The largest media group in Atlantic Canada has launched a multi-million-dollar lawsuit against another media company it alleges was not “forthcoming about a number of questionable business practices” before a 2017 takeover.
SaltWire Network says it has initiated the lawsuit with the Nova Scotia Supreme Court.
The media entity was created in April 2017 when Halifax Herald Ltd. purchased 27 of Transcontinental Inc.’s newspapers and websites in Atlantic Canada.
The move made SaltWire Network the largest newspaper chain in the region.
But in a news release Wednesday, SaltWire alleges that Transcontinental overstated its printing and distribution business as well as misrepresented revenue streams associated with a number of assets.
According to the news release, the lawsuit claims that Transcontinental “substantially overstated the revenues the business would produce, hid material facts regarding the condition of its assets and was not forthcoming about a number of questionable business practices.”
“We have attempted to resolve our differences with Transcontinental on a business basis without resorting to the courts,” said SaltWire CEO Ian Scott in the release.
“But regrettably, we have not been successful.”
SaltWire alleges the company has suffered significant damages and loss and is claiming for general, special, aggravated and punitive damages — as well as interest and costs.
Transcontinental has 15 days to respond to the legal challenge.
“Although we have been made aware of these legal proceedings, we have not yet received them. We intend to defend ourselves,” said Patricia Lemoine, a spokesperson for Transcontinental.
“These matters being before the courts, we will not provide any further comments.”
In a news release on Thursday, Transcontinental went on to allege that SaltWire has not fulfilled its payment obligations and is in breach of contract with them. Therefore, Transcontinental is considering a counter-suit against SaltWire.
“We are confident that the sale of our media assets in Atlantic Canada was conducted based on fair, accurate and timely information. We intend to vigorously defend ourselves in court,” said Transcontinental’s president and CEO, François Olivier, in the news release.