Quadrangle wrangle: Mobilicity backers sue feds

8 Sep 2014

The Canadian and US financial backers of indebted Canadian cellco Mobilicity have filed a claim in the Ontario Superior Court of Justice against Industry Canada – the federal government ministry responsible for telecoms – seeking CAD1.2 billion (USD1.1 billion) in damages, claiming negligence and breach of contract. As reported by the Toronto Star, the claim accuses the government of reneging on assurances that it would enforce foreign ownership takeover rules and prevent unfair competitive practices by incumbent operators, and of reversing a pledge which would have allowed the transfer of wireless spectrum after five years – resulting in larger operator Telus being blocked in its attempts to buy Mobilicity, which is currently operating under creditor protection. The plaintiffs – US private equity firm Quadrangle Group LLC and Data & Audio-Visual Enterprises Investments Inc (DAVE), owned by Canadian businessman John Bitove, have since 2008 invested CAD356 million in Mobilicity, according to the court documents. DAVE invested a total of CAD44 million, while Quadrangle invested CAD217 million of equity and CAD95 million of debt.

Canada, Innovation, Science & Economic Development Canada, Mobilicity