satter
3 days ago
WNBD - Assigning a Delaware corporation into bankruptcy in Canada?
How do you determine whether a debtor resides in Canada?
https://insolvencyinsider.ca/p/assigning-a-delaware-corporation-into-bankruptcy-in-canada
Re Winning Brands Corporation
How do you determine whether a debtor resides in Canada?
Summary: In this case, the Court considered a request by a debtor — a Delaware corporation — to strike or permanently stay a bankruptcy application commenced against it by a creditor in Ontario. The debtor argued that it operated only in Delaware, did not own any property in Canada, did not have licenses or pay taxes in Canada, was not registered to do business in Ontario (or elsewhere in Canada) and had no place from which to do business in Ontario. The Court refused the request based on extensive public filings and representations made by the corporation, which made clear that the corporation did, in fact, carry on business in Ontario. In addition, the Court found that the loan agreements contained a forum clause in favour of Ontario.
The debtor, Winning Brands Corporation (“WBC”), moved for an order to strike or permanently stay a bankruptcy application commenced against it by a creditor, Charles Perlman. The purported basis for the motion was that WBC is a Delaware corporation, operates only in Delaware, does not own any property in Canada, does not have licenses or pay taxes in Canada, is not registered to do business in Ontario (or elsewhere in Canada) and has no place from which it does business in Ontario.
WBC argued that in order for a foreign entity/debtor to be subject to Canadian bankruptcy law, a sufficient “nexus” must be shown between the foreign corporation and the Canadian court in which the Canadian creditor is seeking to assign the corporation into bankruptcy. This, in turn, boils down to whether or not the insolvent person at the time when an act of bankruptcy was committed by him resided or carried on business in Canada.
While acknowledging one or more cases in which foreign corporations, including Delaware corporations, have been successfully assigned into bankruptcy in Canada, WBC asserted that it does business exclusively in the United States, is registered and listed on the US Securities and Exchange Commission Over-the-Counter Market, and pays taxes in the United States. It claimed that it has many American secured and unsecured creditors, and an assignment in bankruptcy would impact those creditors. Finally, it argued that Ontario was not a convenient forum for these proceedings, and that it did not attorn to the jurisdiction of the Ontario courts to hear them.
Perlman argued that the Ontario bankruptcy court had jurisdiction over WBC. First, the underlying loan agreements (the “Loan Agreements”) giving rise to WBC’s debt to Perlman, and in respect of which Perlman obtained a contested judgment in Ontario, each contained a forum clause confirming that all proceedings between the parties “related to the subject matter of this Agreement” may be commenced in Ontario, at Perlman’s sole discretion. The Loan Agreements were drafted by the CEO of WBC, who owned 95% of the Preferred Shares of WBC, and, through that shareholding, exerted “voting control” over WBC. It was not contested that the CEO lived in Barrie, Ontario.
Second, there was no doubt that WBC carried on business in Ontario. WBC had represented to the public and investors for years that it conducts business out of an office in Barrie, Ontario. In its public disclosure, WBC referred to this Barrie office as its “principal executive office”, its “formal business office” or its “principal place of business.” During the relevant period, WBC’s website displayed the Barrie address. On January 26, 2023, WBC issued a press release advising of its new headquarters location in Toronto, and signed an indemnity to the landlord for any amounts owing by its subsidiary under the Toronto lease.
The Court found that, based on extensive public filings and representations, WBC carried on business in Ontario. It may have done so improperly or illegally (if it was never registered or licensed in Ontario) but there was, nonetheless, no doubt that it carried on business there.
Third, with respect to assets in Ontario, Perlman argued WBC owned assets—being the shares of its subsidiaries—in Ontario. Fourth, there was no question that WBC’s debts were incurred while conducting business in Ontario. Those debts were confirmed by the Court, and remain outstanding. In such circumstances, the debtor is deemed to carry on business within the jurisdiction of the court until the debts have been satisfied, and a creditor has the right to file a petition in the Province of Ontario on the basis that the debtor is carrying on business here.
In the Court’s view, there was an overwhelming preponderance of evidence linking WBC to Ontario, and no basis to stay or strike Perlman’s application. As such, the Court dismissed WBC’s motion and held that Perlman was entitled to his costs of the motion.
Judge: Justice Black
Counsel: Josh Suttner and Shaun Parsons of Aird & Berlis for Charles Perlman; Matthew Harris for Winning Brands Corporation
satter
4 weeks ago
Lmfao, after two weeks, Eric finally found $100 or so to renew his domain name.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175223185
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175161449
He has been taken to bankruptcy court where if he loses (?), the court will declare WNBD bankrupt.
He was most likely evicted from his office/warehouse location for non-payment. Does he even have an office/warehouse now?
He said operations whatever those were, are paused.
Even if he is successful with that bankruptcy challenge, and more likely than not he will be, he seems insolvent (bankrupt), penniless.
