Conrad Black’s house at 26 Park Circle Lane in Toronto is shown in a handout photo.The Canadian Press
The undisclosed buyer of Conrad Black's mansion in Toronto is multimillionaire businessman Harold Peerenboom, former chair of the Toronto Harbour Commissioners, Federal Court of Canada documents reveal.
Mr. Peerenboom, who owns the international consulting firm Mandrake and says he is an old friend of Mr. Black, confirmed to The Globe and Mail on Thursday that he offered to pay $14-million for the 23,000-square-foot home at 26 Park Lane Circle in the ritzy Bridle Path neighbourhood.
"I was trying to assist Conrad out of a difficult situation where if I had not bought the property, he would not be able to live in the house he was raised in," he said. "It's been in Conrad's family for 60 years or more."
The price was $5-million less than an appraisal commissioned by the Canada Revenue Agency, which placed liens on the property for tens of millions of dollars in unpaid taxes.
The CRA said in court that Mr. Peerenboom agreed to lease back the mansion to Mr. Black at an annual rent of $155,000.
The agency also said the sale included a verbal agreement with the purchaser to give Mr. Black 50 per cent of the proceeds of any future sale of the property. But Mr. Peerenboom said: "That was never agreed. There is nothing verbal that is part of the contract.
"The only thing is he had a first right of refusal if he sold the property and he had to pay $155,000 a year and make all the payments for maintenance, repair and property taxes."
Mr. Peerenboom, who has known Mr. Black for 50 years, estimated that it could cost up to $500,000 a year to run the property, which has three full-time employees, including a gardener who lives on estate.
The CRA asserted in the court documents that Mr. Black might sell the house and leave Canada without paying about $31-million in taxes owed to the Canadian and U.S. governments. Mortgages on his 6.6-acre Toronto property amount to $13-million.
Mr. Black's lawyer, David Nathanson, denied that his client has any plans to leave the country.
Mr. Black gave up his Canadian citizenship to gain a seat in the British House of Lords. He has a temporary resident permit that is set to expire in September, but Mr. Nathanson said his client intends to apply for permanent residency and eventually his Canadian citizenship.
The sale to Mr. Peerenboom has been put on hold as a result of the liens, which are being contested by Mr. Black in the Federal Court. The CRA says Mr. Black owes $12.3-million in unpaid taxes to the Canadian government and $19.3-million to the U.S. tax department.
Mr. Black has filed an appeal to overrule the liens while the tax dispute is argued in court. He is expected to appear in the Federal Court in Toronto next week.
In court filing released Thursday, one of Mr. Black lawyers, David Foulds, argued that Mr. Peerenboom's offer will end on June 30 and that the sale should be allowed to go ahead. Mr. Black offered to put the $14-million into a trust until the tax dispute is settled in the Tax Court of Canada..
Justice Denis Gascon ruled in May that there was "reasonable grounds to believe" that Mr. Black would "waste, dissipate, liquidate or otherwise transfer his assets so as to become less able to pay the tax amounts assessed."
Mr. Peerenboom is embroiled in a high-profile defamation lawsuit against Isaac Perlmutter, the media-shy founder and chief executive officer of Marvel Entertainment.
Both men spend their winters at an exclusive compound in Palm Beach, Fla., where they had a dispute over a tennis instructor that allegedly resulted in more than a thousand hate letters against Mr. Pereenboom.
Mr. Peerenboom has subpoenaed records from Marvel that he believes will show that Mr. Perlmutter – one of the largest shareholders in Walt Disney Co. – launched a vicious hate-mail campaign, falsely accusing him of murder and child molestation to put pressure on him to leave the gated community.
The litigation includes DNA evidence collected from one of the letters that match DNA on a water bottle that Mr. Perlmutter's wife, Laura, left in court when her husband was deposed on Feb. 27, 2013. Mr. Peerenboom paid a private lab to conduct tests, which showed a 97.6 per cent possibility that the DNA came from Laura Perlmutter.
A Florida judge is expected to rule within weeks whether to allow the DNA as evidence.
Robert Fife