Appeal may follow dismissal of suit over Wind confidentiality breach: Catalyst

The Ontario Superior Court last week threw out a lawsuit involving allegations that an analyst tipped off a competing fund manager about the strategy behind its Wind Mobile acquisition. On Thursday, Justice Frank Newbould dismissed “in its entirety” Catalyst Capital Group Inc.’s breach of confidential information suit against West Face Capital Inc. and its former junior analyst Brandon Moyse. Catalyst alleged in the suit that after leaving Catalyst and joining West Face, Moyse advised his new firm about Catalyst’s acquisition strategy for Wind, breaching his non-compete clause. West Face and the consortium purchased VimpelCom Ltd.’s stake in Wind in the fall of 2014 and, this past December, sold their stake in the company to Shaw Communications Inc. for $1.6 billion. The complaint — originally filed 2014 — though related to the Wind acquisition, is not directly connected to the still ongoing $750-million action — based on the proceeds from the consortium’s sale to Shaw — initiated in June by Catalyst against the group that includes West Face, claiming that a breach of an exclusivity agreement and leaks of confidential data prevented it from getting a deal for Wind. In an email, a spokesperson for Catalyst said it is now “considering all options regarding an appeal.” “Regardless of this questionable decision, after the Moyse litigation commenced, additional evidence came out that is supportive of our case against Globalive, West Face, VimpelCom and the other parties,” the spokesperson said. Court documents revealed that Catalyst’s acquisition of Wind was contingent on it getting assurances from the federal government that it would be able to sell spectrum to an incumbent after five years, a move that it said was the only way Wind could survive. Catalyst alleged West Face, which was also in the running for Wind, was able to trump its strategy because it had advanced knowledge of it. According to the documents, the 2014 bid for VimpelCom’s stake in Wind was successful partly because it was known that VimpelCom “wanted a clean exit” and that it was “not prepared to have any portion of the proceeds contingent on a future event such as the acquisition of spectrum,” something the consortium was able to deliver. Allegations that the consortium had to have known about Catalyst’s regulatory conditions because their offer “did not contain a clause requiring Government concessions” to allow the selling of spectrum to an incumbent were dismissed by the court because West Face and the consortium didn’t hold the “view of that Wind would need such concessions in order to survive,” court documents said. “All that West Face wanted from Industry Canada was more certainty regarding when, how, and at what cost Wind would be able to acquire additional spectrum” to upgrade to LTE from 3G, according to the documents. In his decision, Newbould also took issue with Glassman’s demeanor and his evidence, saying he was “aggressive, argumentative” and “refused to make concessions that should have been made and contradicted his own statements made contemporaneously in emails.” In a press release following the decision, West Face CEO Greg Boland said he’s “grateful for the vindication provided by the court’s decision” and that Newbould “concluded that the Catalyst witnesses — including in particular Newton Glassman — lacked reliability and credibility. By contrast, he found that the testimony from Brandon Moyse and the West Face witnesses was truthful and helpful.” On a couple of places in his decision, the judge referred to witnesses on the consortium’s side as “most impressive” and “straightforward.” The release added that the suit “was without merit” and West Face is “confident that Catalyst’s other lawsuits against West Face and various other parties face similar obstacles.” But the Catalyst spokesperson challenged the judge’s characterizations, stating that the company is “deeply disappointed by the decision and the severe indications of possible bias displayed by Judge Newbould." He added: “We believe that he did not give fair consideration to all of the evidence presented, ignored contradictory statements made by the defendants that are part of the Court record and delivered a judgement containing clear misstatements of fact.” Despite wiping his BlackBerry, deleting an email sent to West Face including “Catalyst information not involving Wind” and deleting Internet browsing history, the court found that there was no evidence that Catalyst information regarding Wind was passed to West Face, the decision said. “We are particularly concerned that the decision selectively ignores or discounts key testimony as it relates to the critical issue of possible destruction of evidence,” the spokesperson said. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Charelle Evelyn at cevelyn@thewirereport.ca

Appeal may follow dismissal of suit over Wind confidentiality breach: Catalyst

News | August 22, 2016

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Appeal may follow dismissal of suit over Wind confidentiality breach: Catalyst

News | August 22, 2016

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