and a proposed public offering. It terminated Nasberg’s employment and removed him as president and chief executive in January 2026. Those officer and employment positions were distinct from the directorship the court later confirmed.
Nasberg purported to convene shareholder meetings on February 18, March 13 and April 8. The court found that they were not properly called and that their decisions were invalid. Directors were excluded from notices, some shareholders did not receive notice, and the information supplied did not adequately explain the matters shareholders were being asked to decide.
Nasberg asked the court to cure the notice defects and recognize the election outcome. Harris declined, finding that the initial failure to notify the existing directors was deliberate and not in good faith. The later notices also failed to provide accurate information about the company’s financial position and capital needs.
Unresolved discrepancies in the share records compounded the problem. The judge found that shareholder meetings could not validly be convened until those issues were resolved, and that resolutions could not simply be assumed to reflect majority wishes. The reasons did not settle the disputed ownership figures.
A disputed resignation document
Nasberg also argued that Huber had never properly become a director because he had not signed a written consent. The company’s bylaw, however, permitted a person either to consent in writing or to act as a director following election or appointment. Harris found that Huber had continuously acted in that role, including through informal discussions about governance, financing and strategy.
A separate document purported to record Rapkin’s and Huber’s resignations in March 2025. Both denied resigning, and Jenkala disputed his apparent electronic signature. Harris found that the alleged resignation meeting and discussions had not occurred and concluded that the resolution was fabricated.
With Rapkin and Huber remaining directors, their attendance alongside Jenkala gave the contested board meetings the quorum needed to act, despite Nasberg’s and Krohn’s absence.
Financing and employment remedies
The board had approved a proposed private placement of five million common shares for US$5 million, with existing shareholders entitled to participate in proportion to their holdings. Harris found that the board had acted reasonably in seeking funding to keep the company operating and had acted lawfully in the company’s interests.
That finding defeated the oppression claim. The judge emphasized that directors’ duties ran to the corporation, rather than an individual shareholder, and that the planned offering allowed participating shareholders to maintain their proportionate ownership. The reasons did not establish that the financing had actually closed.
Harris also found that Nasberg’s mismanagement and misconduct had exposed the company to serious legal and financial liability. But the court distinguished the oppression proceeding from an employment claim: a wrongful-dismissal action would likely be the appropriate route for seeking redress over his termination. It did not award employment damages or decide such a claim.
The application was dismissed and the share-issue injunction was set aside, with costs.
Source: Nasberg et al. v. Carbone Restaurant Group Ltd. et al., 2026 MBKB 75.
