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Court File No.

CV-18-606163-00CL

ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)

B E T W E E N:

FRANK STRONACH and ELFRIEDE STRONACH

Plaintiffs

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BELINDA STRONACH IN HER PERSONAL CAPACITY AND IN HER CAPACITY AS


TRUSTEE OF THE BELINDA STRONACH 445 FAMILY TRUST, THE ANDREW
STRONACH 445 FAMILY TRUST AND THE 445327 TRUST; ALON OSSIP IN HIS
PERSONAL CAPACITY AND IN HIS CAPACITY AS TRUSTEE OF THE ANDREW
STRONACH 445 FAMILY TRUST AND THE 445327 TRUST; FRANK WALKER IN HIS
CAPACITY AS TRUSTEE OF THE BELINDA STRONACH 445 FAMILY TRUST AND
THE ANDREW STRONACH 445 FAMILY TRUST; NICOLE WALKER IN HER CAPACITY
AS TRUSTEE OF THE BELINDA STRONACH 445 FAMILY TRUST AND THE ANDREW
STRONACH 445 FAMILY TRUST; and STRONACH CONSULTING CORP.

Defendants

STATEMENT OF DEFENCE
OF STRONACH CONSULTING CORP.

1. The Defendant Stronach Consulting Corp. (“SCC”) admits paragraphs 2, 3, the first
sentence of paragraph 12, 14, 17, 18, the first sentence of paragraph 20, the first three sentences of
paragraph 31, 41, and 53 of the Statement of Claim.

2. The remaining paragraphs in the Statement of Claim, to the extent they relate to SCC, are
either incomplete or inaccurate and so are denied.

A. ROLE AND INTEREST OF SCC IN THIS LITIGATION

3. SCC’s primary concern is to enhance the value of the SCC group of companies, which are
one component of the overall Stronach Group enterprise (“The Stronach Group” or “TSG”). The
Stronach Group is a group of companies and other entities that hold assets and carry on various
businesses, for the benefit of their stakeholders.
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4. TSG currently includes four main lines of business: racing and gaming, real estate
development, agriculture, and Thoroughbred racing and breeding:

(a) Racing and Gaming: Within its Racing and Gaming Group (“RGG”), TSG owns
and operates racetrack properties and training centres across the United States. It
also owns and operates technology and content companies in the racing and gaming
area.

(b) Real Estate: TSG also holds extensive real estate. Among other things, its real
estate group focuses on converting excess RGG real estate into
commercial/residential mixed-use facilities.

(c) Agriculture: TSG’s agriculture business (“AG”) includes cow/calf raising and
breeding, a slaughterhouse, beef distribution, and land holding and management.

(d) Thoroughbreds: The Thoroughbred racing and breeding operation (“TBR”)


acquires and breeds stallions and broodmares, and maintains a racing stable and
farm land.

Entities within the TSG enterprise also engage from time to time in other business and commercial
activities, as described below.

5. The plaintiffs define TSG as comprising the entities set forth in Schedule A to the
Statement of Claim. SCC denies that this list accurately represents the TSG enterprise. Many of
the entities listed in Schedule A fall within different and distinct legal structures (including
corporations, trusts and limited partnerships). Certain of these entities are neither direct nor indirect
subsidiaries of SCC.1

6. Three holding companies below trusts settled for members of the Stronach family (the
“Family Trusts”) indirectly hold about 95 percent of SCC’s common shares. The Family Trusts
consist of:

(a) the 445327 Trust (the “445 Trust”), the beneficiaries of which include the Plaintiff
Elfriede Stronach (“Elfriede”);

(b) the Belinda Stronach 445 Family Trust (the “Belinda Trust”), the beneficiaries of
which include Belinda Stronach and her children Nicole and Frank Walker; and

1In this pleading. TSG refers generically to the group of corporations, trusts and entities owned by or for the benefit of the
members of the Stronach family. Statements regarding TSG entities which are not direct or indirect subsidiaries of SCC are based
on information of which SCC has knowledge. They are made because they are relevant to and inform the matters here at issue
and do not indicate that SCC has control, either direct or indirect, over each entity.
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(c) Andrew Stronach 445 Family Trust (the “Andrew Trust”), the beneficiaries of
which include Andrew Stronach (“Andrew”) and his daughter Selena Stronach.

7. The Plaintiff Frank Stronach (“Frank”), who is 86 years old, is neither a trustee nor a
beneficiary of any of the Family Trusts.

8. SCC’s senior executives are Belinda Stronach (“Belinda”), who is the Chairman and
President, and Alon Ossip (“Alon”), who is Chief Executive Officer. Alon’s status at SCC and his
ownership interest in certain TSG entities are addressed further below.

9. SCC has several interests in this action:

(a) As the Statement of Claim asserts, SCC is the “principal business entity that owns
and operates a number of important assets of The Stronach Group, either directly
or indirectly.” SCC’s interest is in maximizing the overall value of the SCC group
of companies for the benefit of its stakeholders.

(b) SCC is the main, and in some cases only, repository of documents and facts relevant
to this litigation, including of other TSG entities and the Family Trusts. SCC’s
documents and the testimony of its employees and consultants will be essential to
the determination of the issues in dispute, including in relation to the involvement
and treatment of Frank in the period from 2010/2011 to date.

(c) The Statement of Claim asserts that SCC has itself committed certain wrongful acts.
SCC responds here to the specific allegations made against it in the Statement of
Claim and to other allegations within its knowledge by reference to what it
considers to be objectively demonstrable facts.

10. SCC does not respond to the allegations in the Statement of Claim that relate to events at
the owner/trustee level, or to the interactions between and among, or states of mind of, the various
members of the family and trustees at that level.

11. The corporate and trust structures that form and were implemented by TSG, of which SCC
forms a part, were and are not, and were never intended to be, a sham in any manner at any time,
as the Statement of Claim appears to assert. The directors and officers of SCC and the various TSG
entities at all times carried out and continue to carry out their functions in accordance and
compliance with their legal duties and responsibilities. The employees appropriately take direction
from those directors and officers.
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B. SCC’S RESPONSE TO THE POSITION OF THE PLAINTIFFS

12. The Statement of Claim relates principally to the manner in which Frank alleges he was
treated from 2010/2011 to the present when he sought to be involved in running the TSG
enterprise. Although she is a plaintiff, Elfriede does not assert in the Statement of Claim that she
was ever involved in running SCC or the overall TSG enterprise. Nor does she appear to seek such
a role now.

13. The thrust of the Plaintiffs’ position is that Frank was, at various times, excluded from
various TSG businesses, disrespected, deprived of financial information and denied the control
that he asserts was rightfully his (which SCC denies). Frank also alleges that the TSG business
was not managed properly by those who were and are in charge. He seeks through this litigation
to take control of the entities listed in Schedule A to the Statement of Claim.

