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Catalyst v West Face
CourtOntario Superior Court of Justice
Full case name Stephen Boissoin and the Concerned Christian Coalition Inc. v Darren Lund
DecidedJune 17, 2021 (2021-06-17)
CitationsCatylist v West Face, 2021 OSCJ
Case history
Prior actionOntario Superior Court of Justice ruled Catylist violated
Case opinions
Appeal dismissed; decision of the lower court upheld.

Catalyst v West Face' is a multi-pronged, multi-year legal battle between Catalyst Capital Group and West Face Capital, two Toronto, Canada-based private equity firms that was first filed in 2016.

Background

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Newton Glassman is a businessman and a lawyer.[1]

Catalyst Capital Group is a CAD$6 billion investment firm established in Toronto in 1992 by Newton Glassman, who owns and operates Catalyst.


Glassman established Callidus distressed debt-lending subsidiary, Callidus Capital Corp

West Face is a private equity firm owned by

The Netherlands-based VimpelCom Ltd. company owned shares of Globallive Wireless Management Corporation which operated as Wind Mobile, a Canadian startup wireless provider.

The two companies Catalyst and West Face are "ferociously competitive", according to a 2017 National Post article.[2]

Syria-based Psy-Group was established in was shut down in 2018.

Black Cube was established in x

Wind Action and Moyse action

In 2014, Catalyst was in negotiations to purchase Netherlands-based VimpelCom Ltd.'s shares of Globallive Wireless Management Corporation which operated as Wind Mobile, a Canadian startup wireless provider.

The Catalyst Capital Group Inc. v. Brandon Moyse and West Face Capital Inc. The lawsuit was filed on June 25, 2014 after Moyse was hired by West Face and prior to the acquisition of Wind by West Face
Moyse Action

In June 2014, one of Catalyst's former junior analysts, Brandon Moyse, was hired by West Face.[Court documents 1]

Wind Action

A consortium of buyers led by West Face submitted a competing bid in September 2014, and successfully acquired Wind for $300-million in 2014. In February 2016, West Face sold Wind to Shaw Communications for $1.6 billion.[3]

Callidus re
Wollf pack action 2014-2015

In 2014 and early 2015, West Face and Veritas Investment Research Corp produced reports that were critical of Callidus. West Face sold its shares in Callidus "In 2015, short sellers took a run at the Callidus following critical research reports from hedge fund West Face Capital Inc. and Veritas Investment Research Corp. Callidus subsequently sued both firms and that litigation is ongoing."" citation?

Catalyst v West Face May 2016 Second lawsuit filed by Catalyst against West Face (The case was dismissed in the Court of Appeal upheld by Mr. Justice Hainey in April 2018.[4]
Catalyst v West Face June 2016 Wind Action and Moyse Action

In June 2016, Catalyst filed a lawsuit alleging that Moyse had provided West Face with confidential insider information related to the Wind bidding process.[Court documents 1] Catalyst filed a lawsuit against the Netherlands-based-VimpelCom Ltd., the former owners of Wind Mobile for $750M over alleged conspiracy and breach of contract.[Court documents 1][5] and against West Face for the alleged use of insider information in its acquisition of WIND Mobile.[2] Catalyst alleged that Moyse had provided West Face with confidential insider information that placed West Face at an advantage, and resulted in their purchase of Wind Mobile from VimpelCom Ltd.[5]

Wolf Pack

On August 9, 2017 Catalyst added the Wolf Pack conspiracy to its list of charges against West Face and others.[Court documents 2]"Cout filing" (PDF), Ontario Superior Court of Justice Commercial List, Catalyst and Callidus v. West Face, no. CV-17-587463-00CL, August 12, 2020, retrieved March 27, 2021</ref>

Catalyst v West Face August 18, 2016

In his August 18, 2016 Ontario Superior Court of Justice decision, Justice Frank Newbould ruled against Catalyst in favor of West Face.[6][2] Newbould dismissed Catalyst's claims in their entirety and found that claims against VimpelCom Action and Moyse were groundless.[7] He also said that Catalyst's owner, Newton Glassman was "aggressive," "argumentative" and "considerably difficult."[3] On September 13, 2016 Catalyst submitted an appeal.[3] On October 7, 2021, Justice Newbould awarded West Face $1,239,965 saying that Glassman was playing hardball because he had lost the opportunity to acquire Wind.[7]

