Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

The trustee in the bankruptcy of a company owned by George Gosbee is suing his estate for $6.4-million, alleging the late Calgary financier failed to pay back a loan used to buy a National Hockey League franchise and diverted some of the company’s money into personal accounts.

Mr. Gosbee, who died by suicide in November, 2017, borrowed US$5-million from a firm with ties to Alberta billionaire Fred Mannix to finance his stake in the Arizona Coyotes seven years ago.

He did not pay the loan back, even after he sold his interest in the team, according to court documents. But Mr. Gosbee moved millions from the company he set up to make the investment, called Gozco Ltd., into his personal bank accounts, including nearly US$1.6-million in the months leading up to his death, the claim by trustee PricewaterhouseCoopers (PwC) alleges.

Story continues below advertisement

The legal action sheds new light into Mr. Gosbee’s troubled final years. The Globe has reported extensively on the mercurial entrepreneur who had founded two oil patch investment banks, Tristone Capital Inc. and AltaCorp Capital Inc., by the time he was 40 – the former of which he sold for $130-million in 2009. His death at the age of 48 shocked even those who knew him well, and sparked a conversation about the hidden ravages of mental illness and addiction, even among society’s elite.

He had been a friend to some of Canada’s most powerful political and business leaders, including Mr. Mannix, the 78-year-old energy and construction magnate. Indeed, Mr. Mannix contributed to a tribute video to Mr. Gosbee following his death, giving a warm, personal recollection about introducing the younger man to hunting, and expressing his admiration of how Mr. Gosbee used the experience as inspiration for investing in a hunting lodge.

The court documents, filed in January, also allege that after Mr. Gosbee died, his widow and representative of his estate, Karen Gosbee, used US$750,000 of Gozco funds, routed through a series of transactions, to pay down family debt with the Bank of Nova Scotia.

In an affidavit, PwC senior vice-president Paul Darby said there appeared to be no valid business reason for the transfer. It was “highly suspicious and seems to have been intended to defraud, delay or hinder the creditors of Gozco,” Mr. Darby said.

None of the allegations has been proven in court, and no date has been set for a hearing. Through her lawyer, Ms. Gosbee said she “denies she was engaged with any fraudulent dealings” and her formal response is coming soon.

“Her husband left her an unholy mess. He was grossly insolvent at the time of his death,” said her lawyer, Bob Thompson. He said Ms. Gosbee – who was living apart from Mr. Gosbee at the time of his death – knew “virtually nothing” about her husband’s finances before his suicide.

Ms. Gosbee has a memoir, titled A Perfect Nightmare: My Glittering Marriage and How It Almost Cost Me My Life, set to be published in October.

Story continues below advertisement

As trustee for Gozco, PwC is suing Mr. Gosbee’s estate for $4.3-million as well as the Canadian dollar equivalent of US$1.6-million. As part of that, the trustee is also seeking the return of the US$750,000, and it names Bank of Nova Scotia and its securities arm, Scotia Capital Inc., as co-defendants. The bank declined to comment on the proceedings, said spokeswoman Heather Armstrong.

According to the court documents, Mr. Gosbee was Gozco’s sole director and officer. Bowfort Capital (AZ) Inc., a company with same senior executives and address as The Mancal Group, loaned Gozco US$5-million to help fund Mr. Gosbee’s US$7.5-million investment in the Coyotes as part of a buying group. Bowfort’s only listed director is Ross Douglas, who at the time was the chief executive of Mancal, the energy and real estate conglomerate founded by Mr. Mannix.

Mr. Mannix’s family business empire began more than a century ago when Frederick Stephen Mannix purchased a team of horses and started moving earth for the Canadian Pacific Railway. Under the guidance of first his son and then his grandsons, Fred and his younger brother Ron, Mannix businesses grew to include a myriad of coal, oil, pipelines, rail and construction interests. The Calgary-based family, famously reticent when it comes to publicity, played a role in building projects ranging from the Trans-Canada Highway to Toronto subway lines.

According to the PwC claim, Gozco owes more than US$10-million to Bowfort from the unpaid loan and interest, even though Gozco received nearly US$9.9-million from sales of Mr. Gosbee’s interests in the Coyotes, the last of which was completed in 2017.

Bowfort’s loan was subject to a promissory note that stipulated the money could not be used for anything other than the purchase of the NHL team, and that Gozco could not take on any other debt without Bowfort’s permission. Mr. Gosbee made the then high-profile deal to buy the team with six partners. They included oil men Scott Saxberg, Craig Stewart and George Fink.

The only money Bowfort received on the loan, which carried an annual interest rate of 25 per cent, was an annual US$50,000 minimum payment, the court documents say.

Story continues below advertisement

PwC says Mr. Gosbee transferred more than $4-million, and then US$1.6-million, from Gozco into his personal accounts, in violation of the promissory note. Ms. Gosbee later told the trustee that the only money that did not flow into her late husband’s accounts was about $220,500 that went to a northern Alberta hunting lodge called Honkers Landing, in which he was a partner, PwC said.

Mr. Gosbee and his ownership group sold the Coyotes to Philadelphia hedge fund manager Andrew Barroway in two tranches: a controlling interest in 2014 and the remainder in 2017. PwC says the proceeds from the sales, $4.7-million and US$6.3-million, were supposed to have gone to Bowfort, but it was never paid.

In August, 2017, the Gosbees opened a family overdraft account with Bank of Nova Scotia worth $2-million, the court documents say. Gozco – by then insolvent, according to PwCguaranteed the loan, in violation of the Bowfort promissory note, and set up security in the form of accounts with Scotia Capital. Mr. Douglas said in an affidavit he was unaware of these transactions, and would not have authorized them.

“There was no business purpose for Gozco granting the security agreement and/or the guarantee, which only appears to have benefited the Gosbees personally, and was contrary to the Gozco business plan,” Mr. Douglas said.

In early November, less than two weeks before Mr. Gosbee died, US$750,000 was transferred from an ATB Financial account used for Gozco business to a Scotia Capital account, the documents show.

In December, Ms. Gosbee, by then the representative of Mr. Gosbee’s estate, wrote to Bowfort to express regret over the personal transfers and said she wanted to protect the interests of Bowfort and Gozco while a full accounting was done, Mr. Douglas said.

Story continues below advertisement

The money in the Scotia Capital account was transferred into another Bank of Nova Scotia account tied to Gozco in January, 2018, according to the claim. It said the transfer had been made at the request of Karen Gosbee. The following day, it was transferred again to the family overdraft account. The balance in the overdraft account was reduced from $2-million to $1.1-million, which PwC said represented the dollar exchange for US$750,000.

In March, 2018, Mr. Douglas demanded that all Gozco money be returned to Bowfort, and that funds under the promissory note (the original loan and interest) be paid. By January, 2020, nothing had been paid, according to the claim. Officials with Bowfort had no comment for this story, their lawyer said.

Following her husband’s death, Ms. Gosbee has become an advocate and speaker on mental health and addiction issues, co-chairing the city of Calgary’s community action group focused on those topics.

A promotional description of her memoir, to be released this fall, states that at the same time Mr. Gosbee owned the Coyotes, his wife “could not ignore his increasingly erratic and self-destructive behavior, which spiraled from affairs and hard-drinking to prostitutes and drug abuse. Nor could she escape his abuse as emotional bullying escalated into dangerous beatings.”

Her lawyer, Mr. Thompson, said: “Karen has found herself in a very difficult situation as a result of George’s financial state at the time of his death. And she is trying to defend herself as well as she possibly can.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies