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Frank Stronach sues his daughter Belinda alleging mismanagement of assets and trust funds

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Frank Stronach, the 86-year-old who built global automotive parts empire Magna International from humble beginnings in a Toronto garage, is suing his daughter Belinda and others — including two of his grandchildren — in Ontario Superior Court alleging mismanagement of assets and trust funds.

Frank Stronach and his wife Elfriede are co-plaintiffs in the $520 million lawsuit that names Belinda Stronach, chairman and president of The Stronach Group, Alon Ossip, the CEO of The Stronach Group, grandchildren Nicole Walker and Frank Walker and the Stronach Consulting Corp. as defendants.

In their statement of claim, the Stronachs accuse their daughter and Ossip of “having undertaken a series of covert and unlawful actions” that have been contrary to the best interests of other members of the Stronach family.

Also in the allegations contained in the statement of claim: Belinda Stronach, 52, led an extravagant lifestyle that has drained the company in excess of $70 million, including a new office in Yorkville that cost more than $10 million.

None of the allegations have been proven in court. No statements of defence have been filed.

The Stronachs said in a statement released through their lawyer Wednesday that they “regret having to commence proceedings … against their daughter Belinda, Alon Ossip and others (and) only did so as a last resort, after having made considerable efforts over a period of almost two years to resolve the matters at issue on a consensual basis.”

The Stronachs are also demanding the removal of their daughter and Ossip from positions of power within the business corporation. The Stronachs are seeking a total $520 million in compensation for losses and damages the company suffered over the years, according to the statement of claim. Other accusations in the claim include allegations of breach of contract, fraudulent concealment and unjust enrichment.

Belinda Stronach also released a statement Wednesday.

“Family relationships within a business can be challenging,” she said through spokesperson Greg MacEachern.

“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.”

Ossip spokesperson Paul Deegan said in a statement Wednesday that the allegations against Ossip are “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,” Deegan said.

“Alon created huge wealth for the family, and he has always operated in a prudent and commercially-sensible manner. Frank Stronach was a great auto parts entrepreneur, but his recent excessive spending and numerous failed ventures put his family’s wealth at risk.”

Deegan added “this is a dispute between Stronach family members that should be resolved between family members.”

The Stronachs’ statement of claim alleges that their daughter and others have undertaken actions “to appropriate Stronach family assets for their own personal benefits” to the detriment of the defendants as well as their son Andrew and their granddaughter Selena. These actions are alleged to have occurred in the period between 2011 and 2016, when Frank Stronach had appointed his daughter as the chairman and president of The Stronach Group, the claim says.

“Belinda and Alon have asserted control over The Stronach Group in an oppressive manner, and have taken steps to shut the rest of the Stronach family out of the family’s business,” the claim reads in part, describing a “complete break-down in the relationship” within the family businesses.

“Belinda has appropriated funds from The Stronach Group and has acted in a self-interested manner. She has placed herself repeatedly in situations of potential and actual conflict,” the statement of claim says.

The Austrian-born Stronach came to Canada in 1954, when he was 21. Over the years, he went on to become the largest owner and operator of thoroughbred race tracks in North America. He is also the founder of Magna International, a network of more than 330 auto parts manufacturing operations in 28 countries.

The statement of claims notes that an employment agreement was reached in 2013 to appoint Ossip as the CEO of The Stronach Group, where he would be paid $1 million annually plus “substantial employee benefits and a sizable discretionary bonus.” He was also granted a 5 per cent interest in some assets of the company.

“From virtually the moment this arrangement was entered into, Alon failed to fulfill his most basic obligations as CEO of The Stronach Group. Instead, he breached repeatedly his legal, equitable and fiduciary duties,” the claim says.

Belinda Stronach suspended Ossip from his role as the company’s CEO in 2017, although Frank Stronach — who accused Ossip of inattention and insubordination — wanted him fired, according to allegations contained in the statement of claim. Ossip still maintains positions as a trustee, director and officer of various trusts within the company.

Another twist in the saga of the Stronach family business came near the end of 2013, when Frank Stronach resigned his positions within the company to chase a lifelong dream of becoming a member of parliament in his native Austria. But barely four months after assuming his political post, he resigned and came back to Canada “in order to devote his time, efforts and attention” to the family business, according to the statement of claim.

The Stronachs, in their claim, paint a picture of their daughter and Ossip as less-than-diligent corporate executives over a three-year stretch.

