This was a plot twist that I didn’t see coming.
The Globe And Mail is reporting that Quadangle which is a private equity firm is suing the Canadian Government for $1.2 billion dollars. The reason for the suit is as follows:
A statement of claim filed with the Ontario Superior Court of Justice on Thursday alleges that in 2006, representatives from Industry Canada approached John Bitove, a Canadian businessman known for his development of satellite radio provider Sirius XM Canada, and encouraged him to invest in a new wireless company.
Mr. Bitove and his partners invested hundreds of millions of dollars in buying spectrum licences in the 2008 auction for the airwaves used for cellular services and built out a network in large urban centres in Ontario, B.C. and Alberta.
The crux of the claim is that the government made assurances that it would create market conditions that would allow new entrants to establish themselves and that any investment made would not be lost as the spectrum licences could be transferred to one of the country’s dominant three wireless players after five years.
However, the government has since blocked several attempts by Mobilicity, the company Mr. Bitove ultimately founded, to sell its airwaves to Telus Corp., one of the Big Three.
“Having caused the plaintiffs to lose substantially all of their investment, Industry Canada broke its final promise by refusing to allow the sale of the business after five years,” Quadrangle said in the statement of claim.
Keep in mind that Mobilicity has been fighting to stay alive for the last little while and Industry Canada has stopped multiple takeover attempts from Telus. Thus its future is very much in limbo. Another thing to keep in mind: A lawsuit like this isn’t going to make a big foreign telco want to come and set up shop here in Canada. Thus the Canadian Government may want to fix that impression and fix it quickly so that it can deliver on it’s promise of more choice, lower prices, and better service. In the meantime, I hope that the Canadian Government has a great suite of lawyers.
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This entry was posted on September 5, 2014 at 10:33 am and is filed under Commentary with tags Lawsuit, Mobilicity. You can follow any responses to this entry through the RSS 2.0 feed.
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Canadian Gov’t Sued For $1.2 BILLION Over Mobilicity Fiasco
This was a plot twist that I didn’t see coming.
The Globe And Mail is reporting that Quadangle which is a private equity firm is suing the Canadian Government for $1.2 billion dollars. The reason for the suit is as follows:
A statement of claim filed with the Ontario Superior Court of Justice on Thursday alleges that in 2006, representatives from Industry Canada approached John Bitove, a Canadian businessman known for his development of satellite radio provider Sirius XM Canada, and encouraged him to invest in a new wireless company.
Mr. Bitove and his partners invested hundreds of millions of dollars in buying spectrum licences in the 2008 auction for the airwaves used for cellular services and built out a network in large urban centres in Ontario, B.C. and Alberta.
The crux of the claim is that the government made assurances that it would create market conditions that would allow new entrants to establish themselves and that any investment made would not be lost as the spectrum licences could be transferred to one of the country’s dominant three wireless players after five years.
However, the government has since blocked several attempts by Mobilicity, the company Mr. Bitove ultimately founded, to sell its airwaves to Telus Corp., one of the Big Three.
“Having caused the plaintiffs to lose substantially all of their investment, Industry Canada broke its final promise by refusing to allow the sale of the business after five years,” Quadrangle said in the statement of claim.
Keep in mind that Mobilicity has been fighting to stay alive for the last little while and Industry Canada has stopped multiple takeover attempts from Telus. Thus its future is very much in limbo. Another thing to keep in mind: A lawsuit like this isn’t going to make a big foreign telco want to come and set up shop here in Canada. Thus the Canadian Government may want to fix that impression and fix it quickly so that it can deliver on it’s promise of more choice, lower prices, and better service. In the meantime, I hope that the Canadian Government has a great suite of lawyers.
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This entry was posted on September 5, 2014 at 10:33 am and is filed under Commentary with tags Lawsuit, Mobilicity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.