Enjoy your Free Paycation!
Home / Business / Stronach lawsuit lays bare family dispute over control of businesses

Stronach lawsuit lays bare family dispute over control of businesses

A lawsuit by business magnate Frank Stronach that seeks $520 million in compensation and damages against his daughter, two grandchildren and others has laid bare a two-year-old dispute about control and direction of the family firm.

Stronach, who created Magna International and built it into a global auto-parts giant, alleges in the lawsuit filed in Ontario Superior Court that president and chair Belinda Stronach and chief executive Alon Ossip mismanaged the family’s assets and conspired to take control of them.

“At the heart of this proceeding lies a series of unlawful actions undertaken by Belinda, together with Alon and others associated with them, to appropriate Stronach family assets for their own personal benefit,” reads the lawsuit.

The dispute focuses on control of The Stronach Group — the centre of a number of businesses focused on thoroughbred horse racing and gaming that Frank had expanded to farming and golf course development.

The suit, which has yet to be challenged in court, paints a picture of a trusting father who gave up control of family trusts in 2013 to serve in the National Parliament of his native Austria, with the understanding that he was still in de facto control and could retake his position when wanted.

Belinda Stronach denies allegations

The lawsuit says that in November 2016, Belinda Stronach, and Ossip looked to cut off funding for her father’s projects, including the farming business, and took the position that he had no authority to act of behalf of any Stronach Group businesses or have access to corporate funds.

It alleges that “corporate documents were falsified as part of a scheme … to limit or eliminate Frank’s role in running the Stronach family business,” and that there has been a breakdown in the relationship between Belinda and family members because of the repeated breaches of trust.

She has denied the allegations.

“Family relationships within a business can be challenging,” she said in a statement Wednesday night.

“My children and I love my father. However, his allegations are untrue and we will be responding formally to the statement of claim in the normal course of the court process.”

Belinda and her dad Frank chat at the company’s annual general meeting in Markham, Ont., on May 6, 2010. He’s suing his daughter, two grandchildren and others for allegedly mismanaging the family’s assets and trust funds.(Frank Gunn/Canadian Press)

A spokesperson for Ossip said the allegations were “baseless and are not grounded in fact or reality.”

“Alon has always honoured his obligations and acted in good faith to preserve and grow the Stronach family’s assets and to protect the interests of all members of the family,” Paul Deegan said in a statement.

“This is a dispute between Stronach family members that should be resolved between family members.”

A lawyer for Nicole and Frank Walker, the grandchildren named in the suit, disputed the claims.

“Our clients view as regrettable the decision of their grandparents to include them in this action, and consider the claims against them to be unjustified,” said Benjamin Zarnett at Goodmans LLP.

Frank Stronach said in a statement Wednesday that the couple has made “considerable efforts” over the last two years to resolve the matter and filed the lawsuit only as a last resort.

Belinda Stronach was elected as a member of Parliament for Newmarket–Aurora in 2004 as a Conservative under Stephen Harper. In 2005, she famously crossed the floor to join the Liberal party two days before a critical vote for Paul Martin’s minority government. She left politics in 2007 after announcing that she would not seek re-election.

With files from CBC News.

Credits belong to : www.cbc.ca


Check Also

Nestlé, Tim Hortons named Canada’s top plastic polluters

Much of the plastic trash cleaned up from Canadian shorelines by volunteers in September could …