New York private equity fund Quadrangle says its long-running legal battle with Ottawa is a warning to foreign investors — SkimNews
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- Quadrangle Group LLC managing principal Michael Huber is fighting in Ontario court to collect a $500-million-plus judgment against the Canadian federal government, warning the case signals Canada "fails to respect rule of law" — the same allegation PM Carney has leveled at the U.S. administration
- Justice Peter Osborne ruled last August that Ottawa was negligent when it induced Quadrangle and Obelysk Media Inc. (controlled by former Toronto Raptors owner John Bitove) to launch Mobilicity in 2008, then changed wireless licence sale rules; he described government conduct as "wholly improper, capricious, arbitrary, contrived and highly irregular"
- Mobilicity's 2013 creditor filing wiped out Quadrangle and Obelysk's $243-million licence investment and $95-million in build-out costs, and Rogers Communications acquired the company in 2015
- The appeal hearing this week takes place a few blocks from the Four Seasons Hotel in Toronto, where Carney is pitching approximately 300 senior executives from major global asset managers on investing in Canada
- If the government loses, Canadian taxpayers face a combined judgment and legal costs total exceeding $700-million, per Quadrangle's lead lawyer Jonathan Lisus
- Canadian telecom capital spending is already contracting: Rogers announced cuts of more than 30% this year (to $2.5-2.7 billion from $4 billion in 2024), with BCE and Telus announcing similar reductions, which analyst Adam Shine tied to "regulation by ideology"
Why it matters: The appeal lands at the worst possible moment for Ottawa: a few blocks from a summit designed to convince global asset managers that Canada is a safe place to put capital, while the country's three largest telecom carriers simultaneously slash infrastructure spending by 30% or more — directly undermining the infrastructure investment pitch Carney is making.
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