The financial arm of the Łútsël K’é Dene First Nation is seeking a court order that would force its former business partner to file reports related to the bankrupt fuel transportation company they both owned.
This decision is the latest in a multi-year court battle. In May 2017, the Denesoline Corporation sued the Tłı̨chǫ Investment Corporation – the commercial arm of the Tłı̨chǫ government – claiming that nepotism and mismanagement led to the financial failure of trucking company Ventures West.
In court documents at the time, Denesoline alleged that the Tłı̨chǫ were operating the business as a “personal fiefdom” by appointing relatives and friends of the Tłı̨chǫ chiefs to managerial positions for which they were not qualified, then by paying them “exorbitant” wages.
Denesoline also claimed that the Tłı̨chǫ company did not pay $ 373,333 in dividends and withheld financial information about the company to which Denesoline was entitled.
In response, the Tłı̨chǫ described the allegations as “totally unfounded, totally inappropriate, frivolous” and “for the sole purpose of attempting to embarrass the Tłı̨chǫ defendants as a means of exerting pressure for a settlement”. The Tłı̨chǫ said the dividend payment was not made as it would have hampered Ventures West’s ability to meet its working capital commitments.
At the time, the Denesoline Corporation asked the court to order the Tłı̨chǫ to pay the $ 373,333 plus $ 500,000 in damages. He also wanted the Tłı̨chǫ company – which owned 90% of Ventures West – to buy the remaining 10% owned by Denesoline.
Since then, court documents indicate that the Tłı̨chǫ company handed over the financial statements relating to Ventures West and paid the Denesoline Corporation its share of the outstanding dividends in October 2018.
But the legal battle continues.
“The dividend is a part of a much, much bigger puzzle,” Denesoline attorney Tess Layton told Cabin Radio, noting that the company had to take legal action to get the money.
“The other concern, from Denesoline’s perspective, is that the damage goes way beyond the dividend – because what was once a profitable business is now a bankrupt business, according to what they claim to be. nepotism and mismanagement. ”
At the end of 2019, after years of financial loss, Ventures West and Tłı̨chǫ Landtran – a 100% Tłı̨chǫ-owned transport company – filed for creditor protection.
In court documents, Mark Brajer, the current managing director of the Tłı̨chǫ Investment Corporation, said the loss of a contract with the Diavik diamond mine, which accounted for 60% of Ventures West’s fuel transportation business, was partly to blame. He said the Tłı̨chǫ could not lower their bid for the contract while making a profit.
That year, Chief Tłı̨chǫ’s executive council commissioned two financial reports, one on the Tłı̨chǫ Investment Corporation and the other on Ventures West.
The Denesoline Corporation now wants access to these reports, saying they may contain information relating to allegations of mismanagement and nepotism. The company also wants Brajer to answer questions about why the former managing director and chairman of the company Tłı̨chǫ resigned in 2019 and whether there were any concerns about the leadership of the company.
“Without this information, we cannot move forward,” Layton said.
“Denesoline’s ultimate goal is to uncover the reason for Ventures West’s financial decline.”
However, a lawyer for the Tłı̨chǫ company argued in court proceedings that the Tłı̨chǫ company report excluded information about Ventures West and was irrelevant to the trial.
This lawyer also objected to questions regarding the relationship or management of Tłı̨chǫ beyond their management of Ventures West.
Brajer did not respond to a request for comment.