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8/25/13

HockeyBuzz.com - Travis Yost - Melnyk Staring Down Barrel of Potential Lawsuit

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Melnyk Staring Down Barrel of
Potential Lawsuit
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Alfredsson  spoke  Thursday,  he's  directed  his  vitriol  to  player-­agent  JP  Barry.  Speaking  to  the  Ottawa  Sun

Ian  Esplen  writes...

on  Thursday  and  TSN  on  Friday,  Melnyk  offered  the  following  concerning  the  agency-­client  relationship:

Tanev  Signed
Travis  Yost  writes...

Can  the  Ottawa  Senators  Live  Up  to  the  Hype?
"For  anyone  to  even  suggest  the  remote  possibility  that  Bryan  Murray  is  not  fully  honest  in  his  clear  recollection  of
events  should  be  ashamed  of  themselves,"  Melnyk  told  TSN  on  Friday.  "I  point  the  finger  squarely  on  JP  Barry,  the
man  who  blessed  us  with  the  (Dany)  Heatley  mess."

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"If  you  want  to  play  a  blame  game  -­  that  is  where  you  should  be  looking,"  Melnyk  told  TSN  on  Friday.  "I  have  a
lot  of  respect  for  Daniel.  I  simply  think  he  was  not  told  the  whole  story  or  worse,  was  lied  to.  I  won't  be
commenting  on  this  again.  We  are  busy  and  have  a  Stanley  Cup  to  win."

Emphasis  added.  
Attacks  on  JP  Barry's  character  and  their  already  tenuous  relationship  aside,  Eugene  Melnyk  has  a  very
real  issue  now  on  his  hands.  His  assertion  that  JP  Barry  breached  contract  and  duty  in  his  professional
relationship  with  Daniel  Alfredsson  by  withholding  information  from  the  player  is  a  libelous  one  if
inaccurate,  and  could  very  well  create  the  foundation  for  a  coming  civil  suit.  
An  agent  owes  the  principal  (i.e.  player)  the  following:  (a)  a  duty  to  undertake  the  task  or  tasks  specified
by  the  terms  of  the  agency  (that  is,  the  agent  must  not  do  things  that  he  has  not  been  authorized  by
the  principal  to  do);;  (b)  a  duty  to  discharge  his  duties  with  care  and  due  diligence;;  and  (c)  a  duty  to  avoid
conflict  of  interest  between  the  interests  of  the  principal  and  his  own  (that  is,  the  agent  cannot  engage  in
conduct  where  stands  to  gain  a  benefit  for  himself  to  the  detriment  of  the  principal).

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HockeyBuzz.com - Travis Yost - Melnyk Staring Down Barrel of Potential Lawsuit

Expanding  a  bit  on  these  duties,  a  sports  agent  must  discover/disclose  to  his  clients  any  and  all  material
information  that  is  reasonably  obtainable,  unless  the  information  is  so  clearly  obvious  and  apparent  to
the  athlete  that,  as  a  matter  of  law,  the  sports  agent  would  not  be  negligent  in  failing  to  disclose  it.  [1].
To  date,  Daniel  Alfredsson  has  never  asserted  or  implied  that  his  representation  was  an  issue.  Further,  if
Daniel  Alfredsson  states  that  his  representation  kept  him  informed  of  all  options  available  during  the
process,  then  JP  Barry  can  come  after  the  embattled  Ottawa  Senators  owner  on  personal  injury  grounds.
More  as  it  comes.
-­-­

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The  cupboard  is  filling  up  -­  Top  10  Canucks
prospects
Mike  Augello  writes...

Eugene  Melnyk's  finances  have  entered  public  crosshairs  over  the  past  couple  of  months.  The  Ottawa

Free(Agent)  Grabovski,  Prospect  Everson
Reinstated

Senators'  inability  to  sign  Daniel  Alfredsson  prior  to  the  opening  of  unrestricted  free  agency  negotiations

Eklund  writes...

is  only  fanning  the  flames.  Boston's  already  placed  a  few  timely  phone  calls,  and  could  make  a  formal

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offer  to  the  Swedish  winger  in  just  two  days.  

GARTH  writes...

I  wrote  a  couple  of  days  ago  about  Eugene  Melnyk's  rapid  change  in  business  practice.  Melnyk,  just  two

Richard  Cloutier  writes...

years  ago,  emphatically  argued  that  to  win  in  the  National  Hockey  League,  teams  need  to  spend  at  or
near  the  salary  cap.  Melnyk's  rapidly  walked  a  lot  of  that  back  of  late,  preferring  to  regularly  note  that  his
team:
(a)  plays  in  a  small  market;;  

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(b)  cannot  out-­spend  many  teams  in  the  open  market;;  
(c)  can  only  sign  external  options  on  said  market  on  the  premise  that  they  (i)  want  to  play  in  Ottawa;;
and  then  (ii)  presumably  take  a  paycut;;  and  
(d)  is  struggling  to  break-­even  during  the  regular  season,  relying  only  on  deep  playoff  runs  to  avoid  the
red.  
It  appears  rather  obvious  that  something  along  the  lines  has  changed  with  respect  to  the  team's  financial
health,  and  Eugene  Melnyk  tightening  the  purse  strings  plays  a  large  role  in  that.  Again,  no  one
encourages  reckless  player  expenditures,  but  there  are  fundamental  differences  between  spending,
spending  to  win,  and  spending  a  hair  above  the  cap  floor  on  internal  budgets  to  save  some  cash.  
What  I  find  interesting  is  how  little  we  have  heard  about  Eugene  Melnyk's  $150MM  refinancing  with  CIT
Financial  Ltd.,  administrative  agent  to  a  syndicate  of  lendors.  
The  first  newswire  bit  came  on  February  27,  2013,  where  Melnyk  disclosed  in  an  early  warning  report
that  he  was  in  late  stage  discussions  to  refinance  certain  loans  that  are  secured  by  Melnyk’s  common
shares  of  Trimel.  
About  two  months  later,  Melnyk  confirmed  that  the  refinancing  was  complete.  Via  MarketWired:

