City of Toronto Issues Statement of Claim against MFP Financial Services Limited |
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The City of Toronto has issued and served a Statement of Claim against MFP
Financial Services Limited. The City claims various relief against MFP,
including $10 million for breach of contract, negligent misrepresentation and
breach of fiduciary duty.
The City and MFP entered into a standstill agreement on December 27, 2001, to
permit Toronto City Council to consider and vote on MFP's proposed settlement
offer. As part of the standstill agreement, the City paid MFP $4 million, due
January 1, 2002 for the ensuing lease period.
Nevertheless, MFP indicated on January 21, 2002 that it intended to immediately
issue a claim against the City. Consequently, the City issued its claim against
MFP on January 21, 2002. The claim was served on MFP today.
The City understands that MFP's settlement offer is still open for acceptance.
The City's legal counsel will report on this matter further to members of
Toronto's Audit Committee at its February 8 meeting. The matter will also be
discussed at the next regular meeting of Toronto City Council on February 13,
14 and 15.
As this is now a matter before the Courts, the City of Toronto will not issue
any further public comment.