The bankruptcy order taken by Rohit Sehgal against Michael Wekerle, a dragon on CBC's Dragons' Den, has been dismissed.
"Mr. Wekerle paid Mr. Sehgal what he was owed. The bankruptcy order was dismissed on consent." said Jim Grout, lawyer with Thornton Grout Finnigan LLP, who was representing Mr. Wekerle.
Last week, Mr. Wekerle, who is also the CEO and biggest shareholder in Difference Capital Financial Inc., sent a payment to Mr. Sehgal of just under $1.1-million (U.S.).
"Mr. Wekerle paid the undisputed debt and has agreed to account for any balance" said Catherine Francis, lawyer with Minden Gross LLP, who is Mr. Sehgal's counsel. "He's going to pay any refund of taxes to us and we will continue to civil proceedings for anything else."
In court last week, Ms. Francis argued that despite receiving the $1.1-million, she did not consider the debt settled in full, and that her client is owed additional funds for artwork and furniture that was procured for the Manhattan condo at the centre of the legal spat. The amount in dispute is "a couple of hundred grand" according to Mr. Grout.
Mr. Wekerle said in an interview in January that he has willing to pay $1.1-million "and not a penny more" to Mr. Sehgal.
The legal bust-up between the two former close friends, erupted in August, 2014, when Mr. Sehgal, a long time fund manager with Dynamic Funds sued Mr. Wekerle for non-payment of a $1.4-million (U.S.) debt, stemming from the sale of a Manhattan condo in which they had co-invested.
"I brought him into the property. He did nothing.I did all the legal work myself. I didn't charge him anything on the fees." said Mr. Wekerle in an interview in January. "I'm very upset with the way he's acting. He's putting pressure to get an additional 200 grand. And he's got this lawyer [Ms. Francis] and she's just a pitbull. I'm not a person who fights like that." he said.
With his bankruptcy proceedings fading into the rear view mirror, Mr. Wekerle has a lot on his plate at Difference Capital. The publicly-traded merchant bank he co-founded in 2012 is in a tough spot. Last week the company announced an additional $625-thousand debt investment in e-learning company, Bluedrop Performance Learning Inc., But for the most part Difference has been keeping its powder dry.
"We have cut back and we have not funded any of the investments that we have found that had problems." said Mr. Wekerle in an interview last month.
The company's original portfolio of 40 companies has been a disappointment. Difference is sitting on heavy paper losses on Internet company, WG Ltd., or World Gaming, which is its biggest single investment with an investment of around $21.5-million. Meantime, alternative energy company, Lignol Energy Corp, in which Difference invested $18-million was put into receivership in the fall. Difference wrote down its investment in Lignol to $1-million as a result. Difference posted a loss of $13-million in the second quarter of 2014 and a $12-million loss in the third quarter. Fourth quarter earnings are expected next week.
Difference's share price is down about 70 per cent since going public. The merchant bank has also seen a deluge of executive departures from board members and partners. In mid-January, Jamie Brown who held the position of managing partner tendered his resignation.