Mr.  Eugene  Melnyk  today  announced  that  he  has  completed  the  refinancing  of  the  loans  that  were  secured  by  a
pledge  of  the  53,478,965  common  shares  of  Trimel  Pharmaceuticals  Corporation  (TSX:TRL)  beneficially  owned  by
him  (which  represent  approximately  58.9%  of  the  outstanding  common  shares  of  Trimel).  As  a  result  of  this
refinancing,  these  shares  were  released  from  this  pledge  and  the  right  to  vote  and  sell  these  shares  has  reverted
to  Mr.  Melnyk.  Mr.  Melnyk  has  pledged  a  portion  of  these  shares  as  security  for  new  loans  incurred  in  the

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refinancing  which  also  involves  the  release  of  such  shares  based  on  a  price  formula.
As  previously  announced  by  Trimel,  Mr.  Melnyk  is  not  proceeding  with  the  secondary  offering  described  in  Trimel's
preliminary  prospectus  dated  March  20,  2013.  Depending  on  market  conditions  and  other  factors,  Mr.  Melnyk  may
from  time  to  time  acquire  or  dispose  of  additional  securities  of  Trimel  in  the  open  market,  by  private  agreement
or  otherwise.

That's  a  massive  refinancing,  with  Melnyk's  stake  reducing  from  approximately  58.9%  to  38%  before
exercise  of  the  over-­allotment  option.  [UPDATE:  Melnyk  sold  12  million  common  shares  again  on  April  30,
2013,  dropping  that  number  to  just  29.5%.]  Naturally,  it  makes  me  curious  as  to  Trimel
Pharmaceutical's  performance  in  the  marketplace.  

Well,  that's  some  kind  of  collapse.
And,  remember,  this  comes  on  the  heels  of  other  potentially  significant  financial  negatives,  including  a
contentious  divorce  and  the  Biovail  litigation  settlements  that  may  or  may  not  yet  be  resolved.  
Funny  thing  about  the  Biovail  stuff:  they  were  fighting  up  until  April  '12  concerning  the  Trusts  and
jurisdiction  in  that  matter,  at  least  as  far  as  I'm  aware.  In  one  particular  instance,  a  matter  raised
concerning  jurisdiction  /  trusts  in  New  York  as  opposed  to  the  Cayman  Islands  was  made  public  record
courtesy  Lexis:

Trusts  made  unsecured  loans  to  Melnyk  of  $  88  million  USD  and  $  4  million  CDN.  These  loans  were  on  terms
favorable  to  Melnyk.  In  December  2003,  the  outstanding  amounts  owed  by  Melnyk  on  these  loans  were  $  100.2
million  USD  and  $  5.2  million  CDN.

One  wonders  the  window  in  which  these  particular  loans  need  to  be  paid  back.
There's  a  lot  of  smoke  here.  If  only  there  was  a  newspaper  publication  in  the  city  that  could  investigate
further.  Maybe  ask  a  question  or  two.  
-­-­

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More  from  Travis  Yost
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»  Answer  This  Question
»  Gene  Melnyk  Money  VIII:  More  Loans
»  Why  Can't  the  Ottawa  Senators  Afford  Anything?
»  Age  and  Ice  Time

 
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Gene Melnyk Money III
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Travis  Yost

Which  Team  is  the  Most  Interesting  in  the  NHL,
Part  2
Bill  Meltzer  writes...

 Ottawa  Senators  Blogger  •  RSS  •  Archive  •  CONTACT

Meltzer's  Musings:  Monday  Quick  Hits
Mike  Augello  writes...

Make  sure  to  follow  Travis  on  Twitter!
-­-­

Free(Agent)  Grabovski,  Prospect  Everson
Reinstated
Ian  Esplen  writes...

On  the  dawn  of  free  agency  and  in  the  wake  of  Paul  MacLean's  three-­year  extension,  General  Manager

The  cupboard  is  filling  up  -­  Top  10  Canucks
prospects

Bryan  Murray  attempted  to  quell  some  distress  within  the  fan  base  about  reported  financial  difficulties

Eklund  writes...

within  the  organization,  specifically  concerning  owner  Eugene  Melnyk.  I  wrote  about  some  of  Melnyk's

Gagne  Still  Focused  on  Staying  in  Philly

flailing  operations  previously  here  and,  more  notably,  here.  I  maintain  that  Melnyk's  alleged  financial

GARTH  writes...

difficulties  and  the  finances  of  Senators  Sports  and  Entertainment  are  not  mutually  exclusive.

Future  Consideration
Richard  Cloutier  writes...

Murray  made  some  convincing  arguments  that  the  team  was  ready  to  spend  on  both  captain  Daniel
Alfredsson  and  a  top-­six  forward,  although  he  concentrated  much  of  his  energy  on  public  worry  about
extending  the  Swedish  captain.  Bryan  Murray's  sort  of  a  genius,  but  this  seems  like  quite  the  strawman,
because  for  as  long  as  I've  been  writing  about  it,  I've  been  more  or  less  convinced  the  team  would  open
up  the  check  book  to  Alfredsson.  

Oilers  One  of  the  Oldest  Teams  in  the  League?
Travis  Yost  writes...

