As Peter Nygard, 79, sits in jail in Winnipeg on charges related to allegations of sex trafficking, racketeering and other related crimes, the Court of Appeal of Manitoba has ruled that the court-appointed receiver of nine Nygard companies can sell one of its major properties in Winnipeg.
Richter Advisory Group Inc., which controls the assets of nine Nygard companies, had tried selling the Nygard property at 1771 Inkster Blvd. But last month, Nygard’s lawyers sought to block the deal.
Richter went to court to cancel any stay of proceedings on the sale of the Inkster property and sought an order for short leave so it could file and serve its materials on the motion.
“In my view, the relative prejudice weighs in favour of cancelling the stay. If the stay is not lifted, the sale agreement will come to an end,” ruled Court of Appeal Justice Janice leMaistre in a written decision dated Dec. 31, 2020.
Last November, Court of Queen’s Bench Justice James Edmond approved the sale of 1771 Inkster Blvd. and set Jan. 18, 2021, as the closing date.
Richter’s lawyers argued that the stay of proceedings inhibited them from closing the sale by that date, which could result in the purchaser walking away from the sale, or seeking compensation for any delays to that closing date, the court document says.
“The sale agreement was hard fought and there is little prospect of another purchaser. In my view, in light of the lack of merit to the appeal and the relative prejudice, it is in the interests of justice to lift the stay,” wrote leMaistre.
Nygard lawyers argued that there have been extensions on the sale of the Inkster property before, but leMaistre said she was unprepared to speculate that an extension would be granted past Jan. 18.
Richter Advisory Group has controlled nine Nygard companies since March, in order to recoup a debt of $25 million US owed to American lenders White Oak Commercial Finance and Second Avenue Capital Partners.
Nygard Properties says the debt to White Oak has been repaid, so Richter has no authority to sell any more of its property. The Nygard headquarters in Toronto and a Nygard property on Notre Dame Avenue in Winnipeg were sold by November 2020.
During a hearing last month, lawyer Colby Linthwaite argued that by selling the properties, Richter is selling assets that Nygard could use to pay off debts incurred by the rest of the Nygard Group of companies.
“It is clear from the record that there are a number of issues that have yet to be determined in the receivership. The appellants’ assertion that the lenders have been paid overly simplifies a complicated factual matrix,” wrote leMaistre.
She added that Nygard lawyers are ignoring the distinction between a privately appointed receiver and a court-appointed receiver — the latter of which acts as a court officer for the benefit of all stakeholders, and administers the estate in receivership until completion.
Nygard was arrested in Winnipeg on Dec. 14 in relation to a nine-count indictment in the United States accusing the man of racketeering, sex trafficking and other related crimes. He is currently in custody at the Winnipeg Remand Centre, but his bail application is set for 10 a.m. Wednesday.
Fifty-seven women joined a class-action suit, which was filed in New York in 2020, accusing Nygard of rape, sexual assault and human trafficking in several countries dating back to 1977.
The class action was put on hold last summer after a judge in the Southern District of New York entered a stay of proceedings, in order to allow the FBI to complete its investigation into Nygard, court documents say.
No allegations have yet been proven in court.
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