Kevin McGuigan is pleased to announce that Invictus LLP has taken over the class action lawsuit being advanced in regard to the Genesis investment from 2007, related to the Airdrie and Delacour parcels of land that were acquired for the benefit of those investors.
The general terms of the lawsuit relate to the fact that investors raised approximately $40 million and it was used to acquire two parcels of land for approximately $50 million, so there was a shortfall on the initial subscription. The two properties were subsequently sold and recently Genesis has tried to payout a vendor take back mortgage that it had on title to the one parcel, which will ultimately result in those investors that accept the settlement as receiving $0.235 on the dollar from their original investment. Those that do not take their settlement now will remain part of our claim and will receive a pro-rata portion of our settlement.
The primary argument that is currently being advanced on behalf of our class action group is that the Defendants created an artificial value for the purchase price of the Delacour lands, as defined in the lawsuit. The Delacour parcel was acquired for $14.8 million but was sold to investors for $31.4 million, approximately, based upon agreements for purchase and sale of land, the benefit of which were assigned to the investors. The argument in our lawsuit is that those were not arms length transactions, the amounts in the agreements were not paid, they were not arms length transactions, and thus not the proper values to be used. If the plaintiffs’ arguments are accepted, the additional argument that will be made is that the Defendants will need to account for the lost profits and proceeds that were used to service the debt that was used to cover the shortfall. The argument of the Plaintiffs is the debt shortfall was a result of the price of the Delacour Lands being inflated.
The Plaintiffs’ appraisal expert has provided opinion that the Delacour lands were worth $12.8 million as of the date the lands were to be transferred to the proposed class of investors in our lawsuit. The current payout being offered to investors by the Defendants is entirely predicated upon the investors accepting that the Delacour property was actually worth the $31.4 million that was paid for it originally.
One further piece of information that investors need to consider in regard to whether or not to participate in our lawsuit is that the Delacour lands were eventually sold for approximately $5.8 million, which is the primary reason the settlement currently being offered to investors to close their investment is $0.235 on the dollar.
We have attached an investor participation form to enable those that are interested to participate in our lawsuit and to enable us to have your contact information so that we may email you to provide updates.
We look forward to working with you.