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Top Canadian law firms are jockeying for position to represent people who have money tied up in a cryptocurrency exchange that became frozen after the mysterious death of its founder in India.

Gerald Cotten, possibly holding the only keys to money tied up in his virtual currency exchange, died in December.

His sudden death set off a wave of outrage as clients tried to retrieve their funds — only to face a frozen website and a lack of information.

On Tuesday, Nova Scotia Supreme Court Justice Michael Wood released a decision after accepting applications from at least four named law firms that each represent the interests of more than 100 of the 115,000 clients of Quadriga Coin Exchange or Quadriga CX which is operated by Quadriga Fintech Solutions Corp.

In total, clients are owed approximately $250-million, according to Wood’s decision filed Feb. 19.

Since the initial creditor protection hearing on Feb. 5, the court had received competing motions on behalf of Quadriga clients who are owed a few hundred to several million dollars, according to the court decision.

All parties seek to have a committee of creditors and legal counsel appointed to represent their varied interests — with a reasonable cap and control on the fees that can be charged.

The sudden death of Gerald Cotten, founder of QuadrigaCX, has sent the cryptocurrency exchange into a tailspin. (Facebook/QuadrigaCX)

The challenge, according to the judge, is the varied interests of the vastly different creditors all looking to recover their cash.

This amid fears some of the money has already vanished.

A week ago, the court-appointed monitor overseeing the search for millions lost by the Canadian cryptocurrency exchange, reported that an additional half-million dollars worth of bitcoin had disappeared.

Ernst and Young reported that Quadriga “inadvertently” transferred bitcoins to cold digital storage wallets that were inaccessible, making clients short funds even more nervous.

Dead or alive?

“The business is currently suspended and may never resume, although that remains to be determined,” Wood wrote.

He said there’s been “a great deal of discussion” online about Quadriga — and where the cash has gone, noting the vast array of blockchain detectives all vying to prove exactly what has happened to the missing cash.

Lawyers for both a monitor appointed by the court — and the applicants — urged the court to make a decision as fast as possible before the next hearing scheduled for March. 5, in order to enable a suggested $100,000 cap on legal expenses.

For people short investments, the legal process seems slow, and many say they are frustrated.

A few dozen moved to start a class-action — only to have their retainers returned by the organizer, after the court gave Quadriga 30 days of protection against any legal action.

Faith gone

Alan Nanut of Toronto says he has about $22,000 invested that he’s not sure he’ll get back.

“I don’t regret purchasing cryptocurrency. It was a speculative investment for the long term.

However I do regret not moving cryptocurrency off the exchange with ample time and sufficient signs of shady news leading up to the shutdown and CCAA commencement,” he wrote to CBC, in an email documenting his transactions.

Nanut and others describe business with Quadriga as a learning experience.

About five years ago, Gerald Cotten used to spend his off-hours with friend Freddie Heartline in Vancouver. In 2014, Cotten predicted a future where bitcoins would be worth $10,000 each. (Freddie Heartline)

“My faith in exchanges has been tarnished,” he said. But for those trying to unravel what’s now become an international crypto-drama — there were clues there might be problems.

When Cotten still had an office on Water Street in Vancouver five years ago, he described his venture on a podcast called True Bromance.

Hosts Sage Brocklebank and Michael Karl Richards said Cotten was “attractive and enigmatic.”

‘Like burning cash’

Cotten described virtual cash as the new form of day trading, painting a picture of an online gold mine.

But he did warn the hosts about the danger of losing access to keys or passwords needed to access bitcoin investments.

“It’s like burning cash in a way,” Cotten said back in 2014. “If you’ve lost the private key. It’s impossible to retrieve those.”

But he also described how the strings of numbers that are left after each transaction — can be chased.

And as the legacy left unfolds — hundreds of self-proclaimed experts — are doing just that.

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A judge has thrown out fraud and bribery charges against a former SNC-Lavalin executive after concluding delays in his trial had become unreasonable.

Quebec court Judge Patricia Compagnone made the decision ending the prosecution of Stéphane Roy today.

Roy was facing charges of fraud over $5,000 and bribing a foreign public official in connection with the company’s dealings with the regime of the late Libyan dictator, Moammar Gadhafi.

