Hey there, time traveller!
This article was published 22/10/2013 (918 days ago), so information in it may no longer be current.
Winnipeg Mayor Sam Katz severed business ties with the directors of Shindico Realty during the months leading up to the release of a review into Winnipeg's fire-paramedic-station construction program.
The mayor has moved to become the sole owner of the Winnipeg Goldeyes baseball club by purchasing all the shares belonging to Shindico directors Robert and Sandy Shindleman -- as well as by paying out the receiver of the defunct Crocus Investment Fund.
"The deal started a year ago and was signed off a few months ago," Katz told reporters following Tuesday's special council meeting to accept a review into the construction of four fire-paramedic stations.
That review concluded Shindico was awarded contracts through what amounted to a non-competitive process. "The auditor felt that they were given an unfair advantage and there was not a level playing field," Katz said.
This conclusion also placed a spotlight on the mayor's relationship with the firm, whose directors invested in the Goldeyes before Katz was elected mayor and used to serve as directors of Riverside Park Management, a non-profit organization that sublets City of Winnipeg land to the privately owned baseball club.
Last fall, Katz hinted in a radio interview he would take steps to end speculation about his relationship with the Shindleman brothers. On Tuesday, he said he began talks to purchase their portion of the Goldeyes last fall and concluded the deal when he could also reach an agreement with the Crocus receiver, which had been trying to recover as much as $430,000 from the ball club.
"It was all done as a package," Katz explained. "Crocus was going through a long-standing process where they wanted to get out."
The receiver for the fund had gone to court in 2006 to argue the Goldeyes must repay loans, while Katz had argued the fund had made an equity investment in the team, which was not making enough money to repay that investment.
"I made it very clear to Crocus they were either one or the other -- they were either an investor and have equity or they could be a bank, take your pick," Katz said. "I think they made a very astute decision and they got paid out."
Neither Katz nor Deloitte, the receiver for the defunct fund, would divulge the amount of money paid in the transaction, which closed in September.
"We settled our interest, which was shares, a loan and interest," said Steven Peleck, Deloitte's senior vice-president in Winnipeg. As part of the settlement, the receiver also discontinued legal action against the Goldeyes.
Katz said the total amount of cash paid out to Crocus and the Shindleman brothers exceeded $1 million and represented 35 per cent of the Goldeyes' value as a franchise.
He also stated the birth of his son last fall was an impetus for the purchase. "Something very special took place in my life 11 months ago. I have a son and I expect him to maintain the tradition," he said.
The fire-paramedic-station review initially was expected to be released at the end of May. The purchase of Goldeyes shares appears to have occurred between July and September, according to a corporate records search that suggests Robert Shindleman still maintains some interest in the club.
In July, the Goldeyes' directors were Sam Katz, Robert Shindleman and Sandy Shindleman. On Sept. 18, Katz was named the sole director, but one of the shareholders was listed as Evergreen & Taylor Partners, an entity owned by Robert Shindleman. Katz said the public record will eventually show he is the sole owner of the club.
The oversight of Riverside Park Management changed even more recently. In September, the non-profit organization's directors were Goldeyes chief financial officer Jason McCrae-King, Robert Shindleman and Sandy Shindleman.
On Oct. 18, the Shindleman brothers were replaced as Riverside directors by Goldeyes assistant general manager Regan Katz and Goldeyes facility manager Don Ferguson.