satter
2 weeks ago
Winning Brands Ordered To Pay $16,000 In Court Costs.
On it's filed motion to dismiss in the bankruptcy applicase case it lost in a big way.
ENDORSEMENT OF JUSTICE W.D. BLACK:
[1] I heard a motion in this matter on October 21, 2024, in which Winning Brands Corporation (“WB”) sought a dismissal of these proceedings against it inasmuch as it is a Delaware corporation, purportedly not conducting business in Ontario.
[2] In my endorsement, also dated October 21, 2024, I dismissed WB’s motion, finding that it was “not a close call” and that, among other findings, the overwhelming preponderance of evidence showed that WB had been carrying on business in Ontario for a number of years.
[3] Given my finding, I determined that the respondent on the motion, Mr. Perlman, was entitled to his costs. Mr. Perlman had submitted a costs outline as required (WB had not) but it became apparent that Mr. Perlman had made an offer to settle that he wished to have taken into account for purposes of costs, and so I directed that the parties exchange submissions on costs, which they did.
[4] The written submissions that I received confirmed that Mr. Perlman had delivered an offer to settle, together with his responding materials for the motion (at the end of September, so early enough to trigger potential costs consequences). The offer contemplated that if WB accepted it that day (and agreed to a dismissal of his motion), he would only be obliged to pay to Mr. Perlman $1,000 in costs. After that day, if WB agreed to a dismissal of its motion and accepted the offer (which remained open until one minute after the motion commenced), the offer contemplated that WB would pay Mr. Perlman’s costs on a partial indemnity basis.
[5] Mr. Perlman’s written submissions on costs also asserted that the matter was of medium complexity, and was clearly of great importance in these proceedings, in that if WB succeeded, the proceedings against it would be at an end.
[6] WB agreed, in its submissions, that the matter was of importance (for the same reason articulated by Mr. Perlman), but argued that the amounts sought by Mr. Perlman were excessive, that the time spent was disproportionate to the length and complexity of the motion, and that Mr. Perlman deployed two lawyers, whereas WB used only one.
[7] WB filed its own costs outline together with its costs submissions (as noted it had not uploaded a costs outline, as required, at the time of the motion).
[8] WB’s costs outline, while confirming that WB used only one lawyer (as compared to the two lawyers deployed by Mr. Perlman), actually tends to confirm that the amounts sought by Mr. Perlman are “in the ballpark”.
[9] That is, in terms of partial indemnity costs, Mr. Perlman’s figure is $12,825.62, and WB’s figure is $11,525.15. For substantial indemnity, the figures are $18,271.14 (Mr. Perlman) versus $15,985.65 (WB).
[10] Although it is fair to note, as WB does, that Mr. Perlman used two lawyers for the motion, it is clear that the more senior of the two lawyers (who is a 2018 call as compared to his colleague who is a 2019 call) did the vast majority of the work on the file.
[11] I find that it is fair for costs to be paid on a substantial indemnity basis. While the offer to settle contemplated two different outcomes (depending on whether it was accepted on the first day or on a subsequent day), it is nonetheless clear that if WB had accepted the offer at any point before the motion it would have been better off from a costs perspective.
[12] I am prepared to modestly reduce the costs award because of Mr. Perlman’s use of two lawyers as compared to the single lawyer used by WB. This is not because there is anything inherently wrong with using two lawyers on a matter like this one. Rather, the two lawyers who worked on this matter for Mr. Perlman were very close in level (within a year of call) such that it would have been difficult to enjoy the efficiencies of much of the work being done at a more junior level and, in any event, most of the work was actually done by the more senior of the two lawyers.
[13] Overall, I find that WB is to pay Mr. Perlman’s costs of this motion on a substantial indemnity basis, in the amount of $16,000.00 inclusive of disbursements and HST.
[14] These costs are to be paid within 30 days of today’s date.
_________________________________
W.D. BLACK J.
RELEAASED: NOVEMBER 14, 2024
Chartmaster
2 weeks ago
WINNING BRANDS CORPORATION - GESTURETEK - RECEIVES NEW ASSIGNMENT FROM MUSEUM OF THE BIBLE IN WASHINGTON, D.C.Press Release | 12/18/2024
Winning Brands Corporation, Delaware, (OTC:WNBD) has been awarded a new assignment to enhance/upgrade its existing GestureTek GroundFX equipment installation at Washington, D.C.s Museum of the Bible. https://www.museumofthebible.org/.