Callidus

By 2017, Callidus was involved in a lawsuit and counter lawsuit involving a former executive Callidus, who worked there from 2008 to 2016.[8] was investigated by Ontario Securities Commission (OSC) and in response revised the way in which they reports financial results to investors of its "$1-billion loan portfolio".[8]

In Q1 2017, Callidus reported a loss of "$3.5-million on revenues of $36.4-million".[8] As a result of the Ontario Securities Commission (OSC) continuous disclosure review, Callidas announced that it was revising the way in which they reported financial results to investors of its "$1-billion loan portfolio" in the fiscal year 2015 and 2016.[8]

Callidus is controlled by private-equity fund Catalyst Capital Group Inc., which has approximately $5-billion in assets under management and was founded by Mr. Glassman in 2002. Callidus was spun out as a public company in 2014 and is no stranger to controversy.

The Wolfpack controversy

The Wall Street Journal published an article on August 9, 2017, reporting on complaints against Catalyst related to one of its subsidiaries, Callidus Capital, that had been filed with the Ontario Securities Commission (OSC).[9]

Psy-Group and Black Cube September 2017

According to court documents, on September 26 and 27, 2017, Catalyst hired Psy Group and Black Cube.[7] ???

The Newbould sting

On September 18, 2017 a "Black Cube operative"[10] posing as a "potential client" who self-identified as an executive director of London-UK-based Victorius Group, Hugo Gabriel Saavedra Rodriguez, emailed to make an appointment with Newbould at his office in Toronto and later that evening at the chic Toronto restaurant Scaramouche. Newbould was taped surreptitiously at the two meetings and photographed at the second.[2] The agent, "Rodriguez", "apparently tried to induce [Newbould], in vain, to make anti-Semitic remarks".[2] On September 21, Virginia Jamieson,[7][6] gave the widely-respected, veteran National Post journalist, Christie Blatchford a USB flash drive which contained photographs and seemingly edited recordings of the two meetings with Newbould.[2] On September 25, Catalyst attorneys, Brian Greenspan and David Moore met at the Court seeking an adjournment to the September 26 appeal.[2] In her November 25, 2017 exclusive report in the Post, entitled "The judge, the sting, Black Cube and me", Blatchford reported that "Black Cube had tried to entrap Newbould on behalf of Catalyst Capital Group Inc., a $4.3 billion private equity firm in Toronto that was founded by Newton Glassman, who is Jewish."[6] Catalyst denied the allegations.[6]

Countersuit

According to the complaint, former Israeli television journalist Emmanuel Rosen—who was allegedly working with Psy-Group—along with Brooklyn-based public relations professional Virginia Jamieson engaged in a sting operation on then 74-year-old Newbould, in order to plant "highly negative media coverage" against him. Newbould had retired from the Ontario Superior Court of Justice in June 2017.[2][11] On September 18, 2017 a "Black Cube operative"[10] posing as a "potential client" who self-identified as an executive director of London-UK-based Victorius Group, Hugo Gabriel Saavedra Rodriguez, emailed to make an appointment with Newbould at his office in Toronto and later that evening at the chic Toronto restaurant Scaramouche. Newbould was taped surreptitiously at the two meetings and photographed at the second.[2] The agent, "Rodriguez", "apparently tried to induce [Newbould], in vain, to make anti-Semitic remarks".[2]

Catalyst hired Tamara Global in 2017

The Globe reported that in 2017, Catalyst had hired Tamara Global, a security company to prepare for the appeal of Newbould's 2016 Ontario Superior Court decision. Black Cube operatives also hired Tamara as subcontractors.[10]

The Newbould sting, Black Cube Virginia Jamieson September 2017

On September 21, 2017 Virginia Jamieson,[Court documents 1][6] gave the widely-respected, veteran National Post journalist, Christie Blatchford a USB flash drive which contained photographs and seemingly edited recordings of the two meetings with Newbould.[2]

