By John Tilak and Lawrence Delevingne
TORONTO/NEW YORK (Reuters) - An Ontario judge on Wednesday dismissed a C$1.3 billion ($1.03 billion) lawsuit by Catalyst Capital Group Inc in a case involving Canadian wireless carrier Wind Mobile, citing an “abuse of process” by the Canadian private equity firm.
Catalyst sued VimpelCom (NASDAQ:VEON) Ltd, Canadian investment firm West Face Capital Inc, UBS Securities Canada and others in 2016. VimpelCom, a Russian cellphone operator that changed its name to Veon Ltd, owned a large stake in Wind through a subsidiary.
Saying it had an exclusive agreement with VimpelCom to buy Wind Mobile, Catalyst alleged misuse of confidential information by West Face and others, as well as a breach of contract against some of the defendants. The core issue was whether West Face and others used confidential information from a former Catalyst employee in the acquisition of Wind.
“Catalyst is disappointed by the decision and this result,” Catalyst said in a statement following the ruling. “Catalyst continues to strongly believe that its rights, and the interests of its limited partners, were violated in the Wind transaction. Catalyst also strongly believes that substantial evidence exists to substantiate this conclusion.”
Catalyst will explore "all appropriate legal avenues," it added.
West Face Chief Executive Greg Boland said in a statement: “This decision is yet another independent confirmation of lack of merit to the serial litigation being pursued by Catalyst against West Face for almost four years.”
The lawsuit was one of two filed by Catalyst against West Face Capital and others after it lost a bidding process to buy Wind Mobile from VimpelCom in 2014.
Judge Frank Newbould, originally hearing both cases in Ontario's Superior Court, dismissed one of them in August 2016, concluding that West Face and others had not used confidential information from a former Catalyst employee to make its winning bid. Catalyst appealed Newbould’s dismissal, and that appeal was dismissed in February.
In his decision on Wednesday, Judge Glenn Hainey wrote that Catalyst's current action "is dismissed ... as an abuse of process."
Catalyst told its private equity fund investors last year that its VimpelCom Wind claim could be highly lucrative. In an annual meeting presentation in April 2017, Catalyst estimated the claim was worth $446.9 million at the end of 2016 and that the firm had “a reasonable likelihood of success at trial.” [Read the Reuters Special Report on Catalyst here: https://reut.rs/2Jh1Wjq]
In a letter to investors sent in March, Catalyst said: “We remain convinced that Catalyst’s confidential work product, information, and strategies regarding the WIND transaction were improperly conveyed” and that “such breaches caused significant damages to Catalyst Fund investors.”
(Corrects name of judge in paragraph 9.)