BANYAN TREE FOUNDATION GIFT PROGRAM CLASS ACTION – SETTLEMENT
FREQUENTLY-ASKED QUESTIONS (FAQ’S)
UPDATED: JANUARY 25, 2012
1. What are the terms of settlement?
A Settlement Fund of $11,000,000.00 has been established.
Legal costs and administration costs will be deducted from the Settlement Fund as approved by the court. The balance of the Settlement Fund will be distributed to Class Members on a pro-rata basis in accordance with participation in the Banyan Tree Foundation Gift Program (“Gift Program”), measured on the total amounts of charitable donation tax receipts issued by Banyan Tree to each Class Member.
The settlement releases the defendants from further legal action against them by Class Members in connection with issues raised in the proceeding.
2. Do I have to pay legal fees or costs to participate in the settlement?
No, there is no cost to you to participate in the settlement. The Court has approved payment of legal fees/costs to Class Counsel out of the Settlement Fund. You will not be asked to pay any further fees or costs.
3. What happens to the promissory notes I signed in favour of Rochester Financial Limited?
The Court granted a declaration that all loan agreements and promissory notes signed by Class Members in favour of Rochester Financial Limited in connection with the Gift Program are unenforceable by Rochester, its successors or assigns.
This means that you will not be required to make any payment to Rochester or anyone else under the loan agreement or promissory notes.
4. How will CRA treat the settlement payment I receive?
The settlement payment is a compromise of all monetary damages you may have suffered, including but not limited to: the cash donation paid, the security deposit paid, interest paid to CRA on re-assessment, payments made on promissory notes, and professional accounting or legal fees incurred. It is unknown how CRA will treat the settlement payment.
We are not your individual tax advisors and are not in a position to provide individual tax advice on this issue. Class Members should obtain their own individual tax and/or accounting advice on this issue.
5. If I opted-out of the proceeding, can I still participate in the settlement?
Individuals who opted-out of the Class Proceeding will have an opportunity to opt back in. To do so, they will be required to complete and file an Opt-In Form. A copy of the form is available on our website at www.classactionlaw.ca .
6. What is the timing to opt back in?
A fully-completed Opt-In Form must be delivered to Nicholas Mastroluisi, CA, Petinelli Mastroluisi LLP , 1 James Street South, 6 th Floor, Hamilton, Ontario, L8P 4R5; by fax to: 905-522-6574 or by e-mail to: nickm@petmas.ca , on or before March 30, 2012.
Any Opt-In Forms received after March 30, 2012, will not be valid and any such individuals will not be entitled to participate in this settlement. The deadline will be rigorously enforced without extensions or indulgences.
7. Can I proceed with a legal claim against any of the defendants?
No, the terms of settlement include a release and bar of claims against the defendants in connection with the issues raised in this proceeding.
8. What do I have to do to receive money under the Settlement Fund?
You can assist us in administration and implementation of the settlement by providing us with copies of the charitable donation tax receipts you received in connection with your participation in the Gift Program. This documentation will enable us to confirm the level of your participation in the Gift Program and will allow us to more easily calculate the payment you are entitled to from the Settlement Fund.
9. What is the timing of settlement? When will I receive my money?
The Administrator and Class Counsel hope that the settlement can be fully administered with all money being paid out in the first half of 2012. The administration of the settlement and the efficiency of our timing will be improved if Class Members cooperate with us by providing us with copies of the charitable donation tax receipts they have, or, alternatively, clear confirming documentary evidence proving participation in the Gift Program.
10. I participated in the Banyan Tree Foundation Gift Program for the 2002 taxation year. Am I included in the settlement?
2002 donors are not included in the Class Proceeding or the settlement. The Class Proceeding and the class as certified includes only individuals who participated during the years 2003 through 2007.
11. I did not accept the Canada Revenue Agency prior offer. Is there anything I should do?
You can and should request the Canada Revenue Agency extend the time for you to accept the earlier settlement offer. CRA may or may not do so. That is up to CRA. We suggest that you contact CRA as soon as possible with a formal request for an extension of time to accept the offer and that you do so.
12. If I have further questions not answered above, what should I do?
You can send us your question in writing:
by mail to:
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SCARFONE HAWKINS LLP
Barristers & Solicitors
One James Street South, 14th Floor
P.O. Box 926, Depot #1
Hamilton, Ontario
L8N 3P9
Attention: David Thompson/Matthew G. Moloci
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905-523-5878 |
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banyanclassaction@shlaw.ca |
It is most efficient for us to respond to written questions sent by mail, fax or email.
If you prefer to telephone us, you can do so at telephone number 905-526-4394.