Catalyst v West Face 2017 new attorneys

On September 25, 2017, Catalyst attorneys, Brian Greenspan and David Moore met at the Court seeking an adjournment to the September 26 appeal.[2]

The Newbould sting, Black Cube Virginia Jamieson November 2017

In her November 25, 2017 exclusive report in the Post, entitled "The judge, the sting, Black Cube and me", Blatchford reported that "Black Cube had tried to entrap Newbould on behalf of Catalyst Capital Group Inc., a $4.3 billion private equity firm in Toronto that was founded by Newton Glassman, who is Jewish."[6] Catalyst denied the allegations.[6]

Catalyst v West Face November 2017 new attorneys Catalyst's $450-million lawsuit on Wolf Pack action including journalists

In November 7, 2017, Catalyst filed a $450-million lawsuit against West Face, Anson Group Canada, Bruce Livesey, [[Reuters], the Wall Street Journal, and others, alleging that they had conspired to portray Catalyst, Callidus or Glassman in a negative light in what they called the "Wolf Pack Conspiracy", referencing the recent growth of activist shareholders working in tandem.[12] claimed that the "conspirators" had "spread rumours" about OSC whistleblowers, an OSC investigation, and another by the Toronto Police, to devalue Callidus and to short its shares. West Face, the WSJ, and others denied the allegations.[13] Callidus Capital whose majority shareholder is Catalyst, said the allegations were false. Catalyst filed a lawsuit against the two reporters on November 7, 2017.Cite error: The <ref> tag has too many names (see the help page). Catalyst entered an email into court documents, allegedly from a "Vincent Hanna", the name of a fiction character in the 1995 file Heat, cautioning Catalyst they they were the victim of a cabal led by West Face and others. The emailed warned Catalyst that the cabal which include the Wall Street Journal, were using private investigators.[7]

Catalyst v West Face December 29, 2017 filed a $550 million counterclaim cited Black Cube sting

On December 29, 2017, West Face filed a $550 million counterclaim, claiming that Catalyst "utilized unlawful means in carrying out their agreed upon campaign of vilification, defamation and harassment."[6]

Catalyst v West Face Ontario Court of Appeals Justice Glenn Hainey upheld Newbould's ruling February 21, 2018,

On February 21, 2018, in the Ontario Court of Appeals Justice Glenn Hainey upheld Newbould's ruling against Catalyst in their C$1.3 billion lawsuit "against West Face over the acquisition and subsequent sale of Canadian wireless carrier Wind Mobile was "an abuse of process" because it was similar in nature to a previous lawsuit that Catalyst had filed against West Face and Brandon Moyse, a former Catalyst employee who quit to work for the rival firm".[14] This included a dismissal of charges against Moyse.[Court documents 1]

Catalyst v West Face March 19, 2018

In a March 19, 2018 letter to their investors, Catalyst said that they had new evidence in their case against West Face.[Court documents 1]

Catalyst v West Face cited this March 23, 2018 lengthy and detailed special report by Reuters in their Wolf Pack lawsuit.[15] The negative report was denied by Catalyst. In paragraph 177 on their claim against Livesey, they said that Livesey had "made efforts" to have four articles published in the media, including the special March 23, 2018 Reuters' report entitled "Private equity star's picks shine, until cash-out time".[15] In his statement of defense, Livesey denied writing the articles and any involvement in their "writing or publication".


media coverage June 3, 2018 Psy-Group and Black Cube's operations against West Face

A 2018 article described in detail Psy-Group and Black Cube's operations against West Face and others.[16]

Catalyst v West Face West Face counterclaim re
defamation

In their November 21, 2018 counterclaim, West Face said the campaign against them had also included defamatory press releases, online blog posts, tweets, and videos against West Face and its executives, using information gathered or manufactured by the Israeli companies and Rosen, using aliases including "Samantha Beth," "Alex Walker," "Jordan Brown," and "Judge Frank Newbould."[16][Court documents 3]

