According to a report, MI Developments, numerous shareholders, and its controlling shareholder, Frank Stronach, are being sued by some of the company's biggest
investors.
The investors are claiming that Stronach and the directors in question propped up Stronach's unsuccessful horseracing ventures before and after its collapse.
An article by the Toronto Star explains that five U.S.-based investment firms -- which collectively hold 26.1 per cent of the equity in MI -- have said that MI Developments took part in a “myriad of connected related party loans and other transactions” with racetrack and gambling operator Magna Entertainment Corp. (MEC) to ensure its assets remained under Stronach’s control and not sold to third parties.
The report also states that, in a claim filed recently in the Ontario Superior Court of Justice, the company’s directors breached their fiduciary duties by approving loans that “were not reasonable and fair” to the real estate company and caused “massive value destruction.”
To read the article in its entirety, click here.
(With files from the Toronto Star)