December 4, 2013 Sections
Winnipeg Free Press - PRINT EDITION
Everyone -- except perhaps Daren Jorgenson -- knew his 50-50 business relationship with Ray Rybachuk wasn't going to end happily.
The bun-fight incident was the first hint. At least it was the first public hint the two-year-old Exchange District business partnership between Jorgenson, the former Internet pharmacy entrepreneur, and Rybachuk, the convicted narcotics trafficker, was unbalanced.
In every sense of the word.
The incident happened in early May at their co-owned Royal Albert Arms Hotel when Rybachuk -- the big, dark-haired dude who could have been the body double for The Sopranos character Big Pussy -- flipped out over his hamburger bun arriving grilled.
Rybachuk, of course, is no pussy. So the tantrum escalated. And in short order, Rybachuk fired the hotel restaurant's lunch-hour shift -- the chef, his assistant and the only server.
The bun fight quickly became a social-network sensation.
According to Jorgenson, Rybachuk wasn't supposed to have any say in operating the restaurant or the popular punk-rock and heavy-metal-oriented bar.
It wasn't part of the deal when Jorgenson said he gave Rybachuk half ownership in the Royal Albert and the building next door, for which Jorgenson paid $900,000 six years ago. At the time, Jorgenson said he did the deal on a demand-mortgage basis, without receiving any money from Rybachuk, because he needed him and his construction background to reopen the Albert after a burst pipe flooded the basement.
Jorgenson explained the demand mortgage, in this case, means he can demand payment of Rybachuk's half ownership within 30 days.
But by the time I spoke with Jorgenson about the bun incident, the imbalance in the partnership appeared obvious. Jorgenson expressed regret over the firings but seemed powerless to do anything but give the three former employees generous severance packages.
"Very unique situation I find myself involved in," Jorgenson mused at the time.
But it was a unique situation of Jorgenson's own making, with a business partner whose criminal record also includes money-laundering, assault, obstruction of justice, mischief and, according to a criminal background check, ties to the Manitoba chapter of the Hells Angels.
Finally, on Wednesday, a month and a half after the grilled-bun incident, Jorgenson announced he's had enough.
Worn out by the chaos of the relationship, he wanted out.
Although that's not how he initially positioned it in a brief announcement on the hotel's Facebook page. Jorgenson wrote he had "chosen" to turn in his hotel liquor licence and "leave the bar closed until certain things are dealt with."
Later, pressed for an explanation, Jorgenson went further: "I no longer want to own the building or operate the bar."
He said he'd called the demand mortgage with Rybachuk.
Jorgenson said he expected the process to take some time.
But he pledged if he ends up owning the hotel on his own, "then it will only be sold to someone that will guarantee in writing that it remains a live-music venue."
"I tried my best, but (the Royal Albert) is not where I wanted it to be. It is taking up too much of my time and is frankly a soap opera out of control. It is time for someone else to carry (the Royal Albert) forward. Whoever that person or group is will get a building that has a tremendous amount of improvements to it as compared to when I first bought it."
Jorgenson suggested someone could develop and operate both the Royal Albert and the St. Charles Hotel in a model like the Drake and Gladstone in Toronto. Or maybe Music Manitoba or the Winnipeg Folk Festival could operate it.
I'm told that in the past, CentreVenture has expressed interest in purchasing the Royal Albert, so who knows?
Of course, much of what happens depends on whether Jorgenson and Rybachuk can settle their joint-ownership situation. And whether Rybachuk pays what Jorgenson says he owes him: half of what it's worth.
"If he doesn't pay," Jorgenson said, "then I legally foreclose his 50 per cent interest in the buildings and then sell them."
Wednesday, Rybachuk told me he doesn't owe Jorgenson anything, that his rebuilding of the hotel after the flood took care of his end of the deal. Although, later that evening, the pair appeared to be negotiating via an email trail that Jorgenson forwarded to me.
"You will get paid out your money and we will be brothers," the last email from Rybachuk to Jorgenson read. "That's your guarantee."
Looks like we could be in for another bun fight. Except this time if Ray Rybachuk fires anyone, it will be a lawyer.
Republished from the Winnipeg Free Press print edition June 20, 2013 B1