Industrialist Frank Stronach is accused of losing $ 800 million in several misguided investments, a track record that Belinda Stronach said should have prevented 86 years from taking back control of a business he built for life.
In the latest salvos of a two-year battle to control their family wealth, which amounted to $ 1.6 billion eight years ago, Ms. Stronach alleged in a court filing Monday that the founder of the auto parts company Magna International Inc. has lost the touch of entrepreneurship. He said that since breaking ties with Magna in 2011 and selling its shares in the business, his father had financed a series of loss-making businesses, including organic cattle farms, electric bicycles, pumpkin seed oil business and Florida golf courses. The total investment is US $ 846 million, and includes US $ 55 million for two large bronze and steel statues from Pegasus, one of which is a horse racing horse in Stronach's Florida, and the second is still stored in China.
Stronach, president and chairman of the family holding company Stronach Group and former federal cabinet minister and CEO of Magna, also accused his father of tapping family coffers for $ 135 million in personal expenses, including a $ 51 million banknote for the president in his home country, short term. Austria, $ 50 million to pay taxes in Austria and Canada and $ 7.9 million for art and new homes in Florida. In court documents, Ms Stronach said: "Frank's unclear spending and unhealthy business decisions have reduced the family's net worth by US $ 580 million (or ~ C $ 800 million) which is surprising."
Court filings came in response to a lawsuit launched last October by Mr. Stronach and his wife, Elfriede, against their daughter, two adult children and perceived allies, former CEO of Stronach Group Alon Ossip. The couple accused their daughter of mismanaging family affairs and spending a lot of money on herself. They asked the Ontario High Court for compensation of $ 520 million and demanded he restore control of the family business to Mr. Stronach, who severed all ties with the business in 2011 when he entered politics in Austria. Andrew Stronach, the couple's only child, then filed a lawsuit supporting the position of his parents. None of the charges have been tried in court.
The lawyer for Mr Stronach declined to comment, but referred questions to family friend Dennis Mills.
"I suffered greatly for Frank, Belinda and family, because Frank spent his career building wealth and ensuring wealth would be maintained," said Mr Mills, longtime adviser to Mr Stronach and former Magna politicians and executives, who showed that much of Mr.'s investment Stronach is in real estate, an asset that tends to maintain its value over time. "I am still optimistic that with love, in the coming days, this problem can be solved in a way that is beneficial for family and business."
In response, the 52-year-old Stronach asked the court to let him be in charge of the Stronach Group, which has six horse racing tracks, gambling and US media business based on race racing and real estate. He said horse racing had doubled their income to US $ 1.1 billion on his watch, in part by embracing online bets. Stronach also repaid his father for $ 32.8 million, claiming he had to pay money spent on his Austrian political campaign.
"Unfortunately, in Frank's career arc, business failure and the pursuit of an idiosyncratic desire project were expressed with success in the automotive industry," Ms Stronach said in court documents. Mr Stronach arrived in Canada in 1954 with $ 200 in his pocket and built a $ 21 billion auto parts company. At the time of Mr. Stronach October, Ms. Stronach said: "Family relationships in a business can be challenging."
Mr Ossip spokesman Paul Deegan said on Monday: "Alon has worked tirelessly to create value for the Stronach family, and has always been honest. As CEO, he is obliged to oppose unclear spending and unhealthy business decisions."
The main legal issue in this dispute is expected to be an agreement signed in 2011, when Mr Stronach gave up his daughter full control of family affairs, the lawyers for both parties said. Mr Stronach accused him of signing the document at the time which enabled him to regain control of the family company whenever he wanted. His daughter said the agreement was made by Mr. Ossip, as CEO of a family company, at his request when he dealt with cancer, never dated, and was only intended as an emergency supporter to ensure the family kept control of his business. if he can't.
The Stronach family feud began behind closed doors two years ago, when Ms. Stronach and Mr. Ossip began rejecting cash requests to support projects such as 90,000 hectares of farms in Florida that raise grass-fed livestock. Until then, Frank and Belinda Stronach were closely related, with their business and personal interests interrelated.
Before his father's initial lawsuit last October, Ms. Stronach is trying to resolve a dispute by separating family ownership: His father will maintain a livestock operation, he will take the horse racing and gambling business, according to advisers. work with both groups. Mr. Stronach rejected the idea of dividing the empire because the founder of Magna believed he had created family wealth and had to have the highest authority over the place he spent. Legal documents also show that Mr. Stronach wants to use cash generated from horse racing, estimated at US $ 80 million per year, and the ability to borrow from rackets and other real estate assets to finance his organic farming operations, which are currently losing money.