Frank Stronach has filed a lawsuit against his daughter, Belinda Stronach, and The Stronach Group's chief executive, Alon Ossip, alleging the pair are mismanaging the assets the elder Stronach compiled over a long and successful business career and which Belinda Stronach now oversees as company chairman and president. The suit, filed Oct. 1 in Ontario Superior Court of Justice, was first reported by Thoroughbred Daily News.
Frank Stronach, now 86, emigrated to Canada in 1954 from his native Austria with $200 to his name. He started a small tool and die business in a garage and gradually built the company into a global giant as manufacturer of automobile parts. He bought his first Thoroughbred in the 1960s and his passion for racing and horses grew along with his stable and breeding operation, which has won a dozen Eclipse Awards as outstanding owner or breeder. Earlier this year, Stronach was recognized with an Eclipse Award of Merit.
Belinda Stronach, who served in Canada as a member of Parliament in the House of Commons, followed her father into the automobile parts manufacturing business at the company he founded, Magna International. She rose to become president/ CEO and vice chairman of the company. Belinda Stronach was recognized as Canada's most powerful businesswoman by the National Post in 2001 and ranked second on Fortune Magazine's Global Power 50 list of the world's most powerful women in business.
In December 1998, Frank Stronach expanded his interest to racetrack ownership, buying Santa Anita Park in California, and later adding Gulfstream Park in Florida, Pimlico and Laurel in Maryland, and Golden Gate Fields in Northern California to the portfolio, making the company the largest operator of racetracks in North America.
The lawsuit involves those assets and a multitude of companies that form The Stronach Group along with trusts that Frank Stronach established for family members.
Belinda Stronach and Ossip took on greater responsibility of running the company in 2013 when Frank Stronach became “founder and honorary chairman” of the Stronach Group. Belinda Stronach was named president and chairman, with Ossip the company's CEO. “From virtually the moment this arrangement was entered into, Alon failed to fulfill his most basic obligations as CEO of TSG,” the Thoroughbred Daily News quotes the suit as alleging. “Instead, he breached repeatedly his legal equitable and fiduciary duties.”
The suit said Frank Stronach learned in November 2016 from Belinda Stronach and Ossip that the company “was facing significant liquidity issues,” raising “red flags about their management of TSG.”
The report of the lawsuit states Belinda Stronach and Ossip have been “confrontational, disrespectful and insubordinate” to the elder Stronach and took the position that he had no decision-making authority or access to company funds.
Frank Stronach is seeking legal redress to have his daughter and Ossip removed from corporate officer and trustee positions, according to Thoroughbred Daily News. He is also seeking CAN$250 million in compensation for “all losses, damages or harm suffered,” CAN$250 million in damages for “breach of fiduciary duty, breath of trust, and unlawful means of conspiracy”; and CAN$20 million in “punitive, aggravated and/or exemplary damages.”
“These allegations are baseless and are not grounded in fact or reality,” Paul Deegan, a spokesman for Ossip, said in an email to the Paulick Report. “Alon has always honored his obligations and acted in good faith to preserve and grow the Stronach family's assets and to protect the interests of all members of the family. Alon created huge wealth for the family, and he has always operated in a prudent and commercially-sensible manner.
“Frank Stronach was a great auto parts entrepreneur, but his recent excessive spending and numerous failed ventures put his family's wealth at risk,” the statement continued. “This is a dispute between Stronach family members that should be resolved between family members.”
Frank Stronach's wife, Elfriede, is named as co-plaintiff, and two of Belinda Stronach's adult children, who served as trustees of some assets, are listed as co-defendants.
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