A legal battle between the owners of media properties, including the Toronto Star, is heading to court.
A hearing is scheduled for Monday morning in Ontario Superior Court over a dispute between Paul Rivett and Jordan Bitove, who purchased Torstar Corp. in 2020 for $60-million.
NordStar Capital Inc., in which Mr. Rivett and Mr. Bitove are equal partners, and which controls all of Torstar’s assets, is in breach of a credit facility, according to court documents. The two partners are at odds over how to address the debt.
After the deal, Mr. Rivett assumed the role of chair of Torstar, as well as responsibilities for managing NordStar and other assets. Mr. Bitove became publisher of the Toronto Star. Since then, according to a court application filed by Mr. Rivett in early September, the working relationship between the two partners has broken down, partly because of disagreements over cost-cutting at the media properties.
In addition to the Star, NordStar also controls The Hamilton Spectator, Metroland Media Group, news site iPolitics and a parcel delivery service. In addition, it controls online casino and sportsbook NorthStar Gaming Inc., and has investments in Blue Ant Media Inc. and VerticalScope Inc.
The application, filed through companies that Mr. Rivett controls, asked the court to wind up NordStar and to either divide the assets between him and Mr. Bitove at fair value, or to sell off any assets that neither partner wants.
The filing claimed that Mr. Bitove would not carry out cost-cutting measures that Mr. Rivett wrote were necessary for the company to survive in a challenging media market. Mr. Bitove also blocked the sale of real estate assets after the company breached a credit facility, and attempted to sideline Mr. Rivett by making changes at boards of various subsidiaries, according to the application. It also stated that Mr. Bitove refused requests to split the company’s assets.
None of the claims in Mr. Rivett’s application have been tested in court.
In a statement on Sept. 29, Mr. Bitove wrote that he made “no apologies” for how he ran the newspaper, and rejected an approach to “cut costs to the bone.”
“The approach favoured by those of us who believe in the vital role of the media in a strong and vibrant society is to build a product centred on the trusted journalism that readers demand,” he wrote. “And to use that demand to build a sustainable business.”
With a report from Joe Castaldo