RE:RE:Vertical scope Hi Don:
in last report check out vertical scope details in note 8 investments in associated businesses. This is where you see current portion of long term debt at 7.2 million and long term debt at 144.5 million for total of 152. Torstar is definitely responsible for this. They own 56percent of the company. That is basic corporate law.
Up until now this has not been disclosed. This was achieved through accounting trickery. They are showing an asset called investment in associated business of 110 million which includes vertical scope. Problem is this is not as asset. That same note shows vertical scope having non current assets of $300 milllion. I would guess that is all goodwill from all the acquisitions they have been doing.
i believe the OSC has forced this disclosure. With no real assets you are left with 152 million debt. The 44 percent partner walks away as he has hidden all his money in Cayman Islands as you indicated. Can't touch him.
this appears to be all legal using accounting standards but is all a slight of hand.
The vertical scope debt of 152 million is the trigger for bankruptcy. They can't pay this back and cash flows not enough to service this debt. Also the gaming of the system by acquiring companies and posting goodwill as an asset is over for vertical scope.
prem Watsa may be able to sue saying he was duped on all this. The case would be a pretty good one I think.