Catalyst to appeal lawsuit dismissal
Lengthy legal battle continues over share of Wind Mobile
• Private equity firm Catalyst Capital Group Inc. will appeal an Ontario court ruling that tossed out its claim for a chunk of Wind Mobile, continuing its extensive legal battle for a share of the wireless startup now owned by Shaw Communications Inc.
The Ontario Superior Court of Justice dismissed in its entirety Catalyst’s lawsuit that alleged rival Bay Street firm West Face Capital Inc. used confidential information from a former Catalyst employee to buy a stake in Wind Mobile, a deal both firms were chasing in 2014.
West Face and a consortium of buyers ultimately bought Wind from Amsterdam- based telecom Vimpel-Com that fall, less than a month after Catalyst’s exclusive negotiations failed. Catalyst argued West Face couldn’t have landed the deal without confidential information from analyst Brandon Moyse, who was working on Catalyst’s telecom file before he quit in May 2014 and joined West Face in June. It asked the court to order West Face to hold its ownership of Wind in a trust for Catalyst.
But Justice Frank Newbould ruled this week that Moyse did not provide any information to West Face that enabled it to offer a better deal than Catalyst.
The judge believed Moyse’s assertion that he never discussed Wind with his new employer, which assigned him to other files before he was placed on leave after three and a half weeks in light of Catalyst’s non-compete clause.
Moyse did email West Face confidential memos unrelated to Wind during the hiring process, but the judge ruled it was an error and did not indicate he revealed details about Wind. The junior analyst also wiped his Black-Berry before returning it to Catalyst and deleted his browser history before turning his computer over to lawyers, but the judge said his intent was simply to get rid of personal information.
The judge went on to chastise Catalyst owner Newton Glassman, stating he had “considerable difficulty” accepting his evidence as reliable.
“He was aggressive, argumentative, refused to make concessions that should have been made and contradicted his own statements made contemporaneously in emails,” Newbould wrote.
On the other hand, he praised t he West Face witnesses as “straightforward” and “impressive.” He stated they “did not engage in overstatement.”
After Catalyst filed its initial lawsuit against West Face, Shaw bought Wind Mobile for $ 1.6 billion in late 2015. In June 2016, Catalyst sued West Face and the consortium of buyers including Globalive for $ 750 million, the amount it estimates it would have made if it had owned Wind at the time of the sale.
Catalyst will continue to pursue the second lawsuit as it appeals this decision, a spokesperson said Friday. Additional evidence has come out since the Moyse litigation that supports the new case that alleges conspiracy and breach of contract, the spokesperson said.
“We are deeply disappointed by the decision and the severe indications of possible bias displayed by Judge Newbould. 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,” Catalyst said in a written statement.
“Among other things, 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.”
West Face is “grateful for the vindication” the judge provided, according to a news release that highlighted the judge’s conclusions about the witnesses.
“The reasons for the complete dismissal of the case make clear that the lawsuit launched by Catalyst was without merit. We are confident that Catalyst’s other lawsuits against West Face and various other parties face similar obstacles,” chief executive Greg Boland said in a statement.