Australis Seafoods notches court victory against former C-level executive

Jorge Bofill, a partner at law firm Bofill, Escobar, and Silva, represents Australis Seafood
Jorge Bofill, a partner at law firm Bofill, Escobar, and Silva, serves as a legal representative for Australis Seafood | Photo courtesy of Bofill, Escobar, and Silva
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A Chilean court has rejected a lawsuit filed by Santiago Garretón, a former administration and finance manager at salmon-farming firm Australis Seafoods, for wrongful termination.

Garretón was seeking CLP 842 million (USD 885,000, EUR 810,000) in compensation, but the court only awarded him CLP 10.1 million (USD 10,600, EUR 9,700) for unpaid vacation time.

Australis fired Garretón in September 2022 for “a serious breach of his employment obligations” after he reportedly provided former Australis CEO Ricardo Misraji with access to confidential information. The move “violated systems integrity and information confidentiality which implies, without a doubt, a serious breach of the obligations of [Garretón’s] contract,” according to the ruling.

Australis identified Garretón as an inner circle member of former company owner Isidoro Quiroga, who sold Australis in 2018 for USD 921 million (EUR 843 million) to Chinese foodservice company Joyvio. After the sale, Joyvio alleged Quiroga had engaged in one of the “greatest frauds in the history of Chile” in reportedly hiding, falsifying, or adulterating critical information during the sales process, including what the company now deems was deliberate overproduction to inflate salmon-production numbers and valuation when it came time to negotiate a sale.

Joyvio filed suit against Quiroga for USD 1.22 billion (EUR 1.12 billion) in restitution and damages.

Australis has framed the latest court victory as “a harsh setback” for Quiroga’s team, and after the court sided with the company, Australis responded by suing Garretón for unfair administration. 

“In this case, the basis of the complaint is directly linked to the discussion raised before the labor court, since the unfair administration is based on the violation of the directors’ and executives’ fiduciary duties with Australis,” said Jorge Bofill, a partner at law firm Bofill, Escobar, and Silva, representing Australis in the case.

The ruling further provides Joyvio with a strong foundation in its larger suit against Australis’ former controllers, according to Fernando Santibáñez, a partner at CS Abogados representing Australis in this case. 

“It is very remarkable how precise and detailed the ruling is, analyzing all the evidence provided in relation to the claims in the suit and rejecting them one by one, ratifying that the conduct described in the dismissal letter is serious and cannot be accepted in the normal development of an employment relationship,” he said.

In the meantime, Chile’s Superintendency of the Environment (SMA) has several sanctioning processes pending against Australis for exceeding the authorized production limits at a number of its grow-out centers from 2017 through 2021. Sanctions could include fines of several million dollars and, and closure of the centers in question.

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