Winning Brands Corporation (WNBD) acquired GestureTek patent protection rights and GestureTek's business legacy in 2022 with the intention to create a technology division for WNBD. GestureTek is a method of creating gesture-controlled interactive experiences for people in public spaces, or in certain medical applications. The GestureTek system projects audio/visual imagery on floors, walls and other surfaces that react to peoples body movements without touch. These movements can be deliberate or random to create far-reaching interactive immersive experiences. GestureTek is respected amongst audio-visual systems integrators in America and elsewhere. Sample medical uses can be seen here: www.GestureTekHealth.com.
The Museum of the Bible in Washington, D.C. has been a satisfied GestureTek client for years, and is reinvesting to keep its equipment up-to-date for the benefit of its many visitors.
Winning Brands Corporation CEO, Eric Lehner, comments, "Winning Brands Corporation looks forward to a number of new GestureTek installations in America in 2025, to be announced as soon as possible. We appreciate the customer affirmation that such upgrades and reinvestments represent. The Museum of the Bible in Washington is a well-known and popular attraction. GestureTek's customer base includes some of Americas foremost corporations and public agencies.
Mr. Lehner concludes - "Our plan is to also deploy GestureTek in grocery stores and similar retail environments where consumer products are sold to provide consumer product brands with a new way to advertise and engage consumers at point of sale for maximum impact. GestureTek placement into such settings is a cross-over application that leverages Winning Brands Corporation's experience in the consumer product environment. An initial Vancouver installation was previously announced. A follow-up prototype installation is targeted for Q1 2025 with a supermarket partner who has already been identified and has agreed to participate."
Winning Brands Corporation (Delaware) is a holding company with subsidiary interests in the chemical sector (specialty cleaning products sold by retailers) and specialized high-tech systems (gesture controlled interactive immersive experiences used by institutions). The lead consumer product website for 1000+ Stain Remover is www.1000PlusStainRemover.com. The lead gesture controlled interactive immersive experiences, called GestureTek, can be seen atwww.GestureTekHealth.com
MEDIA CONTACTS:
Winning Brands Corporation
Eric Lehner, CEO
(705) 737-4062, Extension 8
SAFE HARBOR:
Statements contained in this news release, other than those identifying historical facts, constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions as contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relating to the Company's future expectations, including but not limited to revenue and earnings, technology efficacy, strategies and plans, etc are subject to safe harbors protection. Actual Company results and performance may be materially different from any future results, performance, strategies, plans, or achievements that may be expressed or implied by any such forward-looking statements. The company disclaims any obligation to update or revise any forward-looking statements.
https://www.otcmarkets.com/stock/WNBD/news/WINNING-BRANDS-CORPORATION---GESTURETEK---RECEIVES-NEW-ASSIGNMENT-FROM-MUSEUM-OF-THE-BIBLE-IN-WASHINGTON-DC?id=462805
satter
1 month ago
Completely wrong. The Court already ruled on the Jurisdiction motion filed. It absolutely does not matter that the Company is a US Corporation. You should read the decision and famialize yourself with it. Read paragrapgh 5.
5 While acknowledging one or more cases in which foreign corporations, including Delaware corporations,
have been successfully assigned into bankruptcy in Canada, WBC asserts that it “does not conduct
business in Ontario or Canada.”
The Court concluded that WBC does conduct business in Canada but questioned whether it does so legally. Paragrapgh 20. You what to listen to Eric, go ahead. You'll finally realize how much he has mislead you when most likely his company will be bankurpt and gone when it's too late. I am giving you correct information, he is not, sure believe him.
20 There is no doubt, based on extensive public filings and representations, that WBC carried on business
in Ontario. It may, if its representations to the court are to be credited, have done so improperly or
illegally (if it was never registered or licensed in Ontario) but there is nonetheless no doubt based on its
ongoing public disclosure that it carried on business here.
1 This is a motion by the debtor Winning Brands Corporation (“WBC”), in the context of a pending
bankruptcy application against it by a creditor, Charles Perlman, for an order to strike or permanently
stay that bankruptcy application.
