(Judgment Day is a new feature profiling business-related Alberta court decisions.)

A Las Vegas company rolled the dice when it sued two Alberta exploration companies for loan payments.

In April of this year, Nevada-based Knox LLC alleged that Bearcat Exploration Ltd. and Stampede Oils Inc. had committed acts of bankruptcy by failing to meet payments to Knox on a loan of more than $3.7 million US.

Before the judge delivered an oral decision supporting the claim, Bearcat and Stampede beat him to the punch, filing notices of intention (an admission of insolvency).

But sometimes filing a suit is a gamble, as Knox found out, because the judge had more to say. The two exploration companies may have defaulted on payments, but the interest rate Knox was charging them on six of seven loans was “criminal,” the judgment said. The rates, ranging from 113.8 per cent to 411 per cent, were deemed illegal and unenforceable.

On Sept. 17, the judge allowed the principal loan amount to stand, but severed the interest portion of the obligation, capping interest at five per cent.

SHOW ME THE MONEY

Two Alberta companies have been told not to get too comfortable with a payout they won in a recent suit – in case they have to pay it back.

In May 2001, Dell Chemical and Marketing Ltd. and 420708 Alberta Ltd. won a case against Aquasol International Inc. and several individuals regarding breach of intellectual property rights.

Aquasol and the individuals were ordered to stop using a certain metal cleaning formula, but were found in contempt when they did not.

The court awarded Dell $108,000.

Aquasol has filed an appeal, contending it has new evidence to show it was not in breach of the formula in question.

On September 18, the court instructed that until the appeal is settled, Dell and 420708 should be granted the money, but with condition.

But to get it, Dell and 420708 must post a line of credit for that amount, ready to be paid out to whomever the appeal court directs.

PARTNER'S PATIENCE PAYS OFF

It has taken years, but finally a Calgary family has won its case against an old partner in business.

Gilbert Seidel, James Kerr and Thomas Popowich each owned 25 per cent of Tenth Avenue Holdings (Calgary) Ltd. The remaining share was divided among the trio’s nine children.

In 1998, under the direction of Seidel as president, Tenth sued Kerr and a number of companies owned by him.

Seidel alleged Kerr paid himself excessive management fees, borrowed money from the company, failed to have rentals paid to Tenth by companies he owned and fraudulently concealed facts.

Seidel filed another charge in September 2000 on behalf of his children, repeating the allegations.

In response, Kerr and Popowich took control of Tenth in January 2000, elected themselves and son Gerald Thomas Popowich as directors, changed Tenth’s solicitors and dropped the 1998 action.

In a trial heard October 2001, the judge barred all of Seidel’s claims on the basis that the actions for which he was suing started more than six years prior, and hence the time limit for action had expired.

But an appeal heard Sept. 17 of this year determined the cause of action was a series of acts, not a single incident, that had started many years ago.

For that reason, Seidel and his children were ruled to have a valid claim, and were granted costs for both the appeal and the trial.

(Cases taken from recent judgment records for Alberta’s Court of Appeal, Court of Queen’s Bench and provincial court. Nicole Strandlund can be reached at nicole@businessedge.ca)