VANCOUVER (CP) - The owner of the Vancouver Canucks "scooped" the team from his former business partners, unlawfully going behind their backs to conspire to get the upper hand, a lawyer charged Monday.
Irwin Nathanson opened what's sure to become a sensational court case Monday, pitting Francesco Aquilini and his family and former team owner John McCaw against two former partners, including one with whom the Aquilini family had had long family ties. Those expected to testify include the Aquilinis, the Canucks' former general manager Brian Burke and the media-shy McCaw.
Aquilini said outside court he did nothing wrong and is the rightful owner of the team.
But Nathanson told a judge the team should be held in trust for Ryan Beedie and Tom Gaglardi.
"Aquilini, armed with knowledge of his former partners' bargaining position, surreptitiously bid against them," Nathanson said in court.
The case revolves around the November 2004 deal that saw McCaw sell 50 per cent of the team to Aquilini with a right for Aquilini to get the first chance to purchase the remainder, which Aquilini did last year.
But Beedie and Gaglardi say Aquilini had no right to enter into negotiations with McCaw.
B.C. Supreme Court heard McCaw, of Seattle, was losing about $20 million a year keeping the Canucks afloat and found himself the 100 per cent owner of the team and GM Place as a result of circumstances. He never wanted full ownership of the team and he wanted to sell some or all of the franchise by 1999.
In 2003, consulting firm KPMG concluded the only people likely to successfully reach a deal to purchase the team were Gaglardi and Beedie.
The Gaglardi family owns Northland Properties with interests in hotels, restaurant chains and real estate. The Beedie group is the largest landlord of industrial property in British Columbia.
Tom Gaglardi testified when Aquilini first suggested they get together to buy the Canucks in 2001 Gaglardi wasn't interested because he said it was "a money-losing enterprise."
But in 2002, he was approached again by a representative at KPMG, saying Orca Bay wanted $280 million for the team and GM place.
Gaglardi said there had been enough changes to the structure and the financial results of the team had been improving to the point that he was comfortable and wanted in.
Court heard that fall, Gaglardi's father suggested to his son they invite Aquilini to join with them to begin negotiations on a deal.
Gaglardi's father and Aquilini's father had been in business since the late 1980s. In 2003, they were involved in a plan to develop a Whistler-style ski resort near Squamish, a project that is just now entering the environmental assessment stage. If it passes, the venture is expected to be ongoing for another 20 years.
Aquilini also knew Beedie socially.
By November 2003, the group was in active discussions with Stan McCammon, the CEO of Orca Bay, McCaw's company that owned the Canucks.
The group had agreed that Gaglardi would act on its behalf and that all understood that any information obtained by one of them would be shared by the others.
But cracks began to appear in January 2004 after Gaglardi found out that Aquilini had met directly with McCammon, Nathanson said.
In a telephone conversation, Aquilini told Gaglardi he was unhappy that he had not been kept informed of other developments in the deal, but the two eventually worked out their differences in a meeting in the beginning of February.
Later, Aquilini told the other two that because of his family's involvement in a condominium project, he wasn't sure he'd be able to raise the cash necessary to continue being part of any deal. He asked if talks could be put off until the fall and when Gaglardi said no, Aquilini said he'd have to step out.
But Aquilini also asked to be kept apprised of the situation in case he was able to participate at a later date.
Nathanson suggested that on repeated occasions, McCammon's diaries indicate he spoke with Aquilini, sometimes shortly after speaking to the other two about the Canucks sale.
With an NHL players lockout looming, negotiations came down to the wire in late October 2004, with Gaglardi and Beedie and McCaw and McCammon going back and forth on a purchase agreement.
Nathanson said during one rare telephone call with McCaw himself on Oct. 30, McCaw asked Gaglardi if the deal was conditional on closing during December.
"Gaglardi responded that both he and Beedie were motivated to close before year-end but the deal was not conditional upon it and it could close later if it had to."
McCaw suggested Gaglardi and Beedie come to Los Angeles to meet with him, but Nathanson said the business partners were put off three separate times.
On Nov. 5, McCaw called Gaglardi and told him the deal didn't work for him.
He said Gaglardi had "bargained too hard," Nathanson recounted.
When Gaglardi said he and Beedie would seriously reconsider the deal proposed Oct. 30, McCaw said it was no longer available.
"Gaglardi will testify that he was stunned by McCaw's abrupt decision to end the negotiations," Nathanson said.
"McCaw's conduct in November 2004 would only have made sense to Gaglardi and Beedie if they had known that Aquilini, armed with knowledge of their negotiating position. . . and assisted by McCammon, had surreptitiously competed against them and scooped them."
Nathanson read from a statement Aquilini gave in his examination for discovery in which Aquilini recounted a dinner meeting with McCammon. Aquilini said he asked McCammon how the negotiations were going and McCammon said he didn't think the deal was going to get done.
Aquilini testified in his examination: "I said if you're going to tell me that those negotiations have ended, then I will start negotiating with you. . . And he assured me of that. He said absolutely they've ended."
But Nathanson said there is a "serious issue" as to whether that evidence "was truthful."
Nathanson also pointed to McCammon's examination for discovery in which McCammon agreed he had dinner with Aquilini and Aquilini's lawyer the evening of Nov. 3, 2003, to discuss a deal. At that time, McCaw hadn't rejected Gaglardi's proposal.
Outside court, Aquilini said he couldn't comment on the evidence before the judge, but said his side will become clear when his lawyers have a chance to present his account.
"We're confident the truth will come out and the facts will be revealed," he said.
"We're the rightful owners. We just tried to buy the team and keep it in Vancouver. Unfortunately, this is an event that we'll have to deal with."