2 The purported basis for the motion is that WBC is a Delaware corporation, operates only in Delaware,
does not own any property in Canada, does not have licenses or pay taxes in Canada, is not registered
to do business in Ontario (or elsewhere in Canada) and has no place from which it does business in
Ontario.
3 WBC argues that in order for a foreign entity/debtor to be subject to Canadian bankruptcy law, a
sufficient “nexus” must be shown between the foreign corporation and the Canadian court in which the
Canadian creditor is seeking to assign the corporation into bankruptcy.
4 This in turn boils down, WBC maintains, to whether or not the insolvent person “at the time of an act of
bankruptcy was committed by him resided or carried on business in Canada.” This notion is confirmed
in section 2(1) of the BIA defining a debtor as “…any person who, at the time an act of bankruptcy was
committed by him, resided or carried on business in Canada.”
5 While acknowledging one or more cases in which foreign corporations, including Delaware corporations,
have been successfully assigned into bankruptcy in Canada, WBC asserts that it “does not conduct
business in Ontario or Canada.”
6 It argues that it does business exclusively in the United States, is registered and listed (On the SEC OTC
exchange) there, and pays taxes in the United States. It claims that it has many American secured and
unsecured creditors, and that an assignment in bankruptcy would impact on those U.S. creditors.
7 Finally, and only recently, it argues that Ontario is not a convenient forum for these proceedings, and
that it does not attorn to the jurisdiction of the Ontario courts to hear them.
8 The difficulty with WBC’s position, as elaborated in detail in the responding submissions of Mr. Perlman,
is that much of what it says is at odds with the evidence in the record before this court.
9 Mr. Perlman assert six grounds on which this court has jurisdiction over WBC.
10 First, the underlying loan agreements (the “Loan Agreements”) giving rise to WBC’s debt to Mr. Perlman,
and in respect of which Mr. Perlman obtained a contested judgment in Ontario, each contain a forum
clause confirming that all proceedings between the parties “related to the subject matter of this
Agreement” may be commenced in Ontario, at Mr. Perlman’s sole discretion.
11 The Loan Agreements were drafted by Friedrich Nikolai (Eric) Lehner, the CEO of WBC (and WBC’s
Canadian subsidiary corporations). Mr. Lehner is stated in public disclosure to own 95% of the Preferred
Shares of WBC, and through that shareholding to exert “voting control” over WBC. Mr. Lehner, it is
agreed, lives in Barrie, Ontario.
12 As noted, pursuant to a contested motion for summary judgment, in which WBC was a represented party
defendant, O’Brien J. found for Mr. Perlman, ordering the defendants (including WBC) to pay CAD
$85,000 and Uof 60% per annum. The contractual interest rate of 15% per month – which O’Brien J. found Mr. Lehner
had proposed - would have yielded 180% interest per annum, and Mr. Perlman insisted that the parties
instead agree to the “legislated upper limit” in Canada.
SD $23,462.20 to Mr. Perlman together with pre and post-judgment interest at the rate
13Justice O’Brien also found the defendants liable as guarantors for an additional $10,000 loan made to a
third party, and declared that Mr. Lehner had engaged in fraudulent misrepresentations which induced
Mr. Perlman to make one of the loans he made to the defendants.
14There is no indication, and WBC does not allege, that it contested the jurisdiction of the Ontario court to
hear and decide the underlying contractual claim. I expect it would have been difficult for the
defendants, including WBC, to contest jurisdiction given the clear clauses, drafted by Mr. Lehner, that
gave Mr. Perlman the option of electing to proceed in Ontario.
15 Second, there can be no doubt that WBC in fact carries on business in Ontario. The materials in the
record before me are replete with examples of WBC representing to the public and investors for years
that it conducts business out of an office in Barrie, Ontario. WBC variously refers, in its public disclosure,
to 92 Caplan Avenue in Barrie as its “principal executive office”, its “formal business office” or its
“principal place of business.”
16 The record includes numerous quarterly public filings by WBC confirming its Barrie address, and
representing that “The issuer’s i.e. WBC’s formal business office, with reception, boardroom and other
public facilities is located in an executive business center at 92 Caplan Avenue, Barrie, Ontario…”
17WBC’s website displays (or displayed during the relevant period) the Barrie address.