14. Contrary to the allegations in the Statement of Claim, the documents and evidence
available to SCC show that Frank had significant involvement in the running of TSG. He received
information he requested, and, for several years, his recommendations and actions relating to areas
outside of TSG’s core RGG business were generally accepted, adopted or ratified by TSG
management. However, Frank’s various projects, interests and initiatives outside of TSG’s core
RGG business led TSG to expend and lose hundreds of millions of dollars.

15. On the documents and evidence available to SCC, senior executives, including Belinda and
Alon, treated Frank with respect and deference consistent with his role as founder. Further, they
made reasonable and appropriate decisions in the areas and on the issues within their control.

16. At the heart of the Statement of Claim is the question of who should be running SCC, and
presumably certain other TSG entities, going forward. The choice offered is between Frank, whose
spending initiatives are detailed in this Statement of Defence, and the experienced and professional
management team currently in place, led by Belinda.

17. Input from the “owners” of SCC will be critical to answering this question. The indirect
majority owners of SCC are the main beneficiaries of the Belinda Trust: Belinda, Nicole Walker
and Frank Walker. The next generation of owners consists of Belinda’s children, Nicole and Frank
Walker (named as Defendants to this claim), and Andrew’s daughter, Selena.
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18. As reflected in the Unanimous Shareholder Agreements referred to in paragraph 64 of the


Statement of Claim, Alon also owns approximately 5 percent of certain assets of the TSG
enterprise outside of the trust structure described above (a fact contested in the Statement of
Claim).

19. SCC anticipates that the various owners will weigh in on their choice and preferences.
However, it is clear from the Statement of Claim that if Frank assumes control, he intends to
resume his past spending approach and to revive several business initiatives that have caused TSG
to lose extraordinary amounts of capital in a short period of time.

20. The Plaintiffs assert in the Statement of Claim that decisions made by SCC were not in
accordance with “sensible and prudent commercial practices”. SCC denies this allegation. In
contrast and as detailed below, Frank sought to prevent the company from accepting or applying
the very standards he now asserts should govern. The facts demonstrate that it was the efforts of
Belinda, Alon, former Chief Financial Officer John Simonetti (“John”) and others to have Frank
apply those same standards in the areas of the business that interested him that led ultimately to
this litigation.

21. Several of the allegations central to the Statement of Claim relating to events at SCC and
TSG are simply incorrect. On the basis of the documents and evidence available to it, SCC pleads
the following facts:

(a) Frank played a meaningful role at and had significant input into the business in the
relevant period;

(b) Frank and Elfriede and their counsel regularly received financial information and
disclosure from members of TSG management regarding the steps taken in the
various businesses;

(c) information regarding TSG’s financial situation was not concealed from Frank;

(d) Frank was at all times generally aware of the financial situation of SCC and the
various TSG entities;

(e) Belinda did not misappropriate funds of any TSG entities or incur expenses
improperly;

(f) Alon and Belinda conducted themselves as diligent and prudent corporate
executives in the running of the business;
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(g) SCC is not party to, and did not breach, a letter agreement dated May 23, 2017; and

(h) steps taken by SCC and various TSG entities since 2017 to improve the financial
position of their enterprises were commercially sensible, and in the best interests of
the TSG entities and their stakeholders.

C. BACKGROUND

22. The Statement of Claim discusses at length the growth and accomplishments of Magna
International Inc. (“Magna”) and Frank’s role in that success. While Magna was and is a very
successful business, Frank was required while at Magna to operate within public company legal
constraints, including in relation to board governance, audits and securities regulatory oversight as
well as capital markets scrutiny and discipline.

23. One constraint related to Frank’s spending on ventures outside of the auto parts business.
While at Magna, Frank initiated a number of such projects. Almost all were unsuccessful.
However, because of its status as a public company, Magna was able to limit its losses, including
through a forbearance agreement that prohibited investment above a certain level in non-
automotive operations.

24. Upon completion of the transactions described in paragraphs 39 to 45 of the Statement of


Claim, Frank and members of the Stronach family, the entities that comprise TSG, and their
respective directors, officers and trustees, became subject to different legal regimes.

25. In his 2012 book The Magna Man, Frank describes how he viewed this change: “Freed
from the constraints imposed by the regulations governing public companies, I’ll be able to run
much faster and with fewer strings attached.” He also stated, among other things, “I have plenty
of resources at my disposal” and “I have nothing holding me back.”

26. On the documents and evidence known to it, Frank largely acted in the manner suggested
in the book. He wanted TSG entities to invest funds in various ventures on his recommendation
without accountability or discipline and without regard for the standards of prudence and
commercial sensibility he refers to in the Statement of Claim. Even when ventures were not large
at the outset, he encouraged TSG to expand and direct money into these ventures when the
objective evidence indicated it would be “good money after bad”. The facts regarding Frank’s
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spending patterns are set forth by SCC in this Statement of Defence so that they can be addressed
by the parties and the Court in the context of decision-making regarding the operation and
management of SCC and TSG going forward.

27. The initiatives that attracted Frank’s attention varied over time. Prior to and during the
early years of TSG, Frank focused his attention on the purchase of large tracts of land, mostly but
not exclusively in Florida. Frank had only sporadic or intermittent involvement in RGG. As
described below, RGG operations had not been profitable for over a decade under Frank’s
supervision. Belinda, Alon and Timothy Ritvo (“Tim”), RGG’s Chief Operating Officer, focused
on reorganizing RGG and making it profitable. Their changes resulted, among other things, in
increased management professionalism, a more stable workforce, and a significant improvement
in EBITDA.

28. From 2010/2011 on, Frank increased his focus on the various non-RGG businesses and
initiatives detailed below, some but not all of which are referred to in the Statement of Claim. On
Frank’s recommendation, TSG invested almost US$850 million on Frank’s various businesses,
with hundreds of millions of this amount likely being irretrievably lost.

29. As reflected in documents and records maintained by SCC, certain family members also
gifted or loaned Frank substantial amounts from their trust distributions for him to use on various
initiatives, including his unsuccessful foray into Austrian politics and to pay Canadian and
Austrian tax liabilities.

30. With respect to the allegations that Belinda received improper payments, based on the
documents and records maintained by SCC, Belinda and her children received distributions from
the Belinda Trust in smaller percentages than their ownership interest. Since the trust structure
described below was established in 2013, they have gifted more money to Frank for his personal
use than either Elfriede or Andrew and his daughter. SCC provided detailed information on this
issue to Frank and Elfriede and their respective counsel in 2018, well before the issuance of the
Statement of Claim.

31. All family members and Alon were aware of investments and expenditures recommended
by Frank. Although SCC sought to constrain Frank’s spending without offending him, he was
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accommodated in part on the basis of his repeated assertions that profitability was close at hand.
This was tenable so long as (i) there was substantial cash remaining in the business, (ii) he
continued to assert that his recommendations would be profitable and provide reasonable return to
stakeholders and (iii) he left SCC and TSG management largely alone to run RGG. However, in
the last part of 2015 and into 2016, with free cash in the business becoming depleted, circumstances
changed. Frank became more intrusive at RGG, including by reaching out to employees and
external stakeholders without informing or consulting with RGG’s executive leadership. This sent
mixed messages to employees and the industry and harmed RGG’s reputation. At the same time,
Frank sought to have TSG expand and accelerate spending on other businesses, particularly AG.