Answer  This  Question
John  Jaeckel  writes...

Did  Kane  Really  Deserve  the  Smythe?

There  were  weirdly  glaring  inconsistencies  in  the  press  conference,  too.  This  quote  from  Bryan  Murray,
and  this  quote  from  Daniel  Alfredsson,  for  example,  are  polar  opposites.  
Beyond  retaining  the  captain,  I've  expressed  significant  doubt,  and  maintain  such  reservations  with
respect  to  adding  talent  through  free  agency,  or  perhaps  more  accurately,  spending  money  that  exceeds
the  purported  $50MM  budget.  It  was  interesting  to  me  that  Ottawa  made  it  very  public  record  that  the
team  had  targeted  winger  David  Clarkson.  Twenty  minutes  later,  Paul  MacLean  blew  it  to  hell  by  relaying
the  alternative:  Clarkson  had  approached  Ottawa.  Ultimately,  I  believe  the  latter  is  accurate,  because
Clarkson  immediately  jumped  on  a  plane  to  approach  an  Edmonton  organization  that  has  so  far  spent
little  on  the  2013-­2014  roster.  
Additionally,  I  reference  Melnyk's  very  own  comments  about  the  acquisition  of  a  free  agent  at  the  draft.
Right  from  Sens  Chirp's  entry:

He  even  hinted  that  the  only  way  they  could  pursue  a  big  name  free  agent,  was  if  Alfredsson  decided  not  to  come
back  another  season.

These,  again,  are  conflicting.  
But,  above  all  else,  the  press  conference  struck  me  as  very  defensive.  On  the  surface,  the  team  tried  to
mitigate  damage  by  stating  they  were  ready  to  spend.  Implicitly,  they  didn't  say  much  of  anything.

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Suggesting  that  the  team  would  be  between  the  floor  and  the  ceiling  is  a  non-­answer,  and  in-­line  with
the  previously-­referenced  $50MM  internal  budget.  There's  nothing  wrong  with  the  response,  other  than
that  it  doesn't  act  as  the  dismissal  the  team  probably  thought  it  would.  
Whatever  the  reason,  it  didn't  seem  to  quiet  the  questioning  any.  The  Ottawa  Citizen  decided  to  pour
gasoline  on  the  flames,  dedicating  an  entire  entry  to  Melnyk's  finances.  You  may  notice  that  everything
read  in  that  post  sounds  oddly  familiar:  it's  nothing  more  than  a  cut  and  paste  job  from  what  I  wrote  just
one  day  ago,  and  coincidentally  enough  leaves  out  all  of  the  stories  I  either  couldn't  confirm,  or  hadn't
yet  finished  researching.  
So,  naturally,  I'm  going  to  write  about  some  of  the  other  stuff  here.  Again,  all  matter  of  facts.  
The  first:  a  Maclean's  and  Vancouver  Sun  report  on  the  failing  PurGenesis,  a  Quebec-­based  biotech
company  specializing  in  production  of  spniach-­based  antioxidant  medications  and  cosmetics.
Unlike  the  struggling  Trimel,  PurGenesis  is  a  private  company,  but  the  information  acquired  by  Maclean's
certainly  suggests  that  little  to  no  profit  has  been  made  through  present  day.  In  four-­plus  years  of
operations,  the  company  has  more  or  less  chewed  through  $8.2MM  in  federal  and  provincial
governmental  grants  and  loan  guarantees  with  no  quantifiable  yield.  There's  no  evidence  to  suggest  the
company  is  anything  more  than  one  of  the  80%  of  drug  companies  that  fail  in  early  years  of  ops  -­-­  I
called  on  multiple  occasions  to  the  Quebec  office  for  comment,  but  on  no  day  was  anyone  present  to  field
my  call.  
There's  far  more  than  just  a  failing  company  here.  Eugene  Melnyk's  the  president,  chariman,  and  largest
investor  in  the  company.  He  made  a  large  investment  in  the  company  a  year  prior  to  receiving
governmental  funding,  although  he  maintains  his  investment  came  after.  
How  much?  The  Vancouver  Sun  had  that  tidbit.

Besides  taxpayer  money,  Boulet  said  he  and  Melnyk  have  sunk  considerable  personal  savings  into  the  company:
$500,000  by  Boulet,  another  $500,000  from  his  siblings,  and  $13  million  from  Melnyk.

Said  Christian  Audet,  a  regional  director  for  Canada  Economic  Development:

“PurGenesis  is  a  young  company  that  developed  a  multi-­million-­dollar  project,  and  there  was  significant
fundraising  from  the  private  sector  in  which  [Melnyk]  decided  to  support  the  project.”

The  second:  Melynk  Racing  Stables  ("hereinafter  MRS")  is  grossly  underperforming  its  annual  averages
[prorated  to  end-­of-­year]  and  has  slid  demonstrably  since  the  middle  of  last  decade.  It's  additionally
worth  noting  for  rather  obvious  reasons  that  MRS  is  owned  and  operated  by  both  Eugene  and  Laura
Melnyk.  

MRS  suddenly  changed  its  business  model  in  February  '13,  according  to  a  report  from  the  Daily  Racing
Form:

Melnyk  will  sell  the  majority  of  the  remaining  broodmares  of  his  Winding  Oaks  Farm  at  the  Fasig-­Tipton  Kentucky
winter  mixed  sale  on  Monday,  part  of  a  strategic  plan  to  move  away  from  a  full-­scale  breeding  operation  to  focus

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on  a  quality  racing  stable.
Mr.  Melnyk  said,  ‘I  love  the  business,  I  want  to  stay  in  it,  but  we’re  going  to  have  to  come  up  with  a  different
plan,’  ”  Winding  Oaks  manager  Phil  Hronec  said.  Melnyk  bought  the  Ocala,  Fla.,  property,  formerly  Mockingbird
Farm,  in  2001.