Catalyst v West Face West Face counterclaim re
defamation

According to the November 21, 2018 complaint, Psy-Group and Black Cube, publishing defamatory articles and social media posts about West Face and using sophisticated masking techniques to hide their tracks. West Face learned of Black Cube and Psy-Group's activities when its employees recognized the image of Stella Penn Pechanac in news reports about rape and harassment accusations against Hollywood mogul Harvey Weinstein. Pechanac was a Black Cube employee who reportedly posed as a woman's rights activist and who befriended actress Rose McGowan in a bid to gather intelligence on behalf of Weinstein. Employees of West Face recognized Pechanac as the same woman who had reached out to them.[17][Court documents 3]

Catalyst v West Face West Face 40 parties involved

By 2021, there were forty parties directly or indirectly involved the suits and countersuits.[10]

New York Times January 28, 2019 private spies including

According to a January 28, 2019 New York Times article, the "phenomenon of private spies drew widespread attention in 2017, when Black Cube was linked to the Harvey Weinstein affair. The Times reported on a number of incidents involving Black Cube and Psy-Group, including a sting operation and defamation campaign against West Face.[17][18]

Callidus shares fell June 19, 2019

By June 19, 2019, "Callidus’s share price has fallen by nearly 97 percent since its IPO, following two straight years of losses totaling C$400 million ($299 million)."[19]

Catalyst and Callidus v. West Face August 20, 2020 response to West Face's Anti-SLAPP suit

In August 20, 2020, in Catalyst and Callidus v. West Face, there was a response made to the Anti-SLAPP filed by West Face.[Court documents 4]

Catalyst and Callidus v. West Face March 2021 Ontario Superior Court Justice, Cary Boswell, rejected Catalyst and Black Cube's to seal records re Black Cube and Psy-Group agents

In the third week in March 2021, an Ontario Superior Court Justice, Cary Boswell, rejected Catalyst and Black Cube's requests to seal records to protect undercover agents. Details in the records will become "part of the public record".[10]

Catalyst and Callidus v. West Face March 27 litigation continued

By March 27, litigation between Catalyst and West Face continued.[10] Court documents allege that Psy-Group worked with Black Cube on operations to "discredit West Face Capital and to 'indirectly' discredit Newbould."[10] An email correspondence between Black Cube and Psy-Group agents said that, "Basically we’re trying to prove that he’s a racist, a depraved anti-Semite, and trying to find information that could paint him in as negative a light as possible."[10] According to a March 26, 2021 Globe and Mail article on the March 2021 Ontario Superior Court trial in Catalyst v. West Face, that made relevant documents public, operatives working for Psy-Group and the Tel Aviv, Israel-based Black Cube are said to be "former members of the Israeli Defence Forces and the Mossad, the intelligence branch of the Israeli Defence Forces."[10]

Catalyst paid up to US$11-million to Black Cube

Court papers also revealed that "Catalyst was the party ultimately paying Black Cube's fees, which included a "US$1.5-million base fee, and up to US$11-million in total, after potential bonuses".[10] Catalyst claimed that they were unaware of how "the sting operations were being conducted."[10]

A March 26, 2021 Globe and Mail article revealed that Catalyst had offered to pay Black Cube up to $11-million for their sting operation on Justice Frank Newbould, who was retired at the time of the operation.[10][10]