32. Frank was advised many times by various SCC employees regarding the poor cash position
and financial results of the various business enterprises. Alon sought to rein in Frank. However,
for reasons discussed below, this became primarily Belinda’s responsibility by the end of
2016/early 2017.

33. In the period up to and including 2017, Belinda attempted to accommodate Frank’s
involvement with prudent and sensible decision-making regarding SCC and the TSG business.
However, by 2018, this accommodation became impossible to sustain. Frank continued to demand
funds and the freedom to proceed with projects that were manifestly uneconomic and
unsustainable.

34. The Statement of Claim makes allegations regarding TSG’s “liquidity issues”. These relate
to near-term funding challenges and not to TSG’s overall long-term financial health. The RGG
business, in particular, had and has a healthy positive cash flow. However, by 2017, Frank’s
non-RGG projects had consumed a substantial amount of TSG’s free cash, including proceeds
from the sale of substantial real estate assets acquired in 2011 from MI Developments Inc.
(“MID”), leaving an insufficient amount to cover the ongoing losses in the non-RGG businesses,
and hindering the funding of trust distributions. In constraining spending on Frank’s “passion
projects”, as they came to be known internally, Belinda, Alon and TSG management sought to
address that reality.

35. SCC and TSG continue to have significant and valuable assets. The RGG business is now
well-run by professional and experienced management and will continue to generate substantial
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returns. As of early 2018, TSG has established a real estate development division, focused
primarily on the conversion of RGG real estate into commercial/residential mixed-use facilities,
with the goal of providing sustainable long-term wealth and cash flow for TSG. However, effective
implementation of this strategy will require expenditures in the near- and mid-term.

36. SCC pleads that it was obliged to take action, through management, to address the loss of
cash resulting from Frank’s initiatives in relation to the non-RGG and non-real-estate businesses.
The taking of those actions has resulted in this proceeding.

D. SCC

37. SCC was incorporated in 2004 under the laws of Ontario. Eventually, SCC became an
operating corporation through which TSG carried on business, with subsidiary corporations
carrying on different aspects of RGG and other businesses.

38. Contrary to the allegations at paragraph 51 of the Statement of Claim, SCC engaged
directly with Magna to provide consulting services. It has no legal or contractual obligation to pay
Frank for services provided by SCC.

E. THE FAMILY TRUSTS

39. Although SCC takes no position in response to claims asserted at the trust level, as part of
establishing the facts at issue in this litigation, SCC asked the law firm that acted for TSG and the
family members to provide a memorandum setting out the salient facts. All family members and
their counsel have received a copy of that memorandum.

40. The memorandum indicates that each of the Family Trusts holds its interest in TSG through
a holding company. The Belinda Trust holds through BSF Trust Holdings Inc., the Andrew Trust
holds through ASF Trust Holdings Inc., and the 445 Trust holds through 445 Trust Holdings Inc.
These holding companies own the common shares of 445 Family Holdings Inc. (“445 Family”) in
the following proportions:

BSF Trust Holdings Inc. 40,440 67.46%


ASF Trust Holdings Inc. 13,860 23.03%
445 Trust Holdings Inc. 5,700 9.51%
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41. 445 Family currently owns all of the common shares of 445327 Ontario Inc. (“445327”),
which indirectly holds 95 percent of the common shares of SCC.

42. The memorandum also indicates that in 2013 Frank was aware of and in agreement with
terms that would provide Alon with a 5 percent equity interest in certain assets in the TSG business.
Detailed agreements reflecting these terms were executed in October 2013.

43. The beneficiaries of the Belinda Trust include Belinda, Nicole Walker and Frank Walker.
As a result of the structure described above, they own beneficially approximately two-thirds of the
structure under 445327.

F. THE EARLY DAYS OF TSG

44. By mid-2005, a company called Magna Entertainment Corp. (“MEC”) had acquired
various racetracks and other gaming properties. MEC was controlled at that time by MID, a public
company controlled by the Stronach Trust through multi-voting shares. As at November 2010,
Frank was CEO and Chairman of the Board of MID.

45. In the period 2005 through the end of 2010, neither Alon nor Belinda played any role in
the business of MEC. Frank served as Chairman of MEC throughout most of this period, and
intermittently served as interim-CEO due to frequent chief executive turnover.

46. MEC did not make a profit in a single year after 2002. It ultimately filed Chapter 11
proceedings in the U.S. in March of 2009. The Chapter 11 proceedings addressed the debt of MEC
but cost MID a significant amount of money, and there were ongoing disputes with MID
stakeholders.

47. The directors and executive management of MEC in the period before the end of 2010
changed constantly. At the end of 2010, MEC did not have a competent senior management team
in place.

48. As part of the transactions described generally in the Statement of Claim, TSG received
the former MEC racing and gaming assets, together with cash and certain lands of MID. At the
time, the number of employees and infrastructure at TSG was very small. TSG was ill-prepared to
run a business of a significant size.
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49. Frank asked Alon to join TSG to assist in running this new business. Alon had previously
led the Magna and MID transactions on behalf of the family. Alon effectively ran the enterprise
from the outset, focusing initially on the major tasks of leading the management team and
implementing systems as well as fixing and running the business. In late 2011, Frank and Belinda
asked Alon to become the CEO of TSG. The appointment was announced to the organization in
February 2012. In 2011, John (who was a former Magna and MID employee also involved in the
MID transaction) joined TSG as Chief Financial Officer and worked with Alon in implementing
these measures.

50. Frank had long familiarity with both Alon and John. He frequently asked for and obtained
from them and others the financial information or documents that he wanted. Frank has never been
a user of email, and he was often traveling in Austria and elsewhere, so briefings and discussions
occurred in person, by phone or through documents sent to his various assistants.

G. THE RGG BUSINESS

51. At the time it was established, TSG’s primary focus was RGG. The racing and gaming
business was and is highly complex as a result of, among other things, the numerous sources of
revenue, differing laws and regulations relating to racing, gaming, labour and the environment in
different jurisdictions, political factors and the competitive landscape. TSG determined that past
MEC management had not understood or appreciated the complexity of this business, explaining
at least in part why MEC had never made money.

52. Starting in early 2011, Alon worked to understand and analyze the RGG business. The
learning curve was steep, and the process was complicated. Alon spent hours meeting with and
listening to people knowledgeable about this business, including Tim Ritvo, the general manager
of Gulfstream Park (“GSP”). Tim eventually became a key part of the restructuring of RGG as
Chief Operating Officer of RGG.