The  third:  Melnyk's  privately  invested  into  a  big  Manhattan  beauty  company  known  as  Fusion  Brands,
Incorporated  ("hereinafter  Fusion").  
Eugene  Melnyk,  as  owner  and  chairman,  first  made  headlines  by  appointing  now-­former  chief  executive
Caroline  Pieper-­Vogt  into  the  aforementioned  role.  The  working  relationship  did  not  end  well.

"While  she  served  as  Fusion's  CEO,  and  was  receiving  substantial  compensation  from  Fusion,  Pieper-­Vogt  engaged
in  a  series  of  unlawful  acts  designed  to  promote  her  own  personal  interests  at  the  expense  and  to  the  detriment  of
Fusion,"  according  to  the  complaint  in  New  York  County  Court.
"In  particular,  Pieper-­Vogt  misused  corporate  funds,  misappropriated  corporate  opportunities  for  her  own  personal
benefit,  operated  her  own  private  commercial  businesses  while  serving  as  Fusion's  CEO,  and  misappropriated
Fusion's  confidential  business  information  and  trade  secrets.  At  the  same  time,  she  grossly  mismanaged  the
company,  repeatedly  placing  her  own  personal  interests  above  the  interests  of  Fusion  and  its  shareholders."

Fusion's  legal  troubles  have  not  stopped.  Four  suppliers  have  recently  attempted  to  force  Fusion  into
Chapter  11  bankruptcy,  alleging  Fusion's  failure  to  remit  payment  for  goods  and  services.  
As  a  privately-­traded  company,  Fusion's  financials  are  unavailable.  
The  fourth:  it  is  apparent  that,  individually,  the  alleged  negative  performance  of  Melnyk's  businesses  may
not  unilaterally  contribute  to  his  overall  financial  outlook.  Collectively,  I'm  of  the  opinion  that  the
numbers  are  adding  up.
The  most  important,  to  the  point  where  it's  seemingly-­undeniable,  is  that  Eugene  Melnyk's  contentious
divorce  with  now  ex-­wife  Laura  Melnyk  may  or  may  not  have  acted  as  a  large  contributor  to  a  potentially
massive  financial  decline.  Not  to  act  in  any  way,  shape,  or  form  as  a  parallel  or  comparison,  we  are
cognizant  of  other  sports  owners  whose  divorce  records,  litigation,  and  outcomes  are  readily-­available  to
the  public.  Frank  McCourt,  prior  owner  of  the  LA  Dodgers  and  of  similar  individual  valuation,  settled  with
his  wife  for  $130MM.  
A  trial  court  in  Barbados  sealed  Melnyk's  divorce  records.  The  outcome  may  or  may  not  have  financially
impacted  the  Ottawa  Senators  owner  in  a  negative  manner.  
The  fifth:  a  public  plea  by  Eugene  Melnyk  for  City  of  Ottawa  support  in  his  proposed  casino  deal.  Melnyk
has  went  to  war  with  Mayor  Jim  Watson  about  the  placement  of  the  casino,  stressing  that  he's  worked
diligently  on  the  project  for  seven  years  time.  The  rally  for  support  comes  with  the  hopes  of  landing  a
casino  on  his  home  turf,  right  near  Scotiabank  Place,  now  Canadian  Tire  Centre.  Mayor  Jim  Watson  sees
Rideau  Carleton  Raceway  as  the  only  suitable  host  for  a  new  gaming  center,  and  has  voted  accordingly.  
The  above  and  prior  posts  are  brought  to  the  attention  of  hockey  fans  as  matter  of  facts,  in  the  hopes
that  some  of  the  rumors  floating  around  can  either  be  confirmed  or  denied  by  the  local  and  national
media.  Over  the  past  three  months,  I  have  heard  particularly  bleak  stories  concerning  team  finances  that
I  have  never  been  able  to  confirm.  Very  specific,  very  discouraging.  Others  in  the  industry  have  heard  the
same  and  more,  yet  have  not  been  able  to  find  the  appropriate  links  to  publish  them  with  accuracy.
Unfortunately,  what  I  have  been  able  to  cull  doesn't  act  as  a  smoking  gun  of  sorts,  nor  is  it  an  attempt  to
vilify  any  one  or  more  individuals.  The  only  goal  here  is  to  use  publicly  available  information  in  an  effort  to
mine  total  truth.  
The  rumors  will  likely  live  on  until  the  financial  stuff  is  either  rectified  or  swept  under  the  rug.  The  Ottawa
Citizen  bringing  the  story  to  a  larger  audience  should  be  of  assistance  to  either  confirm  or  deny  much  of
the  stuff  that's  floating  out  there.
More  as  I  have  it.
-­-­

Thanks  for  reading!

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More  from  Travis  Yost
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»  Answer  This  Question
»  Gene  Melnyk  Money  VIII:  More  Loans
»  Why  Can't  the  Ottawa  Senators  Afford  Anything?
»  Age  and  Ice  Time

 
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Gene Melnyk Money VI
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August  6,  2013,  12:24  AM  ET  [12  Comments]

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Travis  Yost

Free(Agent)  Grabovski,  Prospect  Everson
Reinstated
Mike  Augello  writes...

Team  Canada's  Choices  -­  Goaltending  For  Sochi
Bill  Meltzer  writes...

