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The tumultuous family saga surrounding Redwood Meat Co. continued this morning in the fourth courtroom of the Humboldt County Courthouse as a trio of attorneys argued over the legality of a recent stock transaction that gave notorious Arcata rancher Ray Christie a controlling interest in the company.

Cyndy Day-Wilson, representing minority shareholders Stephanie, Rachel and Russel Nylander, accused defendants John (her father) and Ryan Nylander (her cousin) of violating a temporary restraining order when they sold their controlling interest in the company to Christie earlier this month.

“The court’s order was that the status quo should be maintained pending the resolution of this litigation,” Day-Wilson said, referring to an order from Judge Timothy Canning two weeks ago. “The defendants intentionally sold the company in violation of the (order). … They sold control of the company.”

Defense attorney Dustin Owens, representing Redwood Meat Co., argued that the language of that injunction was so “overly broad” that it effectively prohibits the company from doing business. He suggested changes to the injunction “to potentially allow the company to reopen and sell products or do business again.”

Meanwhile, attorney Heather Burke, a partner at the Harland Law Firm, made her first appearance on behalf of John and Ryan Nylander. Standing between Day-Wilson and Owens at the bar, Burke told Judge Canning that she had been retained by the defendants only yesterday.

The three lawyers stood shoulder to shoulder as they presented their arguments to the judge.

Day-Wilson explained an argument she filed in court on Tuesday, arguing that Owens had a conflict of interest in the case because he appeared to be making arguments on behalf of defendants John and Ryan Nylander rather than taking sides with the company.

She said her clients received no notice before her father and cousin sold their shares in the company, and they are now powerless with a new majority owner at the helm. (She never mentioned Christie by name, although his lawyer, Sacramento-based Stuart L. Smith, sat in the gallery behind her.)

“He (Christie) is going to take control of the company,” Day-Wilson said. “He’s going to take certain steps. He’s going to hire people, fire people, he’s going to control property and potentially sell property. I mean, there are a lot of issues here. We don’t even know what the assets of the company are. We don’t even know exactly what the shareholders allegedly sold to the defendants.”

Day-Wilson, who is seeking an injunction to prevent the company from falling apart or being sold in parts without input or participation from her clients, said she was led to believe that John and Ryan Nylander had to sell Redwood Meat Co. quickly because of a conditional building permit. But when she researched the matter, she found that no such permit existed – so the rush to close a deal was based on pure fiction.

“There was no reason why this (stock sale) had to be done at this time,” she said. “They could have waited until the injunction hearing. Instead, they ignored the court’s order. … They went ahead and sold the stock. They sold the company.”

Here, Judge Canning expressed some skepticism. He noted that she was talking about the sale of company assets. “But it sounds like the shares were sold. That’s not company assets,” he said.

“But aren’t the shares the company’s assets?” she asked.

Canning was about to say, “I don’t think so,” when a voice from the gallery called out, “No.” It was Smith, the lawyer representing Ray Christie.

“Excuse me!” Day-Wilson interrupted, turning to glare at Smith. She turned back to Judge Canning. “Your Honor, we are having a conversation. And I don’t need to, you know…”

Canning agreed and warned the gallery to “keep their comments to themselves.” (Smith apologized contritely to the court.)

From there, the attorneys argued about various other matters, including whether or not the defendants had been served with proper notice of the proceedings. Day-Wilson pointed out that John and Ryan Nylander were present and said they clearly got the message.

Owens stressed that he does indeed have Redwood Meat Co.’s interests in mind, saying the company “has to defy (the injunction) so it can continue to operate and make money.” He also argued that the sale of company stock did not violate that injunction: “Common stock is not a company asset.”

Burke doubted that Day-Wilson’s clients actually owned shares, as no one seemed to have known about their alleged holdings until recently. She argued that an injunction would be too drastic a measure in this case.

Day-Wilson assured the court that her clients were indeed shareholders and offered to provide Burke with evidence of this. And she maintained that the injunction had been violated.

“If an injunction is not granted, my clients will have no way of ensuring that the property is not sold and the value of the business is preserved.” While she did not mention Christie by name, she said there were “grave concerns about the proposed buyer.”

Canning ultimately concluded that certain issues must be presented before he could rule on the application for a preliminary injunction. He maintained the preliminary injunction, but sided with Owens by narrowing the language of that injunction somewhat. Rather than simply maintaining the status quo, the injunction now specifies that no action may be taken “outside the ordinary course of business without the consent of the shareholders at a duly notified meeting.”

The next temporary restraining order hearing was scheduled for Wednesday, September 18, at 9:15 a.m.