18On January 26, 2023, WBC issued a press release saying that “Winning Brands Corporation and its new
GestureTek Division will operate from its new headquarters location beginning February 2023. The
facility in Toronto’s Don Mills area at 179 Bartley Drive will combine production, administration, sales,
and storage in a single location for the first time.” In connection with that new Toronto facility, WBC
signed an indemnity to the landlord for any amounts owing by its subsidiary under the Toronto lease.
19 Mr. Perlman relies on Royal Bank of Canada v. FASI 2 Ltd., in which the Court of King’s Bench in Alberta
found, relative to an individual living in Texas, that relevant financial statements saying that he carried
on business as a consultant at a Calgary address was “sufficient to establish that the locality of the
debtor is Calgary.”
20 There is no doubt, based on extensive public filings and representations, that WBC carried on business
in Ontario. It may, if its representations to the court are to be credited, have done so improperly or
illegally (if it was never registered or licensed in Ontario) but there is nonetheless no doubt based on its
ongoing public disclosure that it carried on business here.
21 Third, and similarly, there is no doubt based on its disclosure that WBC also resided in Ontario. Again,
numerous statements WBC made in the public domain confirm that its office was on Caplan Avenue in
Barrie.
22 WBC argues before me that not WBC, but the Winning Brand “Group” consisting of WBC’s Canadian
subsidiaries, resided, and operated in Ontario. Again, WBC’s various public representations, including
its many quarterly reports and its media release about its new lease in Toronto in January of 2023, belie
this suggestion. WBC itself is repeatedly said to reside and operate in Ontario
23 Fourth, with respect to assets in Ontario, Mr. Perlman points out that on WBC’s own theory, that its
Ontario-based subsidiaries operated in Ontario, by definition WBC owns assets – being the shares of its
subsidiaries – in Ontario. WBC oddly denies that it actually holds shares in its wholly-owned subsidiaries,
but it seems to me that this is unlikely, and that WBC cannot have it both ways.
24 Fifth, there is also no question that WBC’s debts were incurred while conducting business in Ontario.
Those debts were confirmed by this court, and remain outstanding.
25 In such circumstances, as confirmed in Cheerio Toys & Games Ltd. Re, 1969 CarswellOnt 62 and
Granatstein, Re, 1997 CarswellOnt 3054, respectively, the debtor is deemed to carry on business within
the jurisdiction of the court until the debts have been satisfied, and a creditor has the right to file a
petition in the Province of Ontario on the basis that the debtor is carrying on business here.
26 Sixth, applying the common law test for corporate residency, requiring the court to consider the location
of the company’s “central management and control”, Mr. Perlman notes that Mr. Lehner is the sole
officer and director of WBC, and that he exercises voting control over the company and makes all
management decisions on its behalf. He resides in Ontario, and manages and controls WBC, as its sole
directing mind, from Barrie, Ontario.
27 Mr. Perlman makes certain public policy arguments in support of his position, including that parties who
represent to the public that they reside and operate in a particular jurisdiction ought not, when their
creditors pursue them, be allowed to “abscond” from that jurisdiction and purport to be located and
operating elsewhere
28 In my view, the determination of this motion is not a close call.
29There is an overwhelming preponderance of evidence linking WBC to Ontario, and no basis to stay or
strike Mr. Perlman’s application. As such, I dismiss WBC’s motion.
30 Mr. Perlman is entitled to his costs of the motion.
31 He has submitted a costs outline, but his counsel advised that, depending on the outcome, further
submissions would be required. I infer from this submission that there may be an offer or offers to
consider.
32 As such, I ask that Mr. Perlman provide a brief written submission with respect to costs within seven
days of receiving this decision. WBC may then have four days within which to file responding
submissions. In each case, the maximum length of such submissions, apart from any costs outline, should
not exceed three pages.
READ
There is no requirement in the BIA that a business debtor be incorporated in
Canada in order for it to become bankrupt in Canada. The BIA is applicable to
any corporation, wherever incorporated, that does business or has assets in
Canada. It is, therefore, possible for a foreign corporation with assets in Canada
to be liquidated under the BIA
satter
2 months ago
WNBD - Assigning a Delaware corporation into bankruptcy in Canada?
