Dion Entertainment Corp -
Dion worried about its multi-billion-dollar bingo deal
Dion Entertainment Corp
DIO
Shares issued 52,267,597
1999-10-01 close $2.5
Friday Oct 1 1999
Also Border Capital Corp (BOP)
by Brent Mudry
While Dion Entertainment prefers to downplay Howe Street stock promoter Louis
Dion's involvement with the company, now run by brother Leo, brother Lou is a major
player in the court petition recently filed against Border Capital. The court action, filed
Tuesday by Howe Street lawyer Rose-Mary Liu Basham in the Supreme Court of
British Columbia, features Louis Dion, Leo Dion, MCG Millenium Capital Group, the
Leo A. Dion Family Trust and Promo Consulting as petitioners.
The named respondents include Border Capital Corp., Border Capital (Nevada) Corp.,
IBC Investments, its directors Gregory Dureault, a Vancouver lawyer, president
Ottavio Boffo and Des Bosa, both Vancouver developers, Gaming Properties &
Investments LLC, Millenium Entertainment Group and Bingonet (CY) Ltd. IBC,
formerly Millenium Investments, and Bingonet are both based offshore in Nicosia,
Cyprus.
The petition seeks injunctions restraining the respondents from dealing with IBC shares
held by Border, Millenium Entertainment and Mr. Dureault, dealing with related patents,
and carrying out business of the joint venture outside of Canada and United States,
pending resolution of current arbitration. Ms. Basham claims that Border and IBC have
unilaterally abolished the management committee of the joint venture, which comprises
"two members including Louis Dion."
Ms. Basham also claims the petitioners will suffer "irreparable harm" if the injunctions
are not granted. "The management and direction of a potential multi-billion dollar
business will be affected and interfered with by the respondents' actions," states the
petition.
The case traces back to early 1996, when IBC was the registered owner of certain
bingo software patents with the U.S. trade name BingoNet. Ms. Basham claims that
IBC, controlled by Mr. Dureault through his sole shareholding in MEC, held the patents
in trust for the Dion brothers and Mr. Dureault. "In or about the spring of 1996, Louis
Dion and Leo Dion had extensive experience and expertise in the gaming industry and
in particular the bingo game and had extensive contacts in the gaming industry," states
the petition.
The Dion brothers' disastrous other bingo-stock promotion, Double Eagle
Entertainment, caught the attention of the Vancouver Stock Exchange later that year.
In August of 1996, the VSE vetoed a series of Double Eagle deals. The exchange was
concerned about Louis Dion's management agreement, agreements for loans from
Sodak Gaming International, a $1.5-million private placement, the company's
acquisition of the right to manage a Czech bingo and lottery venture, and the granting
of bonus shares and warrants to Louis Dion for guaranteeing the Sodak loan.
Former broker Theresa Gortva, a close corporate assistant to Leo Dion, is adamant
that brother Lou has no current involvement with Dion Entertainment. "Leo fired his
brother several years ago," says Ms. Gortva, a minor Howe Street legend in her own
right for her past celebrations over a then new office at LOM Western Securities.
The court petition claims that in April of 1996, the Dion brothers and Mr. Dureault
agreed to exploit the bingo patents through IBC. This included setting up a joint venture
with Wyoming-based Gaming Properties, controlled by Mr. Bosa, Harmen Verbrugge
and Gerardus Nowee. Border came into the picture by June of 1996, and in August, it
took over GPI's obligations, after a reverse takeover.
The joint venture had a rocky history. Beginning in September of 1996 and running
through the spring of 1997, various disputes erupted amongst the Dions, Millenium
Capital, IBC, GPI and Messrs. Dureault, Verbrugge, Nowee and Bosa over the number
of Border shares they would receive, the ownership and control of IBC, the beneficial
ownership and rights to the patents, and control over the operation and management of
the joint venture.
In spring of 1997 the sparring partners settled their differences. In an April 30, 1997,
agreement, IBC, Millenium Capital and Louis Dion agreed that he would be retained to
provide personal services to find and creating gambling opportunities. Shortly after the
first settlement agreement was reached, disputes again arose between the parties,
according to the petition. The squabble remained unresolved, and in March of 1998,
the Dion brothers and their fellow petitioners in the current case filed suit against the
Verbrugge group. In July of 1998, the warring sides agreed to settle their squabbles
through arbitration.
After numerous months of negotiations, the Dion group and the Border group agreed
to settle their disputes on July 30 of this year. Once again, no happy settlement
emerged, however, and by Sept. 14, the parties had reached an impasse. The Dions
claim that Border has unilaterally taken steps to negotiate patent deals with third parties.
The petition claims that on Sept. 20, Border's Mr. Bosa told Louis Dion that Border
expected to enter into a contract with Interactive Entertainment Technologies LLC in
the week of Sept. 27. On Sept. 28, the Dion's marched off to court and launched their
petition.
"It is anticipated that the potential economic benefits that may be derived from
developing and marketing the patents and its related technologies may be in the
multi-billion dollar range," states Ms. Basham in her court filing.
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