Toronto Star owners dispute over assets goes to arbitration

The owners of NordStar Capital have begun arbitration over how to divide the company’s assets, including the Toronto Star newspaper.Fred Lum/The Globe and Mail

NordStar Capital owners Paul Rivett and Jordan Bitove entered arbitration on Wednesday after mediation talks failed to resolve a heated dispute between the two former business partners, according to three people familiar with the matter, as the duo is looking to distribute assets including the Toronto Star newspaper.

Mr Rivett and Mr Bitove held two mediation sessions at the end of October, after Mr Rivett went to court claiming he and his partner were at an impasse and could no longer work together. He asked the court to dissolve NordStar, a private equity firm in which they are equal partners, and proposed an auction process to divide its assets. In a brief hearing on October 3, lawyers for both sides agreed to resolve the case out of court and pursue mediation and arbitrationwhich takes place in private.

Mr. Rivett and a spokesperson for Mr. Bitove declined to comment.

Even with the help of a mediator, the sources say the two owners have so far been unable to agree on how to split NordStar’s assets, which also include Metroland Media Group and interests in VerticalScope Holdings Inc. FORA-T and Blue Ant Media Inc. The final outcome may now be in the hands of arbitrator J. Douglas Cunningham, a former Ontario Superior Court judge.

The Globe and Mail Previously reported that Mr. Rivett and Mr. Bitove hoped to settle the matter by the end of the year. The Globe does not identify the sources as they are not authorized to speak publicly.

A complicated issue has been the sharp drop in the share price of VerticalScope, a digital media company that operates some 1,200 online communities. NordStar owns a 37% stake in VerticalScope, which went public last year, and the value of its stake reached more than $260 million in September 2021. It has since fallen to around $47 million in the middle of 2020. a profound rout for technology. shares.

Mr. Rivett and Mr. Bitove teamed up in 2020 to buy Torstar Corp., the parent company of the Toronto Star, for $60 million, and have sought new sources of revenue to fund journalism, such as launching a online casino and sports betting when Ontario opened the market to private operators this year.

But the relationship quickly fell apart, as detailed in a lawsuit Mr Rivett filed in September through companies he controls. He said he and his partner had agreed on cost-cutting measures, but Mr Bitove refused to carry out the plans at the Toronto Star, where he is also an editor.

Mr Bitove also reportedly refused to fund some of NordStar’s early ventures and reneged on an agreement to sell real estate assets to pay off debt.

As the disagreements deepened, Mr Bitove tried to sideline his partner by offering to appoint himself to the boards of various subsidiaries in a bid to exert greater control, the court demanded.

After The Globe reported on the court filing, Mr Bitove responded with a statement through communications company Navigator Ltd., saying he would not apologize for his decisions to the Toronto Star, while saying implying that Mr Rivett preferred ‘cutting costs to the bone’. .”

Despite the apparent animosity between them, the former partners are due to appear on stage together Thursday night as part of a panel discussion following the screening of a documentary on the Toronto Star. The film, titled viral news and produced by TVO, follows the newspaper during a COVID-19[feminine] pandemic lockdown and features interviews with Mr. Rivett and Mr. Bitove before their public separation.