CBC probe distracts staff, Nygard claims

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Peter Nygard at the Nygard offices. (DAVID LIPNOWSKI / WINNIPEG FREE PRESS ARCHIVES) Photo Store

Fashion titan Peter Nygard argues in court documents that a CBC investigation of him undermines his business because it distracts his employees at work and home.

Nygard launched the case against CBC and three of his former employees in March in an attempt to block a Fifth Estate story about him from airing. The documents say the story includes passenger lists of who flew on his private aircraft, aircraft manifests, confidential e-mails and video of company-related activities at Nygard's lavish Bahamian resort.

Nygard's legal team has recently filed related claims against CBC in New York and California.

Nygard's Winnipeg lawyer Richard Good claims in the documents that the CBC story, which has no airing date yet because of the court case, has damaged Nygard's business.

"This has caused an enormous amount of damage to our client at a time when management personnel should be devoting all their energies to protecting the business and its employees from the effects of the economic recession," Good wrote in the court filings.

Good said Nygard's current and former workers have been "harassed" at home by CBC employees trying to dig up information. Eight have filed formal complaints against CBC, including two former flight attendants who worked for Nygard.

"Contacting our client's employees directly and by ambush is not a path to the fair and balanced coverage which CBC is required to achieve," Good said.

Nygard also claims CBC promised to legally defend two former Nygard employees if they helped CBC with the story. CBC denies it offered any inducements to anyone in researching the story, and that the information it obtained was provided voluntarily by former employees.

"This is a most unusual case," wrote lawyer Rocky Kravetsky, who acts for a former employee being sued by Nygard. "Nygard is suing the former employees for telling the truth."

Kravetsky acts for Shannon Neufeld, who worked for Nygard as a travel consultant for about eight months in 2007.

Nygard claims Neufeld turned over to CBC information "required by various governments" about the private aircraft used by Nygard.

Good said in the court documents that Neufeld told CBC she was directed by a company official to falsify the flight records of the aircraft to inaccurately state the number of days Nygard spent in Canada, allegedly for the purpose of evading federal income tax.

"It is our understanding that in an attempt to create a story, CBC has encouraged Neufeld to meet with the Canadian Revenue Agency to discuss her allegations," Good said. "This statement by Neufeld is false, scandalous and libelous and extremely injurious to Nygard and its senior personnel.

"We are advised CRA has done thorough audits using its own records, that there has never been a dispute about the number of days Nygard's chairman has spent in Canada and that the total number of such days is always well under the critical 183-day threshold," Good wrote in a May 1 letter to Kravetsky and lawyer Robert Tapper, who acts for CBC.

People are deemed residents of Canada for tax purposes if they stay in Canada for 183 days or more a year.

CBC and Tapper have declined comment.

Nygard is also suing his former director of human resources Patrick Prowse and former recruitment and retention manager Dana Neal.

Nygard alleges that the CBC conspired with and encouraged the former employees to release confidential company information to CBC.

bruce.owen@freepress.mb.ca

Who is Peter Nygard?

The Finnish-born CEO of the Winnipeg-based fashion empire started his career in Winnipeg in 1967 when he gathered his life savings and borrowed $8,000 capital to buy 20 per cent of a women's garment manufacturer with $800,000 in annual sales. In a few years, he owned the company.

Canadian Business magazine recently said Nygard was Canada's 70th wealthiest citizen. His net worth climbed 21 per cent to $817 million, up from $676 million a year ago.

Nygard's Inskter Boulevard company makes clothing targeting women over 25.

The company has more than 200 retail stores across North America under the banners of NYGRD, Bianca Nyg*rd, ALIA, TanJay and JaySet, and more than 1,500 locations around the world.

Peter Nygard's mother, described at the matriarch of the Nygard clothing empire, died Tuesday after a long illness, a Nygard company spokesperson said Tuesday.

Republished from the Winnipeg Free Press print edition January 13, 2010 A6