“They routinely failed to report to work for days or weeks at a time in the period from late 2013 to November 2016, and failed or refused to return calls, emails and texts on a timely basis, or at all, including from members of The Stronach Group and from others associated with the various businesses carried on by The Stronach Group,” said the statement of claim.

“Belinda would show up for scheduled meetings hours late, or sometimes not at all. Frank has also become aware that Belinda has hired, and continues to hire, her friends and acquaintances to occupy positions of authority in The Stronach Group that they are unqualified to fulfill,” the statement of claim said.

The statement of claim says Frank Stronach did not take steps to reappoint himself to his previous leadership positions within the company but no one disputed his authority until later in 2016.

In November of 2016, Belinda Stronach and Ossip “informed Frank for the first time that The Stronach Group was facing significant liquidity issues” which “came as a surprise to Frank and raised red flags about their management of The Stronach Group,” according to claims contained in the lawsuit. Around that time is when Stronach’s daughter and Ossip informed him he “had no signing authority or ability to access corporate funds” since the date of his resignation in 2013, according to the lawsuit.

“Alon belittled and embarrassed Frank, and did so with the blessing and encouragement of Belinda,” the Stronachs say in their statement of claim. “Belinda and Alon made clear to Frank, Elfriede and employees of The Stronach Group that they intended to exert control over the organization, and to eliminate Frank’s role in the family enterprise that he had created and funded,” the claim says.

Mary Ormsby is a reporter and feature writer based in Toronto. Reach her via email: mormsby@thestar.ca

Gilbert Ngabo is a breaking news reporter based in Toronto. Follow him on Twitter: @dugilbo

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Snell, deGrom earn 1st career Cy Young awards

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After a season marred by narrow defeats, Jacob deGrom became a runaway winner.

The New York Mets ace easily won the National League Cy Young Award on Wednesday night, a reward for a historically fruitless season in Flushing. The right-hander won just 10 games, the fewest ever by a Cy Young-winning starter.

DeGrom easily beat out Washington's Max Scherzer, who was seeking a third straight Cy Young and fourth overall. DeGrom got 29 first-place votes and 207 points from members of the Baseball Writers' Association of America. Scherzer had the other first-place vote.

Blake Snell of the Tampa Bay Rays narrowly beat out past winners Justin Verlander and Corey Kluber for his first AL Cy Young after leading the majors with 21 victories.

In his first season after chopping off his distinctive long hair, deGrom cut down hitters from start to finish despite little help from teammates. He had a 1.70 ERA, the lowest in the NL since Zack Greinke's 1.66 mark in 2015. Yet the 30-year-old right-hander went 10-9, eclipsing the low bar among starters set by Seattle's Felix Hernandez when he took the award with 13 victories in 2010.

DeGrom allowed three runs or fewer in 29 consecutive starts to close the season, breaking Leslie "King" Cole's 108-year-old record of 26 such outings. Yet the Mets were 11-18 in those games and 14-18 overall with deGrom on the mound.

"My thought process was, `Hey, take the ball every fifth day and continue to try to put this team in position to win and control what you can control,"' deGrom said.

Shift in voting

Hernandez's Cy Young victory signaled a major shift from voters, who once prioritized pitcher wins. The push toward advanced analytics made deGrom's candidacy possible, and by September there was little debate deGrom was worthy, even as the Mets regularly wasted his dominance.

Perhaps no pitcher had ever been such a hard-luck loser. New York averaged 3.5 runs in games started by deGrom, second only to Cole Hamels for worst support in the majors among qualified pitchers. During one stretch late in the season, the Mets totaled 10 runs over seven of deGrom's outings, and four of those were driven in by the pitcher himself.

DeGrom nearly produced more wins above replacement than actual wins — a dubious sabermetric feat that has only been accomplished once, when the Philadelphia Athletics' Eddie Smith went 4-17 with 4.1 WAR in 1937. Baseball-Reference calculated deGrom for 9.6 WAR.

The 2014 NL Rookie of the Year, he became the seventh rookie winner voted a Cy Young, joining fellow Mets Tom Seaver and Dwight Gooden. R.A. Dickey was the only other Met to win a Cy Young.

Snell got 17 first-place votes and 169 points to 13 first-place votes and 154 points for Verlander. Kluber had 71 points, followed by Boston's Chris Sale and Houston's Gerrit Cole.

Snell led the AL with a 1.89 ERA. The 25-year-old pitched just 180 2/3 innings, 33 1/3 fewer than Verlander, but his dominance was enough to sway the electorate.

