06:45 AM EDT, 08/14/2024 (MT Newswires) -- Parkland (PKI.TO) late on Tuesday said it is "surprised and disappointed" by Simpson Oil's initiation of litigation related to a 2019 governance agreement.

Parkland rejected the what it called "a routine turnover in the management team over the past five years" led to a change that would relieve Simpson Oil of its obligations under the companies' governance agreement.

"This desperate legal maneuvering is without precedent," Parkland said.

Simpson Oil on Tuesday opened an application with the Ontario Superior Court of Justice seeking a declaration that the standstill and voting restrictions under the governance agreement have ceased to apply due to a material change in the composition of Parkland's senior management in 2019.

The governance agreement was part of a transaction in which Parkland acquired 75% of SOL Investment, resulting in Simpson Oil becoming a large Parkland shareholder.

Parkland said it has made progress on several matters of concern to Simpson Oil, including the transition to a new chairman, Michael Jennings, and ongoing board renewal, with three new director appointments. Parkland said it also remains willing to terminate the governance agreement and reappoint two Simpson Oil nominees to the board.

"Parkland has worked tirelessly to resolve differences with SOL whose latest actions indicate they are seeking greater influence over our board than we believe is in the best interests of all our shareholders," said Jennings.