Christie (2018 booking photo) and Redwood Meat Co. (file photo).

PREVIOUSLY

###

The majority shareholders of Redwood Meat Co. did not violate the terms of a temporary restraining order when they sold their controlling interest in the company to notorious Arcata rancher Raymond F. Christie earlier this year, Humboldt County Superior Court Judge Timothy Canning ruled in a decision entered earlier this week.

Redwood Meat, a family-operated institution in Humboldt County and the region’s only USDA-certified slaughterhouse, has been shut down for more than six months, with former majority owners Ryan Nylander and his uncle, John “Punk” Nylander, citing an unsustainable increase in operations costs.

The company’s operations have since come under intense scrutiny as three of John Nylander’s children — Stephanie Nylander, Rachel Nylander Flores, and Russel Nylander — filed a lawsuit as minority shareholders, accusing John (their father) and Ryan (their cousin) of grossly mismanaging the family company through fraud, embezzlement, tax evasion and document shredding.

That case remains pending. Canning’s ruling pertains to the terms of a temporary restraining order — issued on July 31 and modified the following month — that prohibits Ryan and John Nylander from selling or transferring any Redwood Meat Co. assets or taking any actions that require shareholder approval.

In their lawsuit, the plaintiffs are seeking to prevent their father and cousin from disposing of any company assets without the consent of Redwood Meat Co.’s board or shareholders and keep them from destroying any more records while ensuring that board and shareholder meetings are properly held as necessary.

In August, the plaintiffs’ attorney, Cyndy Day-Wilson, argued that John and Ryan Nylander violated the terms of that restraining order by selling their shares to Christie, who was once convicted on 26 misdemeanor counts of dumping cattle carcasses within 150 feet of state waters and later faced felony animal cruelty charges based on cattle found starving or in otherwise poor condition at his ranch on the Arcata Bottoms. (The latter case was settled out of court.)

But Judge Canning ruled that John and Ryan were free to sell their shares to Christie because the stocks were their own personal property, not that of the company. And since the minority shareholders were offered the same price for their own shares, the plaintiffs have no grounds to cry foul or seek injunctive relief negating the sale, his ruling states.

But that doesn’t mean that the larger case can’t move forward.

“Because John and Ryan are no longer shareholders in Redwood Meat, the Court denies the request for preliminary injunctive relief as to them,” Canning’s ruling says, before adding, “Of course, they may still be subject to a claim for monetary damages, whether to the minority shareholders or derivatively to Redwood Meat.”

Judge Canning did enter a new preliminary injunction, though both parties have already agreed to its terms — namely, that Redwood Meat Co. is prohibited from:

  1. Selling any real or personal property that is the property of Redwood Meat Co., Inc., outside the ordinary course of business without shareholder approval at a properly noticed meeting;
  2. Destroying any records of Redwood Meat Co., Inc.:
  3. Taking any corporate action that requires shareholder approval under the Company’s bylaws, or under the Corporations Code, without prior shareholder approval at a properly noticed shareholder meeting; and
  4. Taking any action that is in violation of Redwood Meat Co., Inc.’s bylaws or the California Corporations Code.

The Outpost will continue to follow this case.