Court appointed Litigation Trustee of a litigation trust created pursuant to a plan approved by the Ontario Superior Court of Justice and the creditors of a public company listed on the Toronto Stock Exchange. The share price of the public company plummeted after a private analyst made allegations of fraud against the public company. Our obligation as the Litigation Trustee is to hold the assets of the Litigation Trust and oversee the efficient prosecution of the Litigation Trust claims. Our work included identifying any claims that may be available to the Litigation Trustee and thereafter, assessing the merits associated with those claims. These claims included:
- Claims against the CEO and senior management of the company for breach of fiduciary duty and acting contrary to public interest as a result of provision of misleading financial statements and misappropriation of the company’s assets. The Litigation Trustee obtained a favourable judgment from the Canadian Court ordering the former CEO to pay billions of dollars in damages after detailing his “extremely large and complex fraud” that caused the timber company to lose billions.
- Claims against the valuers of the company’s assets for negligence and breach of statutory, contractual and common law duties in the valuation of the company’s assets. Our work included performing an analysis of the valuation methodologies adopted by the valuers
and detecting their deficiencies in support of our claims.
- Claims against the auditor of the company for negligence and breach of statutory, contractual and common law duties in respect of its audit of the company’s financial statements.
Our work on the above claims involved a quantification of the loss and damage suffered by the company as a result of the complex fraudulent scheme to inflate the assets and revenue of the company.