Snellzilla

The lefty nicknamed Snellzilla wreaked havoc against the AL's top lineups. He was 3-0 with a 1.08 ERA in four starts against the World Series champion Red Sox, and 2-0 in two starts each against the Astros and Indians. The Yankees roughed Snell up twice, but he got threw five scoreless innings in a victory Aug. 16. That came during a late-season run of nine consecutive wins for Snell, including a victory against every team in the AL East.

Snell was the first player 25-or-younger to win 21 games since Barry Zito in 2002. He was highly regarded as a minor leaguer for his electric arsenal, but subpar control led to struggles during his first two major league seasons. He was even demoted to Triple-A for a month in 2017.

It all came together this year. Snell was a stalwart for a most unusual pitching staff, taking the ball every fifth day while manager Kevin Cash successfully experimented with reliever "openers" to start games in between. Snell led the Rays with 31 starts, and no other traditional starter had more than 17. After longtime franchise ace Chris Archer was traded to the Pirates on July 31, Snell went 9-0 with a 1.17 ERA.

"I felt with the opener, I had a bigger role on the team," Snell said.

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Casey returns to Toronto with head held high

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TORONTO – Dwane Casey isn’t quite sure whether he’ll be cheered or booed by the Raptors faithful when he makes his much-anticipated return to the building and city he spent seven years in on Wednesday evening, or so he says.

It seems crazy to think anyone would want to boo the man after all he’s meant and will forever mean to the franchise, but Casey was around long enough to see plenty of former cornerstones return to hostile receptions.

He saw Vince Carter come back and get booed. He saw Tracy McGrady get booed. Chris Bosh, Andrea Bargnani…the list goes on. Sports fans can be a fickle bunch and Raptors supporters have had a lot to gripe about over the years, especially early in Casey’s tenure.

When Casey first took over as Toronto’s head coach, back in the lockout-shortened 2011-12 campaign, the team was coming off a dreadful 22-win season. They were one of the NBA’s favourite punch lines. Every star they had ever employed skipped town. The guys who stayed did so reluctantly. And so it went, until things turned.

Casey was one of the biggest reasons why it turned.

No, Casey will not become a member of that aforementioned, ill-fated club of booed former Raptors. Thanks in large part to his efforts, Toronto fans now have plenty to cheer about and the reception he gets on Wednesday will certainly reflect that.

“I’m not going to get emotional,” said Casey, the morning of his return. “I’ll appreciate it. I’ll really absorb whatever comes my way, the boos or the cheers, but not to the point where I’m going to cry or anything like that. I wouldn’t live it down.”

The Raptors will host Casey’s Detroit Pistons just over six months after firing their long-time head coach. It’s been a bizarre half-year for both parties – eventful and emotional – but here they are in the same place again, but on different paths.

Toronto is off to a league-best 12-2 start with its new coach – Casey’s former assistant, Nick Nurse – and its new superstar, Kawhi Leonard. Meanwhile, Casey has landed on his feet in Detroit. He’s the first of eight ex-Raptors head coaches to part ways with the team and immediately land another head coaching gig.

Casey’s return should bring back plenty of memories. Forever intertwined in basketball lore, the 61-year-old coach and his long-time franchise have been through a lot together.

The winningest coach in team history, Casey led the Raptors to the playoffs in five straight years, setting franchise records for regular-season victories in four of them. He took them further than they’ve been before – the Eastern Conference Finals back in 2015-16 – and oversaw the growth and development of several players, including all-stars Kyle Lowry and DeMar DeRozan.

Those accomplishments will be highlighted in a tribute video the Raptors are planning to run for Casey during the first timeout of Wednesday’s game. Even if he’s successful in keeping it cool, that should be a special moment for the basketball lifer.

“You wouldn’t be human if I stood here and said it wouldn’t be touching,” Casey admitted. “I left a lot of blood, sweat and tears here. I left here with my head high and did what I was asked to do. I know revisionist history and everyone wants to take credit for the wins and the losses [are] an orphan. I’ll take all the losses, but I know what we started with, how it was built, what was built and how it got there. I take total pride in that.”

As you would expect from one of the classiest men in the business, Casey was diplomatic when referencing his unceremonious dismissal, which was almost unprecedented in professional sports.

Coming off a franchise record 59-win regular season and first-place finish, things went south in a hurry after the Raptors were swept out of the second-round of the playoffs for the second year in a row. Casey was fired and, a month later, accepted the NBA’s Coach of the Year award as a member of a different organization. If the vibe around Wednesday’s game is a bit awkward it’s because this whole situation has been a bit awkward.

