Feud between Toronto Star owners Paul Rivett and Jordan Bitove heading to arbitration

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A bitter dispute between NordStar Capital Inc. owners Paul Rivett and Jordan Bitove is moving from the public courts and into arbitration to resolve a rift over the future direction of the company, whose assets include the Toronto Star newspaper, an Ontario court heard on Monday.

“This application involves what essentially is just simply a corporate divorce between two former friends and business partners,” Jason Wadden, who is a partner at Tyr LLP and represents Mr. Rivett’s companies, said at the virtual hearing. “We have had productive conversations this morning, which have resulted in a resolution of this matter.”

Mr. Wadden said the parties have been in touch with J. Douglas Cunningham, a former Ontario Superior Court Justice, to act as mediator and arbitrator, but still need to confirm he will take on the role. (Mr. Cunningham declined to comment.)

“The parties have been trying to work through this, and were intending that this wouldn’t be aired in the public,” Mr. Wadden said.

Robert Thornton, a lawyer with Thornton Grout Finnigan LLP who represents Mr. Bitove, said he and his client too have agreed to arbitration.

Ontario Superior Court Justice Peter Cavanagh endorsed the joint request from the lawyers to set the matter aside.

The outcome of the hearing, which lasted less than five minutes, only moved the venue in which the feud could be resolved. Significant questions remain over how the two partners will split up the assets of NordStar, which include not only the Toronto Star, but the Hamilton Spectator, community news publisher Metroland Media Group, a delivery service, an online casino and sportsbook, and a stake in Blue Ant Media Inc.

Mr. Rivett and Mr. Bitove teamed up to buy Torstar in 2020 in a deal valued at $60-million, and promised to invest in the company and usher in a new era of growth, even in a challenging environment for newspapers. But the relationship started unravelling earlier this year, according to a court application filed in September by companies Mr. Rivett controls.

The court filing said the partners, who are 50/50 owners of NordStar, are “deadlocked” over the direction of the company. Mr. Rivett asked the court to wind up NordStar and that PricewaterhouseCoopers be appointed to oversee an auction process to divide the company’s assets between the partners, or sell those neither wanted.

In the court filing, Mr. Rivett claimed his partner reneged on cost-cutting plans at the Toronto Star and Metroland, and changed his mind about selling real estate assets to repay a credit facility that NordStar had breached. He also accused Mr. Bitove, who is publisher of the Toronto Star, of improperly trying to appoint himself to the boards of subsidiaries to gain more control and sideline his partner.

Mr. Bitove responded last week with a statement through communications firm Navigator, saying he would make “no apologies” for the decisions he made as publisher.

In a memo sent to Toronto Star employees on Monday, Mr. Bitove deplored the fact the feud had become public. “I regret that this dispute has intruded into your day-to-day work,” he wrote, adding his preference has been to “insulate the Star from distraction and public spectacle by resolving any partnership issues through private arbitration.”

The tone of the e-mail suggests the relationship between the two men is still damaged. “My dedication to building a more competitive and resilient Toronto Star won’t be dampened by the acts of one individual,” he wrote.

Mr. Bitove added that he was not aware of any “default” by NordStar owing to the performance of the Toronto Star, a reference to Mr. Rivett’s claim regarding the credit facility. “Not even close,” he wrote. “Regardless, I have taken steps to defend against any adverse consequences that could arise from any steps taken by our lender, as a consequence of Mr. Rivett’s actions.”

Unifor, which represents workers at Torstar, said on Friday it was “blindsided” by news of the court application to wind up the parent firm, and was unaware the relationship between Mr. Rivett and Mr. Bitove had broken down.

A spokesperson for Mr. Bitove said he would not comment. Mr. Rivett did not respond to a request for comment.