His case stemmed from the same RCMP investigation that led to charges against SNC-Lavalin. Those charges are fuelling controversy in Ottawa following a report that the Prime Minister’s Office pressured former attorney general Jody Wilson-Raybould to help the engineering firm avoid prosecution.

Roy was charged in 2014, and his trial was scheduled to begin at the end of May. His defence successfully invoked the Supreme Court of Canada’s 2016 Jordan decision that set time limits on criminal proceedings.

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Payless Shoes is going into creditor protection in the U.S. and Canada, and will likely close all its stores.

The discount shoe retailer, which has more than 2,500 stores across North America, is seeking protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code, and the Canadian equivalent, the Companies’ Creditors Arrangement Act.

“Payless intends to use these proceedings to facilitate a wind-down of its approximately 2,500 store locations in North America and its e-commerce operations,” the company said in a statement.

The company has 248 locations across Canada, employing 2,400 , and court documents suggest they collectively lost $12 million US last year.

The stores “are insolvent and are unable to meet their liabilities as they become due,” court documents suggest.

They say 220 of the Canadian stores couldn’t come up with rent for the current month.

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The United States and China resume talks Tuesday aimed at ending a fight over Beijing’s technology ambitions ahead of a deadline for a massive U.S. tariff hike.

The White House said that meetings between mid-level delegations will begin in Washington following talks last week in Beijing that U.S. Trade Representative Robert Lighthizer said “made headway” on key issues.

On Thursday, Lighthizer will lead higher level talks, joined by Treasury Secretary Steven Mnuchin, Secretary of Commerce Wilbur Ross, White House economic adviser Larry Kudlow and trade adviser Peter Navarro.

Leading the Chinese team will be Vice Premier Liu He, according to the Xinhua news agency.

Business groups and economists saw Friday’s surprise announcement of further talks this week as a sign that the two counties were making progress.

Both governments have expressed optimism, but they have given no details of their talks. Economists say the time available for negotiations is too brief to resolve an array of irritants in U.S.-Chinese relations. They say Beijing’s goal is to persuade President Donald Trump they are making enough progress to push back threatened U.S. penalties.

Beijing hopes for “a mutually beneficial and win-win agreement that is acceptable to both sides,” said a foreign ministry spokesman, Geng Shuang.

Without an agreement, a 10 per cent tariff increase imposed on $200 billion of Chinese goods is due to rise to 25 per cent on March 2.

Last Friday, Lighthizer told the Chinese president, Xi Jinping, the two sides “made headway on very, very important and difficult issues.”

Trump imposed the penalties over complaints Beijing steals or pressures foreign companies to hand over technology. The talks also include complaints about Beijing’s plans for government-led technology development, cyberspying and China’s trade surplus.

Beijing retaliated with higher duties on U.S. goods and told its importers to find other suppliers. That led to a 40 per cent drop in Chinese imports of American goods in January.

Washington, Europe, Japan and other trading partners complain plans such as “Made in China 2025,” which calls for government -led creation of global competitors in robotics and other technologies, violate Beijing’s market-opening obligations.

China’s leaders have offered to narrow its multibillion-dollar trade surplus with the United States by purchasing more natural gas, soybeans and other exports. But they are resisting pressure to scale back industry plans they see as a path to prosperity and global influence.

Other stumbling blocks include Chinese resistance to U.S. pressure to accept an enforcement mechanism with penalties to ensure Beijing carries out whatever commitments it makes.

Trump said last week he might be willing to push back the March 2 date if the talks go well but Washington has yet to say whether the negotiations are making enough progress.

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Netflix is setting up a dedicated production hub in Toronto, which film and TV creators hope will provide new opportunities for local talent.

The California-based streaming giant announced Tuesday it is expanding its presence in Canada by leasing two studio spaces along the downtown industrial waterfront area.

At Cinespace Studios, Netflix is leasing four new sound stages — along with spaces for office and support work — totalling approximately 164,000 square feet.

At Pinewood Toronto Studios, Netflix is also leasing four sound stages and adjacent office space totalling 84,580 square feet.

