Judge rejects Nygard bid to use money from firms in receivership to pay criminal case lawyers

A Manitoba choose has rejected a request by disgraced style mogul Peter Nygard to make use of cash from his firms at present in receivership to pay his felony defence legal professionals. 

Nygard is interesting the choice.

9 Nygard firms have been underneath court-appointed receivership since March 18, 2020. 

Latest paperwork filed within the case present since that point the receiver, Richter Advisory Group Inc., took in additional than $121 million and paid out greater than $42 million to clear up firm money owed. 

The courtroom data present as of Might 2021, $12.8 million stays after the sale of firm property.

Courtroom filings additionally point out the Nygard firms owe $3 million to the Canada Income Company, though the courtroom has not but licensed that fee

Courtroom data filed between December 2021 and March 2022 present Nygard needs to make use of $1.15 million from the $10 million being held in belief by the receiver to pay for authorized charges.

The $10 million consists of the proceeds of Nygard’s Falcon Lake Cottage, a property that was not a part of the receivership.

For the reason that begin of the receivership, Manitoba Courtroom of Queen’s Bench Justice James Edmond accepted the sale of 4 properties owned by the Nygard firms on Broadway, Notre Dame Avenue and on Inkster Boulevard, in addition to the corporate’s Toronto headquarters.

He additionally accepted the liquidation of style merchandise, furnishings and fixings from Nygard retail shops.

Nygard, 81, is at present being held in a Toronto jail awaiting trial for sexual assault and forcible confinement on allegations courting again 40 years.

Final December, Nygard’s legal professionals filed a discover of movement within the receivership asking a choose to authorize the distribution of $1.15 million from the online receivership proceeds to Nygard Properties Ltd. (NPL) for “fee of sure authorized charges incurred, or to be incurred, by Peter J. Nygard personally in reference to the defence of sure felony costs laid” by the Toronto Police Service and the request for his extradition to the USA for varied costs regarding intercourse trafficking.

The courtroom filings break down how that cash, totalling $500,000, could be spent:

• $350,000 to Toronto felony defence lawyer Brian Greenspan.
• $50,000 to Jeff Hartman who focuses on jail legislation in Toronto.
• $50,000 to Winnipeg lawyer Richard Wolson.
• $50,000 to Nygard’s longtime Winnipeg lawyer Jay Prober. 

The courtroom data say the remainder of the cash would go to his insolvency legal professionals:

• $250,000 to Fred Tayar and Associates.
• $350,000 to Levene Tadman.
• $50,000 to Albert Gelman Inc.

“It’s the place of NPL that as a result of Peter Nygard is the last word proprietor of NPL, it’s in NPL’s finest pursuits that Peter Nygard be acquitted,” Nygard lawyer Wayne Onchulenko wrote in a January movement temporary.

“If Peter Nygard is convicted, NPL’s property would doubtless be used to pay a judgment obtained by anybody who’s profitable within the prosecution of a civil declare after a profitable felony prosecution in opposition to Peter Nygard,” Onchulenko wrote.

The courtroom filings say the Toronto allegations are mentioned to have taken place at Nygard’s Toronto headquarters.

Nygard’s legal professionals argued that underneath The Companies Act, there are sections that describe situations when an organization pays the authorized prices of an officer, director or worker.

The choose denied their request.

“I fail to notice how it’s presumably in one of the best pursuits of NPL to efficiently defend felony costs of sexual assault and different associated offences in opposition to a former officer or director or private controlling or directing the company,” Edmond wrote.

He went on to say the legal professionals haven’t established that the felony costs have something to do with Nygard appearing as an officer or director of the businesses.

Edmond granted Nygard’s request to pay “cheap authorized charges {and professional} prices” within the receivership or chapter proceedings, however to not defend the felony costs in opposition to Nygard.

Nygard was arrested in Winnipeg in December 2020 on a nine-count indictment in the USA on costs of racketeering, intercourse trafficking and associated crimes.

Nygard was held at Headingley Correctional Centre till October 2021, when he was transferred to a Toronto jail. He’s charged with 11 counts of sexual assault and three counts of forcible confinement in Toronto, associated to allegations from the late Eighties and mid-2000s. 

In Might of this 12 months, Montreal police additionally charged Nygard with one depend of sexual assault and one depend of forcible confinement in Quebec. The alleged crimes, which contain the identical particular person, befell between Nov. 1, 1997, and Nov. 15, 1998.

Nygard isn’t going through costs in Winnipeg, regardless of quite a few girls reporting to police that he raped them.

The receiver additionally requested the courtroom to consolidate the 9 Nygard firms’ property for creditor functions, that means they might be allowed to make use of the property from any of the businesses to repay the money owed of the others.

The 2 firms owned by Nygard — Nygard Properties Ltd. and its mum or dad firm, Nygard Enterprises Ltd. — objected, saying they’ve property and revenues that the opposite firms shouldn’t be entitled to.

NPL was an actual property holding firm, and its property had been bought off through the course of the receivership. 

In courtroom filings NPL mentioned it is solvent, asset-rich and is a secured creditor for the opposite firms.

Justice Edmond discovered that Peter Nygard managed all the businesses, whether or not immediately or not directly, and that their funds had been intermingled. 

The choose additionally present in extra of $87-million in inter-company loans amongst them, and that Nygard Worldwide Partnership, for instance, paid hundreds of thousands to keep up Nygard’s Falcon Lake cottage.

Ultimately, he granted the receiver’s request to consolidate the businesses’ property.

“The bias that could be suffered by NPL, and its mum or dad company NEL, have to be weighed in opposition to the claims of the staff, landlords, suppliers and different distributors, reward card purchasers and taxing authorities who’re owed money owed by NIP [Nygard International Partnership], NI [Nygard International] and different debtors who’re economically advantaged by substantive consolidation of the debtors for creditor functions,” Edmonds wrote within the January resolution.

The choose additionally accepted the receiver’s request to file chapter proceedings for all 9 Nygard firms.

In March, Nygard filed an enchantment of the choose’s resolution to dismiss the request to pay for felony legal professionals, and to consolidate NPL’s and NEL’s property with the opposite firms.

The enchantment is scheduled to be heard in courtroom on Wednesday.