The NBA is a business. We’re reminded of it regularly. Players, coaches, execs, they’ll all tell us – and probably themselves – it’s a business, but it’s also their lives. People get fired or they get traded from places they feel a strong connection to and it’s only natural to take things personally. Feelings get hurt, and that was what happened over the summer.

In many ways, Oct. 17 was an important day for Casey and for the Raptors. It was Game 1, the start of the regular season, and a chance to put the past behind them and play basketball again. Suddenly, wins and losses were all that mattered, not who was talking to whom and who wasn’t.

For at least one night, some of the uneasiness has returned. Questions about whether Casey and Raptors president Masai Ujiri split on amicable terms or why there seems to be tension between Casey and Nurse – former colleagues and friends – have resurfaced. It’s an inescapable narrative, but also a temporary one.

Shortly after Casey’s first trip back is in the books, the Raptors will begin to prepare for Friday’s big game in Boston and their former coach will head back to Detroit with his new team. The events that led to their breakup won’t seem so important, but the legacy Casey leaves in Toronto isn’t going anywhere.

“I’m a big boy,” Casey said. “I feel good knowing I left something here in Canada that was positive and good and it wasn’t negative and bad. Getting fired is not a negative… I have no ill will for anybody. I understand what happened, how it happened. I don’t know why it happened, but I understand it.”

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Game of Throws: Sitting out season a financial play by Bell, forces Steelers hand

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Le’Veon Bell will not play for the Pittsburgh Steelers this season.

At this point, it’s more likely that he will never suit up for the black and yellow ever again.

Greer not surprised by Bell’s decision based on what happened to Thomas

TSN NFL analyst Jabari Greer explains why he isn’t surprised that Le’Veon Bell is willing to sit out the entire season, pointing out what happened to Earl Thomas earlier this season as the main reason. Greer also explains why James Conner’s emergence has made the decision easier for the Steelers to accept.

While the football world watched and waited in anticipation of Tuesday’s 4 p.m. ET deadline for the All-Pro running back to sign his franchise tender, Bell remained comfortable with the decision he had made in the days and months leading up to Nov. 13.

The truth is that by the time the final hours of the deadline approached, the decision wasn’t nearly as difficult for Bell as it was made out to be.

The only reason it seemed that way is because the majority of those reporters covering the NFL weren’t aware of the potential loophole in the league’s collective bargaining agreement that actually strengthened Bell’s negotiation position.

Bell’s decision to sit out for the entire season essentially forces the Steelers hand.

Pittsburgh is left with three options in accordance with the CBA.

The first option is to give Bell the transition tag and allow him to negotiate a new deal with another team.

The second option is the two sides negotiate a long-term extension. However, the Steelers have already refused to budge on contract talks with Bell despite the threat of him sitting out for an entire season, so it’s hard to imagine their position changes. Remember, Bell was already offered a $70-million extension that he turned down this past off-season.

The third and final option for Pittsburgh is to offer Bell another franchise tender. This is where things get interesting. According to the CBA, the fact that Bell sat out an entire season would push him in to a category that defines him as a “Franchise Player for the League Year following the League Year in which he does not play.”

This designation means that rather than playing under a franchise tag that pays him $14.5 million like the one the Steelers offered him this season, Bell would be eligible for a franchise tag that pays him the “average of the five largest Prior Year salaries for players at the position with the highest such average.”

Essentially, in order to offer Bell another franchise tender, Pittsburgh would have to pay him under the same rules applied to franchise tags for the quarterback position, which is the “position with the highest such average.” That franchise tender would be more than $25 million.

In summary, the Steelers could negotiate with Bell under his terms and sign him to a long-term extension, let him walk and sign with another team, or pay him more than $25 million to play in Pittsburgh next season.

Pittsburgh can’t afford to offer Bell the franchise tag he’s now eligible to receive. They also can’t afford to pay him the money he wants on a long-term deal.

That leaves the Steelers with one viable option: Let him walk.

As for Bell, the decision must have been an easy one from a financial perspective once the loophole in the CBA was discovered.

The three-time Pro Bowl running back passed on $14.5 million to play this season in exchange for guaranteeing his health and the opportunity to negotiate the long-term contract he wanted from the Steelers with another team.

How much money can Bell expect to be offered when he hits the open market?

A lot more than the $14.5 million he turned down.

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