A Calgary energy investment banker has sued a former business partner for $5 million over alleged fraudulent ownership and operation of three private jets and a helicopter.
In a lengthy statement of claim filed last month, Thomas Budd alleges Marc Bombenon misrepresented costs of the aircraft and secretly pocketed profits, misled him on who were other partners in the purchases of the aircraft, overcharged him for fixed costs of the aircraft and falsified documents related to their use.
The acrimonious dispute between Budd and his company, Focus Energy Advisory Corporation, and Bombenon and MBE Jet Ltd., a bank holding company, began in 2008 and came to a head earlier this year.
It also involves a loan that was initially in excess of $4 million.
Budd alleges he initially engaged in discussions three years ago with another investor, Scott Hutcheson, who put him in touch with Bombenon.
They subsequently co-purchased three Hawker Beechcraft 390 aircraft (2007, and 2008 and 2010 models) and a Bell 206 BE Jet Ranger helicopter.
"Focus and Budd say the relationships between MBE and Bombenon are irretrievably broken down such that the helicopter should be sold to repay Budd and that MBE and Bombenon are responsible for any shortfall," says the lawsuit.
Budd admits he did not read the final agreement of the loan in question. Bombenon says in his statement of defence filed last week that Budd did not do due diligence in reading the agreements before they were completed.
Bombenon denies in his defence all of the allegations of wrongdoing.
He says there were no representations made to Budd "about the acquisition of an interest in an aircraft being at cost and that there were no mark-up or acquisition fees."
Bombenon admits that he told Budd that he made profit through fixed charges paid by the limited partners on a monthly basis, but denies making any representations to suggest this was the only manner in which either he or MBE made profits.
He also says Budd "monopolized" use of the first aircraft, limiting its availability to other partners.
Generally regarding the statement of claim, Bombenon states that Budd's "post-acquisition protestations regarding the value of aircraft, financing and ownership knowledge are fabrications."
He says the plaintiffs "have fabricated and exaggerated claims as part of a repeated and concerted effort to cause damage and loss to MBE and Bombenon" and have suffered no loss or damage themselves.
Budd is seeking an interim and permanent injunction restraining Bombenon and MBE from operating any of the aircraft, pending further court order.
He is also seeking judgment for all amounts allegedly due for overcharging fixed aircraft costs on flying, fixed cost allocations and adjustments in connection with the operation of the aircraft.
As well, he wants an order directing sale of one of the jets, $5 million for fraud, repayment of the loan, an interim injunction for production of books, computer system and records to a third party forensic examiner, and a restraining injunction against making any alterations to the books.
None of the allegations by either side have been proven in court.
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