MEDIA STATEMENT RE: SETTLEMENT
Click Here to Read Media Statement
SETTLEMENT APPROVAL
The Ontario Superior Court of Justice approved settlement in this matter following a hearing on January 17, 2012.
Click Here to Read the Order of Justice Strathy, dated January 17, 2012
Click Here to Read National Post article, dated January 24, 2012
The settlement involves a fund of $11,000,000.00 being established which will be distributed to Class Members on a pro-rata basis in accordance with participation in the Banyan Tree Gift Program.
The Court also granted a declaration that all loan agreements and promissory notes executed by Class Members in favour of Rochester in connection with the Gift Program are unenforceable by Rochester, its successors or assigns.
The Court approved a notice program which will be carried-out shortly. Notice will go out to all Class Members.
Individuals who opted-out of the class proceeding will have an opportunity to opt back in.
To do so, they will be required to complete and file and Opt-in Form.
It is hoped that full administration of the settlement can be carried-out very quickly.
We will be following-up with Class Members to attempt to verify information on hand in respect of their participation in the Gift Program.
Further updates will follow.
NOTICES AND FORMS
Click Here to Read Post Approval Notice
Click Here to Read Clarifying Notice
Click Here to Read Opt-In Form
Click Here to Read Opt-Out Form
SETTLEMENT AND CLASS COUNSEL FEE APPROVAL HEARING - JANUARY 17, 2012, court room #4 at Osgoode Hall, 130 Queen Street West, Toronto, Ontario
Click Here to Read the proposed draft Order of the Plaintiffs re: Settlement and Class Counsel Fee Approval
Click Here to Read the Motion Record of the Plaintiffs re: Settlement and Class Counsel Fee Approval
Click Here to Read the Factum of the Plaintiffs re: Settlement and Class Counsel Fee Approval
Click Here to Read the Brief of Selected Authories of the Plaintiffs re: Settlement and Class Counsel Fee Approval
Click Here to Read Objections Brief - Volume 1
Click Here to Read Objections Brief - Volume 2
Click Here to Read Objections Brief - Volume 3
Click Here to Read Objections Brief - Volume 4
Click Here to Read Supplementary Objections Brief
Click Here to Read the Motion Record of the Monitor re: Settlement and Class Counsel Fee Approval
Media Statement
Click Here to Read Media Statement
Settlement of Action
This action has been settled.
The settlement is subject to court approval.
A court approval hearing will take place on January 17, 2012, at 10:00 a.m. at 361 University Avenue, Toronto, Ontario.
The settlement agreement and distribution plan will be published here prior to the hearing date.
Terms of Proposed Settlement
The plaintiffs will be asking for a court declaration that all promissory notes in favour of 1106999 Ontario Limited, Rochester Financial Limited, and any other lender who provided loans under the Gift Program, are void and unenforceable against class members.
In addition, a settlement fund of $11,000,000.00 will be established.
The court will be asked to approve a counsel fee of $2,750,000.00, representing 25% of the settlement fund, plus payment of disbursements and applicable taxes.
$350,000.00 will be set aside for claims administration costs to be paid from the settlement fund.
The balance of the settlement fund will be distributed to class members on a pro-rata basis in accordance with participation in the Banyan Tree Gift Program.
Class members who object to the proposed settlement should submit written objections to class counsel on or before January 6, 2012.
Those objections should be submitted as follows:
BY MAIL TO:
THE BANYAN TREE CLASS ACTION
SCARFONE HAWKINS LLP
Barristers & Solicitors
One James Street South, 14th Floor, P.O. Box 926, Depot #1
Hamilton, Ontario, L8N 3P9
ATTENTION: DAVID THOMPSON/ MATTHEW G. MOLOCI
OR BY FAX TO: 1-905-523-5878
OR BY EMAIL TO: banyanclassaction@shlaw.ca
Objections should include the following information:
- name, address, telephone number, fax number, mail and e-mail address of class member;
- a brief statement of the nature and reason for the objection; and
- whether the Class Member intends to appear at the settlement approval hearing in person or by counsel and, if by counsel, the name, address, telephone number, fax number and e-mail address of counsel.
Any objections to the settlement will be filed with the court and may be considered at the settlement approval hearing of January 17, 2012.
If the court approves the proposed settlement, all class members will be bound by the terms of settlement, unless they have previously opted-out.
Click Here to Read the Notice of Proposed Settlement of Class Action
Click Here to Read the Order of Justice Strathy, dated November 17, 2011
BANYAN TREE FOUNDATION GIFT PROGRAM CLASS ACTION
FREQUENTLY-ASKED QUESTIONS (FAQ’S)
UPDATED: DECEMBER 22, 2011
Court Approval
1. Why is this settlement subject to Court approval?
All settlements in class proceeding matters are subject to Court approval.