53. In this early period, Belinda acted as a sounding board for Alon and Tim in the RGG
business. She gave the final go-ahead for material decisions and strategies. Later on, she became
progressively more involved in the day-to-day details of the operations.
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54. The RGG turn-around involved a number of steps. Steps taken included changing and
training personnel, cutting costs, dealing with litigation and other issues remaining from the MID
transaction, purchasing and developing strategic assets, re-negotiating key contracts and
relationships, and changing the culture of the company. This description is an extreme over-
simplification of the turn-around. It was a multi-faceted approach that demanded careful planning
and execution. However, the improved performance of RGG shows the result. RGG moved from
an insolvency in 2009 (at MEC) to improved revenue and positive EBITDA.

55. From 2011 to the end of 2016, Alon spent most of his time on the RGG business. He spent
considerable time in Florida, a major base of the RGG operation, including GSP, Palm Meadows
and later Gulfstream West.

56. In the same period, Frank was largely focused on non-RGG interests and initiatives,
including: his political aspirations in Austria, Bionx (a maker of e-bike conversion kits), Elby, the
development of the golf course and real estate development in Ocala, Florida ultimately called
Adena Golf & Country Club (“AGCC”), the Thoroughbred breeding operations and racing stable,
and the establishment of AG, including Adena Foods and related retail/commissary projects. Frank
was only sporadically involved at RGG, although he pursued certain projects which had an impact
on RGG. These included the commissioning of two enormous bronze statues of Pegasus the horse
and a dragon, one of which was eventually erected at GSP at a cost that far exceeded the potential
benefits, if any, for GSP. The second statue was manufactured and never erected. Frank also
focused on setting up a “horse racing league” that became a costly failure.

57. Frank provided input to Alon and Tim and recommended certain people and projects.
However, his involvement often had a disruptive effect. He would purport to enter into
commitments without appreciating their ramifications, and TSG management would have to
address the consequent problems that arose. At times, TSG management would make clear that
Frank’s ideas in relation to RGG and other areas of the business could not or should not be
implemented due to financial or logistical constraints. Despite this, and even after discussions with
him concluded in consensus not to pursue an idea, Frank would continue to raise the same idea
days or weeks later, as if previous meetings and discussions had never occurred. In the latter years,
he also became increasingly volatile in temperament when these issues arose.
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58. It became clear to senior management at TSG, including Alon, Belinda and Tim, that Frank
would not engage sufficiently in the details of the RGG business. Alon, Belinda and Tim would
nonetheless constantly update him with respect to their plans for RGG.

59. The approach of SCC and TSG was to accord Frank respect due to his role as founder and
Honorary Chair, and to manage him rather than attempting to discipline him in the manner they
would have treated a regular employee. Alon, Belinda and Tim did their best to elevate Frank’s
public profile and his personal brand in the RGG world. Under their watch, Frank was put forward
as Honourary Chairman of RGG at awards ceremonies and he received more accolades from
horsemen and other stakeholders than ever before.

H. FRANK’S PURSUIT OF NON-RGG INTERESTS

60. Projects initiated or expanded on Frank’s urging caused TSG to expend almost US$850
million in cash and liquid assets. In the period from 2011 to 2016, he insisted that TSG’s officers
and directors facilitate these ventures and, especially in the later years, he attempted to pursue
them against their advice and without their approval. For several years, Alon, Belinda and others
in TSG management acceded to and approved his requests and recommendations based on respect
for him as founder, his vision, his constant reminders that he was the original source of TSG’s cash
and his assurances that viability would soon be demonstrated.

61. In pursuing the non-RGG interests, Frank did not work with TSG to prepare, commission
or require documentation such as business plans, feasibility studies, or due diligence, and did not
seek to hire qualified or experienced professional management. When professional management
was made available to him, he frequently rejected their professional opinions. He preferred and
intended that steps be taken and commitments made on his say-so alone. He reassured TSG
management that his non-RGG interests would be profitable.

62. TSG management, including Belinda and Alon, were faced with the choice of embarrassing
Frank by advising third parties that they did not have valid or binding commitments, or attempting
to regularize commitments he made after the fact. For several years, the latter course was
frequently chosen. Alon and Belinda repeatedly sought to impress upon Frank the reasons he
should not or could not proceed in this fashion and the harm he was causing, with limited success.
Eventually, this situation became unsustainable, as described herein.
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63. Further, Frank ignored TSG employees who provided information or input that did not
support his ideas. He would frequently berate and, on occasion, purport to fire them. This conduct
had a number of unfortunate consequences. It resulted in the loss of a number of strong and
competent managers and employees who had options elsewhere, resulting in additional expense
and disruption for TSG. It also resulted in extensive litigation costs, particularly in AG.

64. As an example of the problems created by Frank’s approach to planning, the AG business
encountered costly and complicated issues in north Florida in relation to, among other things, the
water needed for the cattle farms and slaughterhouse established by Frank, and the lower protein
content of Florida grass. The failure to plan for water supply, road access and related ancillary
infrastructure created delays and many millions of dollars in unnecessary expense.

65. The lack of business planning meant that Frank embarked on several ventures with no
understanding of whether the fundamentals of the venture worked. Frank recommended that TSG
management initiate ventures in E-bikes, medical devices, pumpkin seed oil, the soccer player
transfer market, a commercial air travel business, and trading gold. As stated above, he attempted
to found a “horse racing league”. Most significantly, at enormous cost, he built AGCC as a golf
course/country club/real estate development near Ocala, Florida.

66. Each of these initiatives resulted in financial failure or has only generated losses to date.
The initiatives that were restructured or closed were clearly not viable. SCC is working to establish
the viability of the remainder. In the years after 2011, Frank’s influence led to TSG spending, and
losing, millions in trust equity otherwise held for the family beneficiaries. The chart of Frank’s
non-RGG initiatives set out below shows in summary form a partial recap of the expenditures:

Initiative Amount spent (in millions, US$)

Agriculture & Foods (AG) 324.1

Thoroughbred operations (TBR) 156.9

Adena Golf & Country Club (AGCC) 117.8

E-Mobility 90.7

Pegasus I/II statues 55.4


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Adena Grill / Frankey’s (restaurants at GSP) 26.4

Magnolia (Racino & other) 42.9

Select other projects (as described below) 29.7

TOTAL 845.8

67. The losses described above do not include a further CAD$134.6 million in distributions
gifted or loaned to him by beneficiaries.

68. When Frank refused to acknowledge the failure of or problems experienced by these
ventures, and wanted instead to expand and increase spending on them, officers, directors and
employees of TSG were obligated to stop him from doing further damage.

69. In addition to the unsuccessful ventures described in this Statement of Defence, Frank
wanted to proceed with a host of other initiatives and projects, including, but not limited to, the
following:

(a) in retail food, a buildout of retail stores and a butcher shop;

(b) in food processing, a commissary and pet food facility;

(c) in other agricultural projects, dairy farming, a creamery, a pork facility, spring
water, chicken operations, a greenhouse and a fish farm;

(d) at AGCC, townhomes, a hotel, an equestrian centre and a spa/medical clinic; and

(e) in other areas, a 5D theatre inside the Pegasus statues, Pegasus Park (including the
Flex Theatre, a pony barn and rides, a horse museum, a roller coaster and carousel)
a pony farm, and an amusement park at the Austrian Racino.