Netflix said the commitment will provide jobs for up to 1,850 Canadians per year, and that the leases are “multi-year” but didn’t specify for exactly how long.

“This is great news for the Toronto and the Ontario community, because it’s an endorsement of the high quality of the work that comes out of our industry,” said Jim Mirkopoulos, vice-president of Cinespace.

“Netflix has made a commitment to the film and television industry here that they’re going to continue to do stuff and by making this announcement, they’re standing by that,” added Nanci MacLean, president of Pinewood Toronto Studios.

Cinespace said its sound stages leased by Netflix are under construction and set to be operational this summer.

Pinewood said Netflix will move a production onto one of its sound stages in the next couple of weeks. The four sound stages being leased are separate from Pinewood Toronto Studios’ previously announced planned expansion.

Projects already set to be made at the hub include the horror anthology series Guillermo del Toro Presents Ten After Midnight” and the film Let It Snow.

Netflix has production facilities in Los Angeles and recently announced new hubs for Madrid and Albuquerque, N.M.

It also leases British Columbia’s Martini Film Studios and production sites across Canada on a case-by-case basis.

Its co-productions with Canadian partners have included Anne with an E and Alias Grace with CBC, Travelers with Showcase, and Frontier with Discovery Canada.

Speculation of a Toronto hub started swirling last month when Mayor John Tory, who has been making annual trips to Los Angeles to lure film and TV projects to the city, told The Canadian Press he had “a very high level of confidence” that Netflix would open one up.

Tory’s words drew positive reaction from local screen talent, who said they hoped it would foster Canadian projects.

“In television right now, they’re always going to be my first stop, frankly,” said Toronto producer J. Miles Dale, who is developing Ten After Midnight with del Toro, with whom he won an Oscar last year for The Shape of Water. Dale is also developing his own Netflix series, 44 Chapters About Men, which he hopes will be at the hub.

Netflix has also faced heavy criticism from Canadian broadcasters and other industry players for not being on a level playing field when it comes to regulation in Canada. (AP Photo/Matt Rourke)

“You can say whatever you want, you can show whatever you want, you can show real adult situations without the kind of censorship that comes in.”

Netflix is giving a similar freedom to filmmakers, said Dean DeBlois, the Aylmer, Que.-raised director of How to Train Your Dragon: The Hidden World, out Friday.

“It’s the wild west of filmmaking within their particular format and I have several friends who have gone to Netflix with original projects and they’re just having the best time of their careers,” said DeBlois.

“They’re willing to take a chance on a completely original project and not just resurrect something that’s been done before.”

Streaming services are also one-stop shops for Canadian creators who usually have to go through multiple avenues to find producers, sellers, distributors and financing, said Oscar-nominated Toronto director Hubert Davis.

“For filmmakers, that might be the best option for your project to get it going, as opposed to going to all of these different sources to get it made,” he said.

Vancouver-based producer and filmmaker David Paperny is looking forward to the possibility of conducting business within Canada.

“They could have their ear closer to the ground of the vast Canadian talent source out here,” said Paperny.

“So it will be easier to pitch them, it will be easier for them to work in collaboration with us on our productions.”

But some worry the hub will take up precious studio space that producers are clamouring for in Toronto.

Netflix has also faced heavy criticism from Canadian broadcasters and other industry players for not being on a level playing field when it comes to regulation in Canada.

Criticism of company

Because it’s a foreign digital company, Netflix isn’t required to collect or remit federal or provincial sales tax.

So far Netflix also hasn’t fallen under federal regulations that require the country’s broadcasting companies to pay into the Canada Media Fund for the creation of homegrown programming.

Netflix has argued it shouldn’t be forced to pay into such funds, pointing to the money it’s already putting into the system by creating shows here.

In September 2017, the company pledged to spend $500 million over five years to fund original content made in Canada, a number it recently said it will exceed.

“I’m all for (a hub), bring it on. I just care about Canada’s voice and Canadian content,” said Virginia Thompson, co-executive producer of Corner Gas and co-founder of Verite Films.

