Sens’ Melnyk hitwith $1B suit

OTTAWA • John Ruddy and Trinity Developments have fired back at business partner Eugene Melnyk in a counterclaim for more than $1 billion, alleging the hockey magnate’s Ottawa Senators-affiliated company is on shaky financial footing and has been the main reason why their Lebreton Flats redevelopment partnership is ruined.

Ruddy’s lawyers filed his statement of defence and counterclaim Tuesday in response to a $700-million lawsuit filed last month by Melnyk’s Capital Sports Management Inc.

The two businessmen, who are the main partners of Rendezvous Lebreton Group, have the exclusive rights with the National Capital Commission to redevelop the contaminated swath of land west of downtown Ottawa.

They had wanted to build an arena surrounded by a new community, but the Rendezvous partnership is now imploding leaving the NCC to decide what it will do next.

None of the allegations made during this legal battle has been tested in front of a judge.

While Melnyk’s lawsuit alleged Capital Sports Management Inc. was kept in the dark about a Trinityinvolved mixed-use development planned across from Lebreton Flats at 900 Albert St., the statement of defence filed Tuesday alleges CSMI and Melnyk knew about the multi-tower project all along, pointing to Senators former CEO Cyril Leeder as being “well informed” about the future 65-storey complex.

The original CSMI lawsuit accused Ruddy of using the Lebreton Flats project to bolster the 900 Albert development, but Ruddy’s statement of defence says that’s poppycock. The project at 900 Albert would be “complementary” to the LeBreton Flats redevelopment, the statement of defence says.

Trinity has already spent millions on the Lebreton Flats project and “it would be logically absurd and financially self-destructive for Trinity to somehow undermine Lebreton via 900 Albert,” the statement of defence says.

In its lawsuit, Melnyk’s CSMI pulled back the curtain to reveal inner workings of Rendezvous, including details about negotiations with the NCC and the City of Ottawa.

Ruddy yanks the curtain right off the rod in his response, alleging that Melnyk was persistent in trying to get a free ride on a downtown arena.

According to the statement of defence, CSMI and Melnyk wanted the City of Ottawa or Trinity to fund and build the $500-million arena for the Senators with the hockey club getting 30 years of free rent.

CSMI also wanted power over the naming rights “and an unreasonable degree of control over the Lebreton project,” the statement of defence says.