70. These initiatives would have resulted in very large costs at a time when the existing non-
RGG businesses were losing substantial sums of money. Belinda and management brought an end
to these initiatives.
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I. EFFORTS TO BRING FISCAL DISCIPLINE RESULT IN BREAKDOWN OF


RELATIONSHIP WITH FRANK

71. By late 2016, spending on Frank’s unsuccessful ventures and initiatives had become
untenable for TSG. Alon, Belinda and John (who was CFO at the time) sought to find a
compromise solution that Frank would find acceptable. Effectively, they were trying to protect
RGG (as the generator of cash that was essential for the future of TSG), while allowing Frank to
“play” (to use his word), meaning to spend within reasonable limits on his passion projects in the
agriculture/food, golf and Thoroughbred racehorse businesses.

72. Contrary to the allegation in paragraph 106 of the Statement of Claim, the fall of 2016 was
not the first time that Frank learned that TSG was facing liquidity issues. He had been advised
repeatedly by several employees, including Alon, Belinda and John, that his many initiatives were
depleting cash within TSG. He consistently refused to alter either his plans or his conduct despite
these warnings.

73. Alon ultimately sent a detailed letter dated December 26, 2016 to attempt to find a way
forward with Frank. Frank did not respond to the letter nor did he sit down to meet and talk with
Alon. Just before the end of December 2016, the relationship between Alon and Frank totally broke
down in a telephone call. Frank alleges that Belinda and Alon treated him with disrespect and
engaged in acts of impropriety in this period. Based on the documents and information available
to SCC, there is no basis for these allegations.

74. After the collapse of the relationship between Alon and Frank, Belinda attempted to deal
with Frank on numerous issues, including his treatment of Alon. In conversations and in texts and
emails in late December 2016 and early January 2017, Belinda set forth a respectful but firm line
to try and address the situation rationally.

75. Frank demanded at this time that Alon be removed as CEO. Belinda was able to prevail
upon Alon to accept a suspension. He would remain available to her (which was important in light
of his extensive knowledge of TSG’s businesses, particularly RGG, and his experience in tax
planning matters and advising closely held companies) and, as importantly, he would not exercise
his “put” right to have his approximately 5 percent interest bought out. Alon also remained as a
- 17 -

director and officer on numerous entities throughout the TSG structures, with most of his post-
suspension involvement in those entities being as a director.

76. These were tremendous benefits to TSG, implemented by a resolution of SCC signed by
Belinda and John. Under the resolution, Belinda was to consult with Frank on reaching a deal with
Alon, which she did. Frank was aware of Alon’s continuing involvement in TSG in the spring of
2017. Although Frank expressed displeasure with Alon, he had no constructive suggestion to avoid
the potential harm to TSG if Alon were alienated from the business. Based on the facts known to
SCC, there was no logical or tenable basis for Frank’s position at the time that Alon or Belinda
had engaged in any misconduct regarding this or any issue.

J. EFFORTS AFTER 2017 TO IMPROVE SCC’S FINANCIAL POSITION

77. By the end of 2016, Frank had engaged his current litigation counsel. Belinda thereafter
retained her own separate counsel. Sometime in 2017, Frank through his counsel arranged counsel
for Elfriede and Andrew. As the months passed, Nicole and Frank Walker and Selena also retained
counsel. To the knowledge of SCC, Alon did not retain counsel until after the issuance of the
Statement of Claim.

78. The family members held numerous discussions. TSG participated in some aspects of these
discussions. It is unclear from the Statement of Claim the extent to which these discussions were
covered by settlement privilege. SCC therefore addresses below only (i) the steps that were taken
by it to assess the various businesses, including the experts and others retained to assist, as well as
the implementation of steps with respect to those businesses; (ii) the facts and documentation
gathered and provided to all of the family members and their counsel with respect to the
distribution of funds by TSG to the Family Trusts (as one of the early allegations made by Frank
was that Belinda and her children had taken more than they were entitled to under the trust
structures); and (iii) the steps taken to provide information regarding the businesses to the family
members, including Frank, in their counsel.

(i) Steps to Assess TSG’s Businesses

79. Over the years, TSG management would prepare annual budgets and quarterly reviews, as
well as conduct other reviews of the various businesses from time to time. For example, Alon
- 18 -

implemented what was referred to internally as a “stoplight” system that provided detailed
information as to the issues and plans for each business unit. In addition, due to the highly regulated
nature of the RGG operations, RGG was subject to a rigorous audit process in connection with its
financial results. However, there were three main problems in the non-RGG businesses with
respect to oversight and use of these standard business tools. First, Frank did not review, use or
abide by them, but rather would seek to make spending and hiring/firing commitments as he
decided, often without prior discussion with TSG management. Second, in the non-RGG
businesses, for various reasons, including the turnover and competence of managers recommended
by Frank, cost estimates were almost always, if not always, exceeded and EBITDA projections not
met. Third, Frank resisted obtaining and/or following expert or third party advice with respect to
the various non-RGG businesses.

80. In 2017, the management team now actively headed by Belinda conducted thorough
reviews of all TSG businesses, with the assistance of outside experts. SCC continued to advise the
family members of the results of these reviews and of its intention to implement sensible strategies
for the businesses based on the available information. These strategies required acknowledgement
of the lack of viability of some of the businesses inside TSG. SCC management in attendance
observed that in family discussions in September 2017 and March 2018, Frank would not
acknowledge those realities and disagreed with the decisions taken.

(a) The AG Business

81. As of late 2018, the AG business (currently consisting of cow/calf raising and breeding, a
slaughterhouse, beef distribution, and land holding and management) has incurred cumulative
EBITDA losses approaching US$50 million. On numerous occasions, Frank told TSG employees
of his vision to “build a natural food business bigger than Nestle”, yet had no business plan setting
out the road to achieve this lofty goal. For years, senior TSG management asked Frank to come up
with a plan to address the AG problems as they emerged. Frank continually blamed others for the
struggles of this business – typically managers or firms he had recommended hiring – but the
problems not only continued, they multiplied.

82. In 2016, TSG had an expert consultant review Adena Foods, which was part of the AG
business. This review, delivered in September of 2016, was very pointed as to the problems with
- 19 -

the AG business. Rather than consider the input of the consultant, Frank purported to fire him. A
different expert reviewed the operations in 2017 and was even more critical. In 2018, another
expert hired gave impetus to the current restructuring plans and initiatives.

83. The problems in the AG business are numerous and include design and throughput issues,
construction issues and budget overruns, litigation, inventory management and other costs. Losses
and potentially unrecoverable capital expenditures in the business to date, outside of land
purchases, approximate over US$100 million (including the EBITDA losses). The AG business
has never had a positive return and rarely, if ever, met budget, meaning that losses were almost
always worse than those budgeted for.

