Colorado Peace Ride

A businessman involved in a Niagara Falls-based biodiesel start-up company that sought taxpayer-funded federal subsidies has been called unwilling to be open and above board by the Superior Court Justice who presided over his failed $1.6-million lawsuit against the company that owns the Toronto Raptors.

Mark Michalkoff, a Toronto businessman involved in Oleo Energies, Inc., in Niagara Falls, lost a legal fight Wednesday he and one of his other companies waged against Maple Leaf Sports Entertainment over his season tickets to Toronto Raptor basketball games.

Michalkoff also testified in court that a Toronto-based company of which he is president — DLF Solutions Inc. — hasnt filed income tax returns since 2006 despite annual gross revenues claiming to be in the millions of dollars, according to the ruling by Justice Beth Allen.

DLFs failure to file income tax returns since 2006 completes the picture of a company and principals who are unwilling to be open and above board about financial affairs notwithstanding their substantial claim for damages, Allen wrote in her ruling, issued Wednesday.

A spokesperson for MLSE said the company was happy with the outcome.

We are very pleased with the judges decision, said MLSE spokesperson Rajani Kamath. The findings were very clear and we believe the right judgment was made.

The lawsuit was heard in a Toronto court from Nov. 14 to 18.

Although Michalkoffs specific title at Oleo is unclear, corporate filings for Oleo Energies list him as being the administrator of the corporation.

Since a brief meeting in May with Michalkoff and his associate at Oleo, Roman Hrycyshyn, the Niagara Falls Review has made numerous requests to the company for comment, all unsuccessful.

Michalkoff and Hrycyshyn didnt return voicemail messages on Friday.

Michalkoff and DLF Solutions had sued Maple Leaf Sports and Entertainment Ltd. (MLSE) in 2007 for $1.6 million in damages over a disagreement with MLSE about the Toronto Raptors season tickets DLF had bought.

The lawsuit alleged that MLSE violated the terms of DLFs seat license by installing another row of seats in front of DLFs court-level seats, with DLF seeking damages for lost profits and future economic loss.

Allens judgment dismissed Michalkoffs claim as unfounded and questioned the credibility of his testimony.

The poor state of DLFs financial affairs, as reflected in its deficient financial disclosure, does not put Michalkoff or DLF in a positive light, Allen wrote.

It wasnt clear from the ruling what the scope of DLFs business operations are. The ruling said that an aspect of DLFs business involves furnishing gift cards as corporate incentives to clients in the pharmaceutical industry.

Michalkoffs testimony about DLFs corporate structure was implausible, Allen wrote.

When asked about the corporate structure of DLF, Michalkoff gave evidence I found evasive and implausible given his testimony that he was instrumental in DLFs incorporation and in setting up its structure, Allen wrote.

In Niagara Falls, Michalkoff has been part of the team working to get Oleo Energies up and running at its location at the former Lubrizol plant. In an October interview, Mayor Jim Diodati said the company had 18 employees. The mayor also said at the time that the potential for Oleo to hire another 100 people depended on the success of its federal funding bid.

The whole process, the whole project, the whole plan is all contingent upon acquiring federal funding, Diodati said in October. Without that its not going to happen.

In November, Niagara Falls MP and Justice Minister Rob Nicholson said that there was no federal funding available to the company.

Nicholson said Friday that as Justice Minister and Attorney General, he doesnt comment about cases before the courts or court decisions.

I can tell you that this company had an application, it was thoroughly reviewed, as they all are, Nicholson said. They were turned down and thats where it stands.

Biodiesel is an alternative fuel for diesel engines made from vegetable oils or other organic matter. Diodati has said the company could bring much-needed green-tech manufacturing jobs to Niagara Falls.

The funding is believed to be the Natural Resources Canada ecoENERGY for Biofuels Program, which subsidizes manufacturers of renewable fuels according to production levels. It is not an up-front cash infusion.

Diodati couldnt be reached for comment on Friday.

target=_blank>bclarkson@nfreview.com

Justice Allens ruling:

DLF Solutions Inc. and Mark Michalkoff vs. Maple Leaf Sports and Entertainment Ltd.

Tags: Sports Entertainment