“If there are more jobs for people in the city, great. And if it increases the chance of people here making (stuff), then terrific,” added Toronto-based actor/filmmaker Jay Baruchel, star of How to Train Your Dragon: The Hidden World.

“When a big corporation comes to town, it could be awesome, but it’s not guaranteed to be so…. Whatever puts resources in the hands of talented Canadian artists, I’m all for it.”

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U.S. backsliding on climate under the administration of President Donald Trump may have dealt his Democratic Party opponents an ace card.

While the Democrats’ Green New Deal is championed by its left-leaning younger members, notably the dynamic New York Rep. Alexandria Ocasio-Cortez, Trump’s climate-skeptical stance has ceded the field on an issue that has a much wider potential appeal.

And according to centre-right Canadian supporters of climate action, the popularity of environmentalism as an issue owned by the Democratic U.S. left is in many ways a creation of Trump himself.

Not only that, but by dropping the ball on climate, the U.S. administration has allowed people like Ocasio-Cortez to capture younger voters disenchanted with the economy who might not otherwise fit the traditional environmentalist profile, combining the two concerns under a single populist rallying cry.

“I am so incredibly excited that we are going to transition this economy into the future,’ said Ocasio-Cortez in a rousing speech outlining her Green New Deal plan. But clearly the young politician’s intended audience extended well beyond the issues of climate and environmentalism.

“Today is a big day for people who have been left behind,” she said.

Huge spending in the Second World War on machinery such as what was used in the D-Day landing on June 6, 1944 rebooted the U.S. economy. Spending on a Green New Deal could have a similar effect, its proponents hope. (Canadian Press)

Those left behind are not just young people. But according to Canadian millennial Katie Rae Perfitt, Ottawa-based community organizer for the climate change advocacy group 350.org, a message of “transformative change” appeals to a generation struggling with the gig economy and expensive rents. 

“They were demanding … that the Democrats in the U.S. put forward a Green New Deal that challenges the power and influence of the fossil fuel industry but also that can be the answer to some of the deepest inequities that are seen in the U.S. society but that we see also in Canada,” said Perfitt.

Despite Canada’s current court battle that pits the conservative governments of Ontario and Saskatchewan against the federal carbon tax plan, conservative supporters of climate change action insist it is not a left-right issue.

Margaret Thatcher’s worry

It’s good that the Green New Deal “puts climate change front and centre again,” said Mark Cameron, executive director of Canadians for Clean Prosperity, who was director of policy and research for former Conservative prime minister Stephen Harper.

“But I think it does mix a lot of things that are not necessarily compatible and subordinates the goal of reducing carbon emissions to a lot of other things on the liberal social democratic wish list.”

And while Perfitt believes greedy corporations are the problem, Cameron contends that business can be part of the solution. He says former British Conservative prime minister Margaret Thatcher was the first major world leader to put climate change on the agenda.

Cameron also notes that while Trump and his administration appointees may want to burn more coal and make environmental laws toothless, there are many traditional conservatives and Republican politicians who did not want to see the U.S. withdraw from the Paris Accord, the co-ordinated global attempt to stop climate change.

Christmas dinner during the Great Depression. The Democrats’ original New Deal during that period provided relief for poor families and instituted widespread reforms to the economy. (Franklin D. Roosevelt Presidential Library and Museum/Reuters)

While Trump’s voter base may include many climate deniers, others have witnessed the effects of drought, floods, forest fires and freak winter storms and realize something must be done. Conservatives, too, worry about the world their children will inherit.

According to David McLaughlin, a Canadian climate change specialist for the International Institute of Sustainable Development and adviser to former Progressive Conservative prime minister Brian Mulroney, the current version of the Green New Deal could not have come about without three factors.

One is the charismatic Ocasio-Cortez. Another is the increasingly undeniable scientific evidence that climate change is affecting our planet. But the third necessary ingredient, he says, was Trump himself.

Impossible without Trump?

“Can you imagine it having this kind of radical breadth to it in terms of trying to remake American society and economy without two years of Donald Trump?” asked McLaughlin.

“We have to recognize that the landscape for climate issues has radically shifted in the last two years.”

But in its current form, he said, the Ocasio-Cortez plan is not a viable blueprint, simply because it would never get through Congress. He called it classic Christmas tree politics.