 Ottawa  Senators  Blogger  •  RSS  •  Archive  •  CONTACT

Meltzer's  Musings:  Monday  Quick  Hits
Ian  Esplen  writes...

Make  sure  to  follow  Travis  on  Twitter!
-­-­
Curiously,  investigating  what  seems  to  me  the  sweetheart  deal  to  end  all  others  for  George  Gosbee  and
Anthony  LeBlanc  in  their  purchase  of  the  Phoenix  Coyotes  with  74%  borrowed,  I  stumbled  upon  the
resume  of  one  Brian  Crombie.

The  cupboard  is  filling  up  -­  Top  10  Canucks
prospects
Richard  Cloutier  writes...

Oilers  One  of  the  Oldest  Teams  in  the  League?
Ian  Esplen  writes...

Sizing  up  the  Pacific-­  Goaltending
John  Jaeckel  writes...

Did  Kane  Really  Deserve  the  Smythe?
Crombie  appears  to  be  Eugene  Melnyk's  go-­to  guy  for  all  things  financing.  His  particular  resume  touts  a

Eklund  writes...

long-­line  of  work  with  Melnyk  entities,  including  PurGenesis,  BioVail,  and  Trimel  Pharmaceuticals

Gagne  Still  Focused  on  Staying  in  Philly

("Trimel").  Two  of  these  businesses  were  referenced  in  an  earlier  post  about  some  of  Melnyk's  struggling

Travis  Yost  writes...

ventures.  

Answer  This  Question
GARTH  writes...

On  Crombie:  the  Trimel  part  was  an  interesting  one.  His  LinkedIn  -­-­  which  appears  rather  up-­to-­date  -­-­

Did  You  Say,  "Yoots"?

does  not  make  mention  of  any  involvement  with  the  company.  Nor  does  it  make  reference  to  any
involvement  with  the  Ottawa  Senators  Hockey  Club.  
His  resume,  on  the  other  hand,  suggests  alternatively.  What's  puzzling  is  the  job  description  during  his
stay  as  Trimel's  "Financial  and  Strategic  Advisor",  which  leads  off  with  the  following:

Reading  through,  it  just  seems  like  Crombie  is  Eugene  Melnyk's  right-­hand  man  -­-­  the  guy  who  has  more
or  less  guided  those  in  charge  through  the  acquisition  and  financing  periods  since  rescuing  the  team  from
bankruptcy.
But,  for  a  Harvard  graduate  with  a  resume  more  impressive  than  one  I  could  generate  in  ten  lifetimes,
it's  hard  to  believe  a  blip  about  the  Ottawa  Senators  accidentally  slipped  into  his  job  description  for  Trimel.
Which  would  beg  the  rather  obvious  question:  why  is  Trimel  involved  with  the  Ottawa  Senators?
The  same  Trimel,  mind  you,  that's  manufactured  a  rather  bleak  financial  outlook  of  late.  Things  have  not
yet  improved.  

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And,  where  to  begin  with  the  last  sentence?  I  mean,  nary  a  word  about  [another]  round  of  take-­out
financing  from  the  Ottawa  Senators  brass  prior  to  the  above.  The  list  of  discrepancies  with  the  team's
finances  have  been  exhaustively  documented  over  the  past  couple  of  years,  but  all  silence  on  this  very
front.
The  rest  of  the  Trimel  entry  talks  about  his  work  to  acquire  and  attempt  to  acquire  other  organizations,
including  Fusion  Brands,  Inc.  and  Hemosol,  respectively.  The  Trimel  subsection  is  standalone  and  unique
in  this  when  compared  to  his  work  with  other  firms,  where  job  descriptions  tend  to  parallel  with
position(s)  held.  
There  have  been  rumors  in  the  past  about  the  team,  varying  from  Doug  MacLean's  theory  about  the
team  being  for  sale,  to  Nick  Kypreos'  take  that  the  team  was  considering  another  refinancing.  Both  of
those  were  transcribed  at  T6S.  Eugene  Melnyk  has  more  or  less  dismissed  all  in  rapid  fire.  
But,  the  evidence  continues  to  mount  that  there's  far  more  going  on  in  Ottawa  than  what's  being
reported.  And,  interestingly  enough,  I  heard  the  following  from  a  source  I  would  consider  solid  on  this
very  matter:

That's  second-­hand  information,  and  should  be  treated  as  much.  But,  boy,  does  it  match  well  with  what's
been  written  over,  and  over,  and  over  again  around  here.
-­-­

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»  Answer  This  Question
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»  Why  Can't  the  Ottawa  Senators  Afford  Anything?
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Gene Melnyk Money V
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Travis  Yost

Leafs  Prospects  Impressing  At  World  Junior
Exhibition
Richard  Cloutier  writes...

Which  NHL  Team  is  the  Most  Interesting?  Part  1
Richard  Cloutier  writes...

 Ottawa  Senators  Blogger  •  RSS  •  Archive  •  CONTACT

Which  Team  is  the  Most  Interesting  in  the  NHL,
Part  2
Eklund  writes...

Make  sure  to  follow  Travis  on  Twitter!
-­-­
I've  been  paying  a  bit  of  attention  to  the  George  Zimmerman  trial  down  in  Florida.  The  arguments  tend
to  intrigue  me  far  more  than  the  facts  do  in  litigation,  and  this  particular  trial  isn't  really  an  exception.

The  Most  Shocking  NHL  Trades  in  My  Memory...
Give  Me  Your  Most  Surprising..
Bill  Meltzer  writes...

Meltzer's  Musings:  WJC  Camp,  Knuble,
Brind'Amour,  Team  of  2000s  Line  Combos
GARTH  writes...