84. Experts have consistently opined that the costs of the AG business are too high and the
throughput too low and that the current way of operating will never make money. Experts have
consistently recommended the changes necessary to have a chance of being profitable or at least
breaking even. Frank has refused to make these changes.

85. In 2017, a new manager in AG prepared a report that was shared with the family at the
September 2017 meeting. As what was happening on the ground appeared to be inconsistent with
what was supposed to occur, TSG management thereafter retained yet two more different very
qualified experts to review the situation. Their reports were shared with the family at the March
2018 meeting. These reports cogently explained why the plans then underway had no reasonable
prospect of success, and would only yield greater losses if continued. Belinda and TSG
management acted on some of the recommendations (for example, by terminating plans to open
restaurants and commissaries, shuttering certain retail stores, and eliminating projects focused on
a dairy, a creamery, a pork plant, chickens and spring water). Frank did not agree with these steps.

86. TSG has since conducted further internal studies and engaged further experts. TSG is in
the process of implementing their recommendations (which build on the earlier reports) in the
hopes that by making changes, the AG business can get to a profitable position.

87. The list of mistakes made, problems encountered and business blunders in design,
construction and execution is lengthy. It has been apparent for some time that Frank’s original
concept did not work and had to be significantly revised in order to generate any return. Frank has
- 20 -

refused to even consider this reality. However, in 2017-2018, TSG has begun a restructuring
process with the assistance of industry experts. As a result, the forecast for 2019 shows a small
profit for AG.

(b) TBR (Thoroughbred business)

88. The Thoroughbred business is comprised of three parts: (i) stallions; (ii) racing; and
(iii) breeding (mares and foals), with farms in Kentucky, Florida and Ontario. The Stronach family
members have been Thoroughbred owners for many years and, over the years, have owned many
top racehorses.

89. Frank has been involved in all aspects of the Thoroughbred business. He has selected
horses to purchase, chosen stallions to stand at stud and breed and picked trainers and racing
programs. He has also been involved in choosing horses to buy and sell, as well as in setting the
reserve prices for auctions.

90. However, TBR has experienced large losses (cumulatively in excess of US$150 million)
in each of the last number of years. TSG management has prepared reports and made
recommendations to eliminate or reduce the losses and eventually return to profitability, including
in September 2014. Frank resisted the implementation of most, if not all, of the recommendations,
and thus TBR continued to experience significant losses. With the goal of profitability, TSG is
now in the process of implementing a down-sizing and sale of some of the real estate, and is
beginning to implement staffing changes, reduce horse inventory, and increase profitability for the
stallion breeding program.

(c) AGCC

91. AGCC is a three-phase combined golf course/country club and real estate development
located on approximately 1,275 acres near Ocala, Florida. Construction on the golf course and club
house commenced around December 2010, and the golf course opened in the second half of 2015.
Membership numbers did not meet projections (or come close). In the period 2016 to 2018, AGCC
was operating at a loss in excess of US $300,000 per month.

92. TSG initiated a strategic review of AGCC in the summer of 2017. Among other things, it
retained industry experts to assess how and whether the business could be turned around. The
- 21 -

reports of the independent golf industry expert and real estate expert confirmed that further
investment was not warranted. These results were communicated to Frank and the family and their
counsel.

93. AGCC was listed for sale with a qualified agent, Colliers International Inc. (“Colliers”), in
spring/summer of 2018. Frank was aware of and objected to the listing, through communications
to TSG management and directly to Colliers (purporting to instruct Colliers to halt the sale
process). Frank has repeatedly attempted to have an independent trustee (the “Independent
Trustee”) in the TSG chain which holds AGCC intercede to prevent the sale, and has threatened
litigation in other jurisdictions to prevent it. TSG has provided the Independent Trustee with
periodic updates on the evaluation and viability of AGCC and the status of the sale process.

94. Colliers has conducted a thorough market canvas to identify any and all potential third
party buyers and set up a process for them to conduct due diligence over a lengthy period. TSG
anticipates that the result of the sale process will be a fair market value transaction. It is expected
that given the sunk costs of approximately $118 million, TSG will incur a very large loss with
respect to AGCC.

95. As late as the end of August 2018, Frank advised that he had an investor that would
purchase 50 percent of AGCC for US $40 million. As this number suggested a value far in excess
of the expressions of interest that Colliers was receiving from potential buyers, by letter dated
November 15, 2018, Frank was provided an opportunity to purchase AGCC. This offer was not
accepted.

96. In paragraph 130 of the Statement of Claim, it is alleged that TSG is attempting to sell
AGCC at “a fraction of its worth”. SCC and TSG dispute this in the strongest terms possible. TSG
has designed a process that it anticipates will result in the sale of the property for its fair market
value in an arm’s length transaction.

(d) E-Mobility Business (Bionx/Elby)

97. The E-Mobility or E-Bike business consisted of both Bionx (electric bike motors and other
components) and Elby (complete electric bikes including Bionx components). In the summer of
2017, TSG commissioned a third party review of this business. A further independent strategic
- 22 -

review of the business was initiated in September 2017. The problems with E-Mobility were
discussed at the family meeting at that time. The results of those reviews, as well as management’s
own assessment, made it clear there was no viable future for this business. This was discussed with
Frank and the results provided to the family and their counsel. The losses experienced to date were
projected to increase, and there was no viable way ahead.

98. SCC sought and obtained a court-appointed receiver for Bionx Canada in February 2018.
TSG sold substantially all of Elby’s assets in a buyout led by Elby management in December 2018.

99. The current estimate of the overall TSG loss as a result of its involvement in E-Mobility is
US$90.7 million.

(e) Magnolia

100. In 2018, TSG hired an experienced and professional consultant to assist in assessing and,
as required, restructuring the racino, real estate and other TSG businesses located in Austria. Those
businesses have resulted to date in losses in the tens of millions of dollars. Frank has resisted any
efforts to regularize the Austrian businesses, including by threatening the consultant seeking to
implement necessary changes with litigation and criminal charges.

(f) Other projects

101. Other business ventures or projects initiated by Frank through TSG have incurred losses
totaling over US$25 million. These ventures included the horse racing league referenced above,
which resulted in a US$14 million loss at windup, and additional losses of US$4.8 million on other
ventures, including an aviation holdings company and an art gallery, as well as the following:

(a) Pumpkinseed Oil – Frank’s Naturprodukte: This was a small business in Austria
that was bought at Frank’s request in May 2012. Frank’s Naturprodukte never made
any money. It was sold by the end of 2017. The current estimate of the overall TSG
loss as a result of its involvement in Frank’s Naturprodukte is US$9 million.

