Ontario Court of Appeal upholds dismissal of Catalyst lawsuit

Financier Newton Glassman’s Catalyst Capital Group Inc. has been denied an appeal of a loss it suffered in a lawsuit over the 2014 sale of wireless provider Wind Mobile to rival private equity fund West Face Capital.

Catalyst sought leave to appeal the case – one of a number it filed against West Face and others over Catalyst’s failed bid for Wind – arguing that the judge erred in his decision that its arguments were virtually identical to those in another suit against West Face, which it had lost.

In a decision last year, Justice Glenn Hainey of the Ontario Superior Court ruled that Catalyst’s $1.3-billion suit was “an abuse of process” owing to the similarities to a case against one of its former employees, Brandon Moyse, whom it accused of passing on confidential details of its failed negotiations to West Face. A judge ruled against Catalyst in that case in February, 2018.

On Thursday, Ontario Court of Appeal judges ruled that Justice Hainey’s decision was the correct one, and that “Catalyst’s behaviour exhibits classic signs of re-litigation.”

The heart of Catalyst’s claim was an allegation that confidential details of its own negotiations to acquire Wind were leaked during the summer of 2014, allowing the West Face group to win the deal. However, the court found that Mr. Glassman and his colleagues walked away from Wind after refusing to agree to a break fee of $5-million to $20-million they would pay to Wind’s owners if the deal did not close.

West Face’s consortium acquired Wind for $300-million and sold it 18 months later to Shaw Communications Inc. for $1.6-billion.

Other defendants in the case include former Wind owner VimpelCom Ltd. as well as Globalive Capital Inc., UBS Securities Canada Inc., Tennenbaum Capital Partners LLC, among others.

For its part, Catalyst said it is not ready to concede the case.

“Catalyst is reviewing the decision and will consider its options,” it said in a statement.

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