One  thing  I  thought  was  sort  of  interesting  during  closing  arguments  was  how  the  prosecution  tried  to
lay  out  a  number  of  inconsistencies  in  what  George  Zimmerman  had  either  done  or  said  from  the  time  of
Trayvon  Martin's  death  until  present.  Lying  is  sort  of  an  art  form,  and  the  best  way  to  corner  a  liar  is  by
presenting  two  or  more  instances  where  the  individual  (or  organization)  has  represented  completely
opposing  points  or  arguments.  

Eyes  Fore  Okposo
GARTH  writes...

Future  Consideration
Jan  Levine  writes...

Offseason  20+  Questions:  How  Much  Money  and
Years  in  Bank  for  Hank?
Ian  Esplen  writes...

It's  funny,  because  the  one  flaw  I  found  in  the  prosecution's  outlining  of  Zimmerman's  flawed  timelines
is  that  prosecutor  Bernie  De  La  Rionda  -­-­  who  presented  his  closing  argument  on  Thursday  -­-­  tried  to

The  cupboard  is  filling  up  -­  Top  10  Canucks
prospects

inject  emotion  into  the  inconsistencies.  I  get  that  the  prosecution  wants  the  jury  to  connect  with

Adam  French  writes...

Trayvon  Martin  on  a  certain  level,  but  it  came  off  as  a  guy  sort  of  pleading  rather  than  showing.  

Top-­10  Prospects  :  Oilers  (1-­10)

I  think  it's  a  personal  opinion  of  mine,  but  speaking  from  the  heart  when  dealing  with  material  facts  and
the  like  seems  to  be  high-­risk,  low-­reward.  The  indictment,  which  is  really  the  end  goal  of  an  arguer  in
this  instance,  comes  from  the  statements  themselves.  When  the  jury's  been  presented  with  such
incongruities,  you  have  to  believe  they  can  draw  the  logical  conclusion  that  the  inaccuracies  are
manifesting  for  a  reason.  CNN  paraded  a  half-­dozen  legal  analysts  on  national  television,  and  a  few  held
that  same  sentiment.  Lay  it  out,  and  let  the  statements  speak  for  themselves.  
Which,  naturally,  brings  me  to  Ottawa  Senators  owner  Eugene  Menlyk,  who  fired  off  a  dozen  salvos  in
the  direction  of  the  city  of  Ottawa,  et  al.  after  his  casino  plan  for  Scotiabank  Place/Canadian  Tire  Centre
went  awry.
Melnyk  is  upset  about  the  way  the  bidding  process  was  handled.  It's  his  opinion  that  there  was  a  distinct
lack  of  transparency,  one  designed  to  shift  the  proposed  casino  to  the  Rideau  Carleton  Raceway  on  Albion
Road,  and  only  the  Rideau  Carleton  Raceway  on  Albion  Road.  Melnyk's  plan  was  shot  down  by  a  10-­1
vote  by  city  council's  finance  committee.  
I  believe  there  are  legitimate  questions  about  whether  or  not  Melnyk  received  a  fair  shake  in  this  whole
ordeal.  What  I'm  more  interested  in,  though,  is  the  line  of  quotes  he  delivered  in  what  can  more  or  less
be  called  a  tirade  in  front  of  the  media.  
In  pertinent  part:  

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Melnyk  was  asked  if  the  the  hockey  team  makes  a  profit.  "Substantial  losses."

We're  trying  to  compensate  lack  of  capital  by  changing  the  way  we  conduct  our  hockey  operations.  And  that  is
develop  young  players.

I  can't  spend  another  $5M-­$6M  dollars  on  a  player.  The  revenues  aren't  there.  The  team  will  not  be  viable."

On  the  one  hand  you  have  fans  screaming  'why  aren't  you  spending  this?'  Well  guess  what.  We  don't  have  the
money  for  it.

There's  only  30  teams.  People  are  after  these  properties.  But  they're  not  after  losing  properties.

And  this  threat:

Melnyk  was  adamant  he  won't  sell  the  team  or  leave  Ottawa.  "Leave  where?  Here?  No  no  no  no.  I  just  won't
spend  any  more  money."

If  Eugene  Melnyk  is  to  be  believed,  he's  essentially  arguing  that  Senators  Sports  and  Entertainment  is
hemorrhaging  money  annually.  I  find  this  interesting  for  a  number  of  reasons.  
How  do  these  quotes  line  up  with,  well,  what's  already  been  said  about  this  team  in  instances  where  an
owner  wasn't  been  grieving  on  his  casino  loss?  What  about  in  instances  that  predate  his  recent  financial
hardships?  [Exhibit  A,  Exhibit  B,  Exhibit  C,  Exhibit  D  
Eugene  Melnyk,  April  2009:

"To  compete  these  days,  you  are  pretty  much  committed  to  spending  to  the  cap,"  said  Melnyk,  who  met  with  the
players  in  the  dressing  room  following  a  team  photo  at  Scotiabank  Place  yesterday.  "(But)  you  can  only  do  that
for  so  long  and  you  need  a  winning  team  to  be  able  to  support  that.

Senators  president  Cyril  Leeder,  March  2010.

“The  factors  are  pretty  straightforward,”  he  said.  “(When  you  miss  the  playoffs)  your  season  ticket  base  typically
trails  for  one  year.  So  if  you  have  a  bad  year,  you’ll  often  see  that  follow  on  during  the  next  season.  And
conversely,  if  you  have  an  improvement  in  the  year,  you’ll  see  that  carry  into  the  next  season  as  well.”