(b) Medical Devices: This was a start-up corporation initiated by Frank. It never made
any money and is currently inactive. While TSG is currently in discussions to sell
the business’s intellectual property, this process is not anticipated to result in any
meaningful cost recovery. The current estimate of loss is approximately US$2
million.
- 23 -

(c) Corporate Plane: As briefly mentioned in the Statement of Claim at paragraph 131,
an entity in TSG owned a 2015 Falcon 2000 LSX aircraft. From relatively early on
in 2017, TSG management identified this as an unnecessary cost to TSG in the
amount of approximately $4 million per annum, along with principal debt of over
US$20 million underlying the aircraft acquisition (and guaranteed by Belinda
personally as well as entities held by the Belinda Trust).

TSG management wished to sell the aircraft to save costs and eliminate the
financing debt. Frank was aware of this, and the airplane is referred to in the letter
of May 23, 2017. It was marketed by a capable agent and a binding letter of intent
entered into dated September 7, 2018. This letter was provided to counsel for Frank.
The plane purchase closed on October 31, 2018, saving TSG approximately $4
million per annum and eliminating the financing debt.

(ii) Distributions from SCC

102. In the Statement of Claim and in earlier discussions, Frank raised an allegation that Belinda
had improperly paid herself approximately $70 million. To address this allegation, TSG employees
were asked to report on the amounts received/taken by all family members.

103. Historically (and since well before 2010), the process for dealing with expenses incurred
by family members was as follows. Personal expenses of family members paid from the business
and advances made by the business to family members were accumulated in shareholder accounts.
The shareholder accounts were settled from time to time and at the end of the year, facilitated by
distributions of notes to beneficiaries followed by steps to settle the accounts. While Frank was
and is not a beneficiary of the trusts that own SCC, he incurred expenses without regard to any
applicable corporate policy for himself and others. Those advances/expenses were repaid by
beneficiaries (primarily Belinda, Nicole and Frank Walker and Elfriede) gifting or loaning part of
their distributions to Frank.

104. SCC and various TSG entities are now taking steps to implement corporate policy that
determines a proposal for the amounts that may be distributed to the Family Trusts after the funds
required for TSG businesses are properly budgeted.

105. Prior to his departure from SCC as a full-time employee, John and his team prepared a
document dated May 23, 2018 which set out the historic distributions to all family members. John
provided this document to all family members directly. Thereafter, SCC convened a meeting of
- 24 -

counsel for all family members on May 28, 2018 at which SCC representatives and counsel walked
them through the document and offered to receive any questions they might have on it.

106. As a result of further questions and work, SCC prepared a further detailed analysis of
distributions. This document, with extensive back-up, was provided to counsel for all family
members on August 30, 2018. A further meeting where SCC representatives and lawyers walked
counsel through the document was held on September 5, 2018, and counsel were advised as to the
voluminous nature of the back-up that was available for review by the family members if they so
desired.

107. The May and August analyses are generally consistent and show, among other things, that
the sums received as distributions by the Belinda Trust are less than their respective percentage
ownership of the TSG enterprise.

108. In the period from 2012 through the middle of 2018, SCC maintained the records as to the
capital dividends declared and paid to the Family Trusts, corporate notes payable to the Family
Trusts, and capital distributions to the beneficiaries, as well as the amounts that the beneficiaries
loaned or gifted to Frank. As explained at paragraph 103 above, these amounts were used to
reimburse TSG for expenses or commitments that the family members had occurred or made but
had been paid for by a TSG entity.

109. According to the August analysis, the total personal expenditures of the family members
(including Frank) charged to the shareholder accounts in the period was CAD$261.8 million. Frank
accounts for over half of this spending, approximately $134.6 million, through amounts gifted to
him by members of the Stronach family. Belinda, Nicole and Frank Walker gifted or loaned Frank
approximately CAD$55 million of the $134.6 million. By contrast, personal expenditures of
Belinda’s family charged to shareholder accounts were significantly less than Frank’s
expenditures, amounting to approximately CAD$72.4 million.

110. In the period since the family trusts have been structured as described at paragraphs 39-43,
Belinda, Nicole and Frank Walker have personally used only CAD$51.3 million. This represents
only 53 percent of personal expenditures by the beneficiaries, far less than their 67 percent
- 25 -

entitlement. During this same period, nearly half of distributions to the beneficiaries were again
ultimately gifted or loaned to Frank.

111. A summary of the $134.6 million in expenses incurred by Frank, based on the August
analysis, is also set out below as follows (in Canadian dollars):

Austrian taxes $30,666,028

Austrian politics $50,631,090

Canadian taxes $19,500,000

Adena Meadows residence $4,200,000

Artwork $3,687,608

SISFG $2,500,000

Other personal expenditures $23,400,873

Total $134,585,599

112. The Statement of Claim appears to allege that Belinda has incurred personal expenses and
charged them as business expenses and/or that she has incurred exorbitant business expenses. In
the period 2012 to date, Belinda has been an officer and director of the TSG entities and for several
years has been the Chairman and President of the entities. TSG is a private organization, but based
on its records and policies, SCC is not aware of Belinda having sought reimbursement for business
expenses that were in fact her personal expenses. Indeed, there would not appear any need or
reason to do so given the system with respect to personal expenses described above, in that the
personal expenses and advances were tallied and repaid from time to time and at year end, as
described above. As an executive, Belinda travels and incurs business expenses on behalf of TSG.
Appropriate corporate controls in place at SCC provide for review and approval of those expenses
by another SCC senior executive (such as the Chief Financial Officer) prior to payment. SCC has
been satisfied that the expenses incurred were proper and appropriate business expenses.

113. SCC documents show that the amounts for Belinda are far lower in each year than those
incurred and charged by Frank. In some circumstances, it appears that Frank has taken TSG cash
- 26 -

in addition to the $134.6 million referenced above. For example, in April of 2018, Frank took
US$616,000 of TBR funds (arising from a race win by an TBR horse) by signing it over to himself.
It is unclear whether this happened on other occasions over the years and whether such amounts
were for business expense reimbursement or simply the appropriation of TBR funds by Frank. The
implementation of controls and change of signing authorities in mid-2018 has ended this type of
spending, another occurrence as to which Frank has expressed his displeasure.

114. At paragraph 132 of the Statement of Claim, the Plaintiffs allege that a distribution was
made in January 2018 that was “inappropriate, oppressive and not in the best interests of the
Plaintiffs and the Stronach Group”. SCC denies this allegation. SCC determined that there was,
and there was, sufficient cash available to make the distribution. Based on the facts available to
SCC, the members of the family were aware of the distribution, and Frank in particular supported
it. All members of the family accepted the proceeds of the distribution, most at the time of the
distribution and Elfriede in May 2018.

(iii) Provision of Information Regarding Businesses to Frank and other Family


Members

115. Belinda convened formal family meetings in September 2017 and March 2018 and had
TSG management prepare documentation and make presentations to the family at both these
meetings. There were additional informal meetings and other information provided as well. In
particular, the situations with respect to the AG business and other non-RGG businesses were
addressed in detail at those meetings, and TSG management shared the expert views that had been
obtained. Frank also continued in 2017 and 2018 to have an office at TSG and would make
demands and receive information from TSG employees from time to time.