He has a motion in the bankruptcy challenging the jurisdiction that the application is brought in the wrong country/jurisdiction, claiming his office is not in Canada, I suppose. That court hearing is coming up soon. I see his chances on that as slim.
Nothing more than a major miracle can save this. Why did this happen? In my opinion, it all goes back to the GestureTek acquisition, which I warned about from the get-go and was bashed for it.
Eric has misled, and misrepresented so many things. Take all his pumping, bragging on the GestureTek IP and Patents he claims he acquired. First, it does not appear any of been legally registered with the USPTO. Once a sale is concluded, the change of ownership must be registered in writing and notarized. If it was it's not showing on their website, that's all I can say. If right then Technically or not even Technically WNBD does not own any. However not a lawyer, just saying not one Patent on the official website of the US government is showing as registered to WNBD.
Once the patent sale is concluded, the change of ownership must be registered with the USPTO. The assignment of patent rights must be in writing and notarized.
jollyjack
2 months ago
Every so often I check in to see how the WNBD train wreck is coming along. Not at all surprised to see where the company is now at, with Eric Capt. RS, at the helm of his own private, now empty, piggy bank. Now the chickens have come home to roost, and despite flogging, the dead horse is now dead in the water. There is no positive outcome for WNBD here, as no one in their right mind will take the company on as a going (sic) concern, its most likely that the intellectual property etc. associated with their products will be sold off to the pay creditors, and the company folded. its a bit late to say DYOR (heck its not as though posts on this board didn't shout buyer beware) , however GLTA. Jollyjack
satter
2 months ago
Off the ignore list. Eric has gone silent and does not know what to say. He had to move from his office location, likely due to nonpayment, asked to leave, evicted.? He could be hiding from people looking for payments. That is speculation and could very well be not true, but it's a possibility.
The audits for me were BS. Audits are expensive, likely did not have funds for it, and they would not change anything. The only thing that would, would be a whole lot of funding but where would that come from? He was defaulting on the creditor that filed the bankruptcy application. In the Niagra Mist bankruptcy application, it reported tax arrears of $330,363.08. That is owing to the Government and is substantial.
He has lenders but the problem is, I suspect he just continually asks for more to borrow while none gets paid back. If this is true, at some point those lenders put up the stop sign saying no more until you start paying back.
I won't say there is no hope but will say there's little hope. If he could have borrowed to make a deal with this creditor that be one thing, but it did not happen. I have no doubt Eric ran to whoever he could to try to borrow and no one stepped up to the plate. The lender/creditor surely would have considered some reasonable offer versus getting maybe nothing from this possible bankruptcy and it did not happen. For me, it's a sign lenders with exposure are coming to grips with taking their loss and not willing to sink another penny with Eric.
satter
2 months ago
Kutter: Show him my post, this one please -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175017044
And this one, please.
Please note that WNBD is not Bankrupt. They did not file for Bankruptcy. A creditor has petitioned the court asking the court to declare WNBD Bankrupt. Eric did contest the application so this won't be decided till next year sometime.
I am not saying this as Mr basher, I do not think Eric has much chance of success here. I am trying to give a fair take on this by saying it's not a done deal, that Eric has contested it. I think in the end the court will grant the application and I think they can deal with it despite the Corporation being Incorporated in the US. Eric resides in Ontario, the Corporate office is in Ontario, and assets mostly are in Ontario as far as I know. However, it is the Court's decision, in the end.
The fact that Eric is no longer at the office location that he moved to, that he has not told anyone, has not disclosed about the bankruptcy application are factors I believe that there are deep troubles going on.
satter
2 months ago
I included in my post the link to your post where you said.
What I've read is the court case and everything. My take is that these are separate from WNBD and incorporated under their separate enities such as GersterTech or Niagra Mist.
You made the following complaint ( below ) about incomplete post, no link, etc, yet I was just pointing that I posted more than you did with your info you supplied that included no link to your full filing nor even the court file. We have no idea even what court case you read. I was OK though with what shared as it was done with good intentions.
How come you can post snapshots, and make claims yet you can't post a link to the full filing? So far nothing to go on but your incomplete posts
In any case, hope that clears it up for you.
It would have been much better if Eric would have shared this with his shareholders. I waited sometime before posting hoping he would be responsible. People have the right to know.
He posted this once on Twitter, that if there were any setbacks, he would and will let people know, that he does not play games with people's hearts, minds, and money. Respect matters.
That does not appear to be the case. Enjoy the rest of weekend. Take Care.
Hello Nate - I can assure you that if there were any setbacks, any doubt in my mind, or any remaining material unmanageable uncertainty about the Tech Div acquisition, I would and will let people know. I don't play games with people's hearts, minds and money. Respect matters. https://t.co/2evDeXUPb5— Eric Lehner (@WinningCEO) August 1, 2021