Eugene  Melnyk,  September  2011:

Q:  You’re  now  paying  much  less  in  payroll,  can  you  break  even  without  being  a  playoff  team  this  year?
A:  Yes.  Put  it  this  way.  We  should  not  be  in  business  if  we  have  to  make  the  playoffs,  just  to  break  even.  That’s
not  fair.  That’s  your  bonus.  That’s  your  bonus.

Eugene  Melnyk,  September  2011

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ou  guys  make  the  playoffs,  I  make  money.  And  I  make  a  lot  of  money.  But  we  shouldn’t  have  to  do  that.  I
shouldn’t  have  to  do  that  every  year.

Eugene  Melnyk,  March  2012:

“Up  until  this  year,  we  had  to  make  two  rounds  of  playoffs  just  to  break  even,”  he  said  in  a  telephone  interview
Thursday.  “Now,  we  are  doing  well  enough  that  we  break  even,  pretty  much,  just  finishing  off  the  season,  and
everything  else  kind  of  gets  ‘bonused’  out.”

Days  (!)  later,  via  Cyril  Leeder,  March  2012:

We  operate  right  at  the  very  margin  in  Ottawa,  we  have  for  20  years.

Eugene  Melnyk,  March  2012:

Melnyk  said  that  once  his  team  clears  up  the  financial  “hangover”  from  previous  contract  buyouts  for  players  like
Jonathan  Cheechoo  and  Ray  Emery,  “things  can  all  come  together  where  the  business  of  hockey  actually  pays.

Jonathan  Cheechoo  and  Ray  Emery  are  no  longer  on  the  books.
Eugene  Melnyk,  one  month  later:

In  a  year-­end  conference  call  with  the  Ottawa  media  on  Monday,  Melnyk  said  the  Senators  can’t  go  “toe-­to-­toe”  in
spending  with  the  big-­market  teams,  suggesting  that  players,  and  in  particular  Karlsson,  will  have  to  take  a  haircut
to  play  in  Ottawa.

Eugene  Melnyk,  July  2012:

Owner  Eugene  Melnyk  told  the  Sun  in  an  exclusive  e-­mail  Tuesday  night  he  has  no  issue  with  spending  money,
however,  he  only  wants  players  who  want  to  play  in  Ottawa.

Erin  Crowe,  Executive  VP/CFO,  Winter  2012:

We’re  not  making  widgets  or  software,  we’re  putting  on  hockey  games  and  concerts,  but  you  still  need  that
infrastructure  behind  an  operation  to  support  the  generation  of  $120-­million  in  revenue  each  year.”

Emphasis  added.
Eugene  Melnyk,  July  2013:

“I  have  no  financial  issues  whatsoever,”  the  Ottawa  Senators  owner  told  councillors  Tuesday.

I'll  end  with  a  pair  of  quotes  from  Eugene  Melnyk  on  another  venture  with  the  Mississauga  St.  Michael's
Majors,  May  2011.  

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It’s  going  to  take  money,  commitment  and  I’m  prepared  to  do  that  and  the  City  has  to,  and  they  have  to  date,  be
side-­by-­side  with  us  in  making  sure  that  that  happens.

The  second,  date  unknown  via  Sunaya  Sapurji

Eugene  Melnyk  once  told  @Mkor1980  &  I  that  he  would  own  the  team  until  the  day  he  died.

Eugene  Melnyk  sold  the  Mississauga  St.  Michael's  Majors  in  May  2012.  
-­-­

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More  from  Travis  Yost
»  Gene  Melnyk  Money  VIII:  More  Loans
»  Why  Can't  the  Ottawa  Senators  Afford  Anything?
»  Age  and  Ice  Time
»  El  Capitan?
»  Jared  Cowen:  Travis  Hamonic,  He  is  Not

 
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Gene Melnyk Money VI
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Travis  Yost

Free(Agent)  Grabovski,  Prospect  Everson
Reinstated
Mike  Augello  writes...

Team  Canada's  Choices  -­  Goaltending  For  Sochi
Bill  Meltzer  writes...

 Ottawa  Senators  Blogger  •  RSS  •  Archive  •  CONTACT

Meltzer's  Musings:  Monday  Quick  Hits
Ian  Esplen  writes...

Make  sure  to  follow  Travis  on  Twitter!
-­-­
Curiously,  investigating  what  seems  to  me  the  sweetheart  deal  to  end  all  others  for  George  Gosbee  and
Anthony  LeBlanc  in  their  purchase  of  the  Phoenix  Coyotes  with  74%  borrowed,  I  stumbled  upon  the
resume  of  one  Brian  Crombie.

The  cupboard  is  filling  up  -­  Top  10  Canucks
prospects
Richard  Cloutier  writes...

Oilers  One  of  the  Oldest  Teams  in  the  League?
Ian  Esplen  writes...

Sizing  up  the  Pacific-­  Goaltending
John  Jaeckel  writes...

Did  Kane  Really  Deserve  the  Smythe?
Crombie  appears  to  be  Eugene  Melnyk's  go-­to  guy  for  all  things  financing.  His  particular  resume  touts  a

Eklund  writes...

long-­line  of  work  with  Melnyk  entities,  including  PurGenesis,  BioVail,  and  Trimel  Pharmaceuticals

Gagne  Still  Focused  on  Staying  in  Philly

("Trimel").  Two  of  these  businesses  were  referenced  in  an  earlier  post  about  some  of  Melnyk's  struggling

Travis  Yost  writes...

ventures.  

Answer  This  Question
GARTH  writes...