K. NO BREACH OF CONTRACT OR OTHER WRONGDOING

116. On May 23, 2017, Belinda, Frank, Elfriede and Andrew signed the one-page letter that is
referred to in paragraph 163 of the Statement of Claim. Although the Statement of Claim alleges
that SCC committed a breach of contract with respect to this letter, neither SCC nor any other TSG
entity signed or is party to it. In any event, SCC denies that it in any way breached any obligations
owed by it under this letter, the existence of which obligations is denied.
- 27 -

117. TSG management was informed that Frank made firm representations to Belinda in the
presence of others from TSG management that no funds other than those set out in the May 23,
2017 letter would be required for the AG business. In the months that followed, TSG tracked the
results and spending. It very quickly became clear that the losses were, and were going to continue
to be, greater than projected. It also became clear that the funds Frank intended to use would be
far greater (as had been the case for most or all AG budgets and forecasts before and after that
time) than the amounts contemplated in the May 23, 2017 letter.

118. In the Statement of Claim, the Plaintiffs allege in a general way that SCC, together with
other Defendants, committed various other wrongful acts, including breach of fiduciary duty and
fraudulent concealment. No particulars are provided as to the alleged wrongful acts committed by
SCC. SCC denies any alleged wrongdoing.

L. NO BASIS FOR REQUESTED RELIEF

119. The Statement of Claim seeks certain relief that is related to SCC, including an interim,
interlocutory and permanent injunction restraining it from interfering with or disposing of any
assets held by TSG without the consent of a majority of Frank, Elfriede, Andrew and Belinda, or
until further order of the Court. SCC states that there is no basis in fact or law for injunctive relief
in relation to any actions, proposed or otherwise, of SCC.

120. The Plaintiffs further seek an order requiring reimbursement for personal expenses,
including legal fees and other expenses incurred in connection with this proceeding. SCC denies
on the basis of the information available to it that the Plaintiffs have any entitlement to this relief.

121. The Plaintiffs also seek an accounting with respect to the corporations and entities that
comprise TSG. SCC denies that there is any basis for the granting of this relief. In any event, the
Plaintiffs and their counsel of record have received extensive information regarding the TSG
businesses as described herein.

122. There is similarly no basis for the appointment of an inspector, the granting of a tracing
order, or any of the other relief sought in this Statement of Claim.

123. SCC therefore asks that this Claim be dismissed as against it with costs.
- 28 -

January 21, 2018 Torys LLP


79 Wellington St. W., 30th Floor
Box 270, TD South Tower
Toronto, ON M5K 1N2
Fax: 416.865.7380

Linda Plumpton (LSO #: 38400A)


Tel: 416.865.8193 || lplumpton@torys.com

Leora Jackson (LSO #: 68448L)


Tel: 416.865.7547 || ljackson@torys.com

Lawyers for the Defendant,


Stronach Consulting Corp.

TO: Davies Ward Phillips & Vineberg LLP


Barristers and Solicitors
155 Wellington Street West
37th Floor
Toronto, ON M5V 3J7
Fax: 416.863.0871

Kent Thomson (LSO #: 24264J)


Tel: 416.863.5566 || kentthomson@dwpv.com

James Doris (LSO #: 33236P)


Tel: 416.367.6919 || jdoris@dwpv.com

Chantelle Cseh (LSO #: 60620Q)


Tel: 416.367.7552 || ccseh@dwpv.com

Lawyers for the Plaintiff,


Frank Stronach
- 29 -

AND TO: Lenczner Slaght Royce Smith Griffin LLP


Barristers and Solicitors
130 Adelaide Street West
Suite 2600
Toronto, ON M5H 3P5
Fax: 416.865.9010

Tom Curry (LSO #: 25740V)


Tel: 416.865.3096 || tcurry@litigate.com

Paul-Erik Veel (LSO #: 58167D)


Tel: 416.865.2842 || pveel@litigate.com

Lawyers for the Plaintiff,


Elfriede Stronach

AND TO: Blake, Cassels & Graydon LLP


Barristers and Solicitors
199 Bay Street
Suite 4000, Box 25
Commerce Court West
Toronto, ON M5L 1A9
Fax: 416.863.2653

Michael Barrack
Tel: 416.863.5280 || michael.barrack@blakes.com

Jeffrey R. Lloyd
Tel: 416.863.5848 || jeff.lloyd@blakes.com

Iris Fischer
Tel: 416.863.2408 || iris.fischer@blakes.com

Brittany Shamess
Tel: 416.863.2591 || brittany.shamess@blakes.com

Lawyers for the Defendant, Belinda Stronach in her Personal Capacity and in her
Capacity as Trustee of the Belinda Stronach 445 Family Trust, the Andrew Stronach
445 Family Trust and the 445327 Trust
- 30 -

AND TO: Osler, Hoskin & Harcourt LLP


Barristers and Solicitors
100 King Street West
1 First Canadian Place
Suite 6200, P.O. Box 50
Toronto, ON M5X 1B8
Fax: 416.862.6666

Mark Gelowitz
Tel: 416.862.4743 || mgelowitz@osler.com

Craig Lockwood
Tel: 416.862.5988 || clockwood@osler.com

Lawyers for the Defendant, Alon Ossip in his Personal Capacity and in his Capacity
as Trustee of the Andrew Stronach 445 Family Trust and the 445327 Trust

AND TO: Goodmans LLP


Barristers and Solicitors
Bay Adelaide Centre
333 Bay Street, Suite 3400
Toronto, ON M5H 2S7
Fax: 416.979.1234

Alan Mark
Tel: 416.597.4264 || amark@goodmans.ca

Melanie Ouanounou
Tel: 416.849.6919 || mouanounou@goodmans.ca

Lawyers for the Defendants, Frank Walker and Nicole Walker, in their Capacity as
Trustees of the Belinda Stronach 445 Family Trust and the Andrew Stronach 445
Family Trust
Court File No. CV-18-606163-00CL
FRANK STRONACH v. BELINDA STRONACH IN HER PERSONAL
and ELFRIEDE STRONACH CAPACITY AND IN HER CAPACITY AS TRUSTEE
OF THE BELINDA STRONACH 445 FAMILY
TRUST, THE ANDREW STRONACH 445 FAMILY
TRUST AND THE 445327 TRUST; et al.
Plaintiffs Defendants

ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST

Proceeding commenced at TORONTO

STATEMENT OF DEFENCE
OF STRONACH CONSULTING CORP.

Torys LLP
79 Wellington St. W., 30th Floor
Box 270, TD South Tower
Toronto, ON M5K 1N2
Fax: 416.865.7380

Linda Plumpton (LSO #: 38400A)


Tel: 416.865.8193 || lplumpton@torys.com
Leora Jackson (LSO #: 68448L)
Tel: 416.865.7547 || ljackson@tory.com
Lawyers for the Defendant,
Stronach Consulting Corp.

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