See also

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References

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  1. ^ "Statement of Bruce Livesey". Catalyst v West Face. Toronto, Ontario. September 21, 2018.
  2. ^ a b c d e f g h i j k l Blatchford, Christie (November 25, 2017). "Exclusive: The judge, the sting, Black Cube and me". National Post. Retrieved March 27, 2021.
  3. ^ a b c Jackson, Emily (September 14, 2016). "Catalyst Capital Group Inc. appeals ruling over Wind Mobile dealings". Financial Post. Retrieved March 27, 2021.
  4. ^ Inc, West Face Capital (May 2, 2019). "Appeal Court Upholds Dismissal of Abusive Catalyst Lawsuit". Toronto, Ontario. Retrieved March 29, 2021. {{cite news}}: |last= has generic name (help)
  5. ^ a b "Catalyst Capital sues former Wind Mobile owners for $750M over alleged conspiracy, breach of contract". Financial Post. June 1, 2016. Retrieved April 18, 2020.
  6. ^ a b c d e f g h Livesey, Bruce; Boyd, Roddy. "Newton Glassman's Legacy of Ashes April 11, 2018". The Foundation for Financial Journalism. Retrieved March 27, 2021.
  7. ^ a b c d e Cite error: The named reference CatalystVWestFace_20200529 was invoked but never defined (see the help page).
  8. ^ a b c d Willis, Andrew (May 4, 2017). "Callidus revises reporting after OSC review". The Globe and Mail. Retrieved March 28, 2021.
  9. ^ McNish, Rob; Copeland, Jacquie (August 9, 2017). "Canadian Private-Equity Giant Catalyst Accused of Fraud by Whistleblowers". Wall Street Journal. ISSN 0099-9660. Retrieved March 28, 2021.
  10. ^ a b c d e f g h i j k l m Kildaze 2021.
  11. ^ Weinglass, Simona; Horovitz, David; Ahren, Raphael. "Israeli firm under FBI scrutiny in Trump probe allegedly targeted BDS activists". www.timesofisrael.com. Retrieved 2019-06-06.
  12. ^ Lu, Carmen X. W. (2016). "Unpacking Wolf Packs". Yale Law Journal. 125: 12.
  13. ^ Shecter, Barbara (November 8, 2017). "Catalyst Capital files $450-million lawsuit accusing Anson Funds, West Face of short-selling 'conspiracy'". Financial Post. Retrieved March 28, 2021.
  14. ^ Cantrell, Amanda (May 3, 2019). "Court Blasts Private Equity Firm Over 'Abuse of Process'". Institutional Investor. Retrieved March 28, 2021.
  15. ^ a b Tilak, Lawrence; Delevingne, John (March 23, 2018). "Private equity star's picks shine, until cash-out time". Reuters. Special Report. Retrieved March 29, 2021.
  16. ^ a b Ganon, Tomer; Hirschauge, Orr (June 3, 2018). "Tactics of Israeli Psy-Group, Black Cube Revealed in Canadian Court Battle". Calcalist. Tel Aviv, Israel. Retrieved March 27, 2021.
  17. ^ a b Bergman, Ronen; Shane, Scott (January 28, 2019). "The Case of the Bumbling Spy: A Watchdog Group Gets Him on Camera". The New York Times. ISSN 0362-4331. Retrieved March 27, 2021.
  18. ^ Ganon, Tomer; Hirschauge, Orr (October 9, 2018). "Psy-Group CEO Touted Company's Ability to "Change Public Discourse" on a National Level". Calcalist. Tel Aviv, Israel. Retrieved March 27, 2021.
  19. ^ Cantrell, Amanda (2019-06-18). "Online Attackers Called Us 'Canada's Madoff,' Lawsuit Alleges June 18, 2019". Institutional Investor. Retrieved 2021-03-29.

Bibliography

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Court documents

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  1. ^ a b c d e f "Court filing reply and counterclaim" (PDF), Ontario Superior Court of Justice Commercial List, Catalyst and Callidus v. West Face, no. CV-17-587463-00CL, p. 357, May 29, 2020, retrieved March 27, 2021
  2. ^ Cite error: The named reference CatalystVWestFace_20200812 was invoked but never defined (see the help page).
  3. ^ a b "Court filing reply and counterclaim" (PDF), Ontario Superior Court of Justice Commercial List, Catalyst and Callidus v. West Face, vol. CV-17-586096, no. CV-17-587463-00CL, November 21, 2018, retrieved March 27, 2021
  4. ^ "Anti-SLAPP: Court filing reply and counterclaim" (PDF), Ontario Superior Court of Justice Commercial List, Catalyst and Callidus v. West Face, no. CV-17-587463-00CL, August 20, 2020, retrieved March 27, 2021
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[[Category:2021 in Canadian case law [[Category:2021 in Ontario] [[Category:Ontario case law [[Category:Private intelligence agencies [[Category:Private detectives and investigators

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