On  Crombie:  the  Trimel  part  was  an  interesting  one.  His  LinkedIn  -­-­  which  appears  rather  up-­to-­date  -­-­

Did  You  Say,  "Yoots"?

does  not  make  mention  of  any  involvement  with  the  company.  Nor  does  it  make  reference  to  any
involvement  with  the  Ottawa  Senators  Hockey  Club.  
His  resume,  on  the  other  hand,  suggests  alternatively.  What's  puzzling  is  the  job  description  during  his
stay  as  Trimel's  "Financial  and  Strategic  Advisor",  which  leads  off  with  the  following:

Reading  through,  it  just  seems  like  Crombie  is  Eugene  Melnyk's  right-­hand  man  -­-­  the  guy  who  has  more
or  less  guided  those  in  charge  through  the  acquisition  and  financing  periods  since  rescuing  the  team  from
bankruptcy.
But,  for  a  Harvard  graduate  with  a  resume  more  impressive  than  one  I  could  generate  in  ten  lifetimes,
it's  hard  to  believe  a  blip  about  the  Ottawa  Senators  accidentally  slipped  into  his  job  description  for  Trimel.
Which  would  beg  the  rather  obvious  question:  why  is  Trimel  involved  with  the  Ottawa  Senators?
The  same  Trimel,  mind  you,  that's  manufactured  a  rather  bleak  financial  outlook  of  late.  Things  have  not
yet  improved.  

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And,  where  to  begin  with  the  last  sentence?  I  mean,  nary  a  word  about  [another]  round  of  take-­out
financing  from  the  Ottawa  Senators  brass  prior  to  the  above.  The  list  of  discrepancies  with  the  team's
finances  have  been  exhaustively  documented  over  the  past  couple  of  years,  but  all  silence  on  this  very
front.
The  rest  of  the  Trimel  entry  talks  about  his  work  to  acquire  and  attempt  to  acquire  other  organizations,
including  Fusion  Brands,  Inc.  and  Hemosol,  respectively.  The  Trimel  subsection  is  standalone  and  unique
in  this  when  compared  to  his  work  with  other  firms,  where  job  descriptions  tend  to  parallel  with
position(s)  held.  
There  have  been  rumors  in  the  past  about  the  team,  varying  from  Doug  MacLean's  theory  about  the
team  being  for  sale,  to  Nick  Kypreos'  take  that  the  team  was  considering  another  refinancing.  Both  of
those  were  transcribed  at  T6S.  Eugene  Melnyk  has  more  or  less  dismissed  all  in  rapid  fire.  
But,  the  evidence  continues  to  mount  that  there's  far  more  going  on  in  Ottawa  than  what's  being
reported.  And,  interestingly  enough,  I  heard  the  following  from  a  source  I  would  consider  solid  on  this
very  matter:

That's  second-­hand  information,  and  should  be  treated  as  much.  But,  boy,  does  it  match  well  with  what's
been  written  over,  and  over,  and  over  again  around  here.
-­-­

Thanks  for  reading!
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»  Gene  Melnyk  Money  VIII:  More  Loans
»  Why  Can't  the  Ottawa  Senators  Afford  Anything?
»  Age  and  Ice  Time

 
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Gene Melnyk Money VIII: More
Loans
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-­-­
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made  reference  to  another  loan  for  the  Ottawa  Senators  at  some  point  during  2012,  something  that  had

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Trimel  Corporation  released  their  Consolidated  Financial  Statements  for  Q2  on  July  31,  2013.  The  section
on  long-­term  debt  was  interesting:

One  of  two  conclusions  can  be  made:  (1)  the  Ottawa  Senators  and  Trimel  took  out  another  series  of
loans  in  2012;;  or  (2)  the  Ottawa  Senators  are  paying  the  loan  Trimel  took  out  in  2012,  and  Eugene
Melnyk's  businesses  are  more  or  less  functioning  as  one  larger  entity.  Neither  is  particularly  encouraging.  

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HockeyBuzz.com - Travis Yost - Gene Melnyk Money VIII: More Loans

Perhaps  that's  the  reason  why  people  are  upset  over  a  playoff-­team  with  a  blessing  of  young  talent
playing  it  cheap  on  a  $50MM  internal  budget.  Perhaps  that's  the  reason  why  people  aren't  carrying
Eugene  Melnyk's  water  as  he  tries  to  make  a  last-­ditched  effort  to  land  another  revenue  stream  courtesy
a  nearby  casino.  And,  perhaps  that's  the  reason  why  people  aren't  buying  the  nonsense  peddled  by  the
owner  on  the  hockey  team's  allegedly  hemorrhaging  financials.  
Last  night's  interview  shed  a  lot  of  light  on  Ottawa  /  Eugene  Melnyk's  state  of  finances.  Melnyk  was  clear
and  concise:  the  team  isn't  going  to  be  spending  much  in  the  foreseeable  future,  and  Bryan  Murray  was
either  lying  or  covering  for  the  owner  /  team  when  he  told  Daniel  Alfredsson  that  he  could  land  Bobby
Ryan  and  provide  a  blank  check  to  Ottawa's  seventeen-­year  captain.  
The  problem  is  that  no  one  can  keep  their  story  straight  right  now,  and  every  time  new  details  emerge,
we  find  a  higher-­up  in  the  organization  contradicting  what  another  higher-­up  said  previously.
-­-­

Thanks  for  reading!
 Join  the  Discussion:  »  27  Comments  »  Post  New  Comment

More  from  Travis  Yost
»  The  Highs  and  the  Lows
»  Answer  This  Question
»  Why  Can't  the  Ottawa  Senators  Afford  Anything?
»  Age  and  Ice  Time
»  El  Capitan?

 
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