How do you determine whether a debtor resides in Canada?
https://insolvencyinsider.ca/p/assigning-a-delaware-corporation-into-bankruptcy-in-canada
Re Winning Brands Corporation
How do you determine whether a debtor resides in Canada?
Summary: In this case, the Court considered a request by a debtor — a Delaware corporation — to strike or permanently stay a bankruptcy application commenced against it by a creditor in Ontario. The debtor argued that it operated only in Delaware, did not own any property in Canada, did not have licenses or pay taxes in Canada, was not registered to do business in Ontario (or elsewhere in Canada) and had no place from which to do business in Ontario. The Court refused the request based on extensive public filings and representations made by the corporation, which made clear that the corporation did, in fact, carry on business in Ontario. In addition, the Court found that the loan agreements contained a forum clause in favour of Ontario.
The debtor, Winning Brands Corporation (“WBC”), moved for an order to strike or permanently stay a bankruptcy application commenced against it by a creditor, Charles Perlman. The purported basis for the motion was that WBC is a Delaware corporation, operates only in Delaware, does not own any property in Canada, does not have licenses or pay taxes in Canada, is not registered to do business in Ontario (or elsewhere in Canada) and has no place from which it does business in Ontario.
WBC argued that in order for a foreign entity/debtor to be subject to Canadian bankruptcy law, a sufficient “nexus” must be shown between the foreign corporation and the Canadian court in which the Canadian creditor is seeking to assign the corporation into bankruptcy. This, in turn, boils down to whether or not the insolvent person at the time when an act of bankruptcy was committed by him resided or carried on business in Canada.
While acknowledging one or more cases in which foreign corporations, including Delaware corporations, have been successfully assigned into bankruptcy in Canada, WBC asserted that it does business exclusively in the United States, is registered and listed on the US Securities and Exchange Commission Over-the-Counter Market, and pays taxes in the United States. It claimed that it has many American secured and unsecured creditors, and an assignment in bankruptcy would impact those creditors. Finally, it argued that Ontario was not a convenient forum for these proceedings, and that it did not attorn to the jurisdiction of the Ontario courts to hear them.
Perlman argued that the Ontario bankruptcy court had jurisdiction over WBC. First, the underlying loan agreements (the “Loan Agreements”) giving rise to WBC’s debt to Perlman, and in respect of which Perlman obtained a contested judgment in Ontario, each contained a forum clause confirming that all proceedings between the parties “related to the subject matter of this Agreement” may be commenced in Ontario, at Perlman’s sole discretion. The Loan Agreements were drafted by the CEO of WBC, who owned 95% of the Preferred Shares of WBC, and, through that shareholding, exerted “voting control” over WBC. It was not contested that the CEO lived in Barrie, Ontario.
Second, there was no doubt that WBC carried on business in Ontario. WBC had represented to the public and investors for years that it conducts business out of an office in Barrie, Ontario. In its public disclosure, WBC referred to this Barrie office as its “principal executive office”, its “formal business office” or its “principal place of business.” During the relevant period, WBC’s website displayed the Barrie address. On January 26, 2023, WBC issued a press release advising of its new headquarters location in Toronto, and signed an indemnity to the landlord for any amounts owing by its subsidiary under the Toronto lease.
The Court found that, based on extensive public filings and representations, WBC carried on business in Ontario. It may have done so improperly or illegally (if it was never registered or licensed in Ontario) but there was, nonetheless, no doubt that it carried on business there.
Third, with respect to assets in Ontario, Perlman argued WBC owned assets—being the shares of its subsidiaries—in Ontario. Fourth, there was no question that WBC’s debts were incurred while conducting business in Ontario. Those debts were confirmed by the Court, and remain outstanding. In such circumstances, the debtor is deemed to carry on business within the jurisdiction of the court until the debts have been satisfied, and a creditor has the right to file a petition in the Province of Ontario on the basis that the debtor is carrying on business here.
In the Court’s view, there was an overwhelming preponderance of evidence linking WBC to Ontario, and no basis to stay or strike Perlman’s application. As such, the Court dismissed WBC’s motion and held that Perlman was entitled to his costs of the motion.
Judge: Justice Black
Counsel: Josh Suttner and Shaun Parsons of Aird & Berlis for Charles Perlman; Matthew Harris for Winning Brands Corporation
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