Is he or isn’t he? Rumours fly about the financial health of one of CBC’s biggest talents.
Earlier this week the Globe and Mail’s Streetwise column
ran a titillating story about Michael Wekerle’s battle with Dynamic Funds’ portfolio manager Rohit Sehgal. The dispute centres around a condo Sehgal, Wekerle and Singapore resident Robert Sali bought in 2011 in the Tribeca neighbourhood in New York City.
This isn’t the first controversy facing a Dragons Den personality. Over the years the show’s been dogged by a reputation for being “all show and no go.” Translation: The stars make a lot of deals but close very few of them.
The partnership went south when Wekerle, according to the court documents filed by Sehgal, took out a $1.5 million mortgage on the property (more than his equity) without first putting in place a $2.2 million first mortgage to satisfy the advances by Sehgal and Sali.
In addition, Wekerle signed promissory notes that called for the repayment to each partner of $1.1 million plus one-third of any proceeds on the sale of the condo above $3 million, less fees.
In May 2014 Wekerle put the condo up for sale for just less than $5 million. A month later the price dropped to $4.7 million.
The problem with this arrangement?
Even if the condo did sell at $4.7 million, once you subtract the $1.5 million mortgage and the $1.1 million in proceeds above $3 million due Sehgal and Sali, there wouldn’t be enough left over to pay their $2.2 million in advances.
As a result Sehgal wants the condo sold and all proceeds to be distributed to himself and Sali. In addition he’s seeking damages for Wekerle’s breach of fiduciary duty. In November Sehgal filed an application to force Wekerle into bankruptcy.
For his part, Wekerle claims all is well in his world and this is just another example of Sehgal taking advantage of his generosity. As for being bankrupt Wekerle says, “This is one hundred and ten percent incorrect.”