“The tree has been decorated with so many ornaments, from health care to living wages to family farms, that the whole tree risks falling over.”

The Franklin Delano Roosevelt Memorial in Washington honours the president behind the original New Deal. Roosevelt held office from 1933 until his death in 1945. (Reuters)

But societal transformations are not born fully formed. Debate continues within the Democratic Party over exactly what the final Green New Deal will contain. Yes or no to nuclear? What will the private sector role be ? How much could taxpayers be convinced to spend?

In the past, massive defence spending has been predicated on the idea that the threat exceeds the cost. As the impact of climate change becomes more apparent, something similar could happen.

So far, most of the Democratic presidential candidates have backed a version of the Green New Deal, perhaps seeing it as an aspirational starting point that can be moulded or cherry picked on the campaign trail. Without a climate plan of its own, the Trump administration can do nothing but oppose.

The original New Deal, introduced by Democratic Party hero and four-term president Franklin Delano Roosevelt amid the poverty of the Great Depression, is seen as part of a social revolution that redistributed opportunity and — along with massive spending on the terrible Second World War that followed — set the country up for decades of economic success.   

The Democrats will be trying to make the case that the Green New Deal, in whatever form it finally takes, will do something similar.

Follow Don on Twitter @don_pittis


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Canada’s largest airlines are awaiting details from the federal government before they follow their U.S. counterparts in allowing travellers to choose gender designations outside the traditional “male” and “female” check-in categories.

Major U.S. airlines said last week they will change their ticketing process so that passengers can identify themselves along non-binary lines.

That change comes after a pair of major trade groups — the International Air Transport Association and Airlines for America — approved updated standards to allow member airlines to offer two new gender options: “unspecified” or “unidentified.”

In 2017, Ottawa announced that travellers will at some point be able to specify their gender with an “X” on their passport, instead of “F” for female or “M” for male.” The website for Immigration, Refugees and Citizenship Canada says the change is coming “soon.” Until then, passengers can request an “observation” on their passport that notes their sex should be marked as “X,” the site states.

The National Airlines Council of Canada, which represents Air Canada, WestJet Airlines Ltd. and other companies, tells The Canadian Press that members are “awaiting developments and details” on the plan before altering their check-in systems.

U.S.-based airlines American, Delta and United confirmed Friday that they are in the process of updating their booking tools to add a similar option, implementing it in the next several weeks. They are making the check-in change despite resistance to non-binary passport options from the State Department.

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Amazon, which ships millions of packages a year to shopper’s doorsteps, says it wants to be greener.

The online retail giant announced plans Monday to make half of all its shipments carbon neutral by 2030.

To reach that goal, the online retail giant says it will use more renewable energy like solar power; have more packages delivered in electric vans; and push suppliers to remake their packaging.

McDonald’s, Coca-Cola and other big companies that generate lots of waste have announced similar initiatives, hoping to appeal to customers concerned about the environment.

Amazon is calling its program “Shipment Zero,” and plans to publicly publish its carbon footprint for the first time later this year.

Seattle-based Amazon said it spent the past two years mapping its carbon footprint and figuring out ways to reduce carbon use across the company.

“It won’t be easy to achieve this goal, but it’s worth being focused and stubborn on this vision and we’re committed to seeing it through,” said Dave Clark, Amazon’s senior vice-president of worldwide operations.

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Japanese carmaker Honda is set to announce the closure of its Swindon car plant putting 3,500 jobs at risk, Sky News reported on Monday.

Sky News said that the announcement by Honda could come on Tuesday, and that the plant was scheduled to close in 2022.

Spokesmen for Honda were not immediately available to comment on the report.

“That’s speculation so we wouldn’t comment on that,” a spokeswoman for Britain’s business ministry said.

Honda built just over 160,000 vehicles at its British factory last year, where it makes the Civic model, accounting for just over 10 percent of Britain’s total output of 1.52 million cars.

The firm said last month that it will shut its British operations for six days in April to help it counter any border disruption from the Britain’s departure from the European Union.

It has also said it was preparing to front-load some production at its plant to ship overseas or build up inventories.

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