The Court must review the settlement and all the circumstances and be satisfied that the settlement is fair, reasonable and in the best interests of Class Members.
2. When is the court approval hearing?
January 17, 2012 at 10:00 a.m. at 361 University Avenue, Toronto, Ontario, before the Honourable Mr. Justice Strathy.
3. Do I have to come to the Court hearing in order to receive settlement benefits?
No, the lawyers will answer any questions the Judge may have. Participation in the Court hearing is not required for those who wish to participate in the settlement and see it approved. All Class Members and members of the public are welcome to attend the Court hearing at their own expense.
4. What if I don’t like the settlement? What can I do?
If you don’t like the settlement, you may object to it. You should submit an objection in writing to Class Counsel on or before January 6, 2012. Your objection should be submitted by mail:
The Banyan Tree Foundation Gift Program Class Action
Scarfone Hawkins LLP
Barristers & Solicitors
One James Street South, 14 th Floor
P.O. Box 926, Depot 1
Hamilton, Ontario
L8N 3P9
Attention: David Thompson/Matthew G. Moloci
Or by fax: 905-523-5878
Or by e-mail: banyantreeclassaction@shlaw.ca
Your written objection should include:
(a) your name, address, telephone number, fax number and e-mail address;
(b) a brief statement of the reason for your objection;
(c) whether you intend to appear in Court in person or by counsel, and if by counsel, contact information for your counsel.
Class Counsel will file any objections to the settlement with the Court for the Judge’s consideration at the January 17, 2012, hearing.
5. May I speak at the hearing?
You are welcome to attend the hearing and ask the Court for permission to speak about the settlement. You may pay a lawyer to attend and speak for you, however, it is not required.
6. What happens if I do nothing at all?
If you do nothing and you are a Class Member, you will receive money and a declaration that the promissory note is void and unenforceable under the settlement. Further notice will follow and you may be required to provide information and documentation in support of your claim.
Settlement Details
7. If the settlement is approved by the Court, how much money will I receive?
The amount you will receive is unknown, however, you will be entitled to a payment from the settlement fund pro-rata with other Class Members in accordance with your level of participation in the Banyan Tree Foundation Gift Program. We estimate the payment amount to be $550.00 per $10,000.00 of total donation.
The settlement payment is a compromise of all monetary damages you may have suffered, including but not limited to: the cash donation paid, the security deposit paid, interest paid to CRA on re-assessment, payments made on promissory notes, and professional accounting or legal fees incurred.
8. If the settlement is approved, will I have to pay legal fees/costs?
The Court will approve a payment of legal fees/costs to class counsel out of the overall settlement fund. You will not be responsible for further fees and costs.
9. Will I have to pay back the promissory notes I signed?
The Court will grant a declaration that the promissory notes are void and unenforceable, and no further payment will be required to be made by any Class Members under the promissory notes.
10. What is the timing of settlement? When will I receive money?
Class counsel and the administrator hope that the settlement can be fully administered with all money being paid out in the first half of 2012.
11. I participated in the Banyan Tree Foundation Gift Program for the 2002 taxation year. Am I included in the settlement?
2002 donors are not included in the class proceeding or the settlement. The class proceeding and the Class as certified includes only individuals who participated from 2003 to 2007.
12. What if I opted-out?
All those who opted-out will be given an opportunity to opt back in and participate in the settlement if the Court approves it. This will be addressed at the Court approval hearing.
Canada Revenue Agency (“CRA”) Issues
13. How will CRA treat the settlement payment I receive?
The settlement payment is a compromise of all monetary damages you may have suffered, including but not limited to: the cash donation paid, the security deposit paid, interest paid to CRA on re-assessment, payments made on promissory notes, and professional accounting or legal fees incurred. It is unknown how CRA will treat the settlement payment.
We are not tax advisors and are not in a position to provide an opinion on this issue. Class Members should obtain their own individual tax and/or accounting advice on this issue.
14. How will the settlement affect the fight with Canada Revenue Agency?
A declaration from the Ontario Superior Court of Justice that the promissory notes are void and unenforceable might impact the fight with Canada Revenue Agency. Canada Revenue Agency has always maintained that the loans were not bona fide loans, i.e. in other words, that the Class Members were not liable to repay the loans.
If the Ontario Superior Court of Justice, as part of settlement, makes a declaration that the promissory notes are void and unenforceable, that declaration will support the argument of Canada Revenue Agency that the Banyan Tree Foundation Gift Program is not valid, in particular because Class Members are not at risk to repay the loans.
Again, we are not in a position to provide an opinion on this issue. Individual tax and/or accounting advice should be obtained by Class Members.
15. How do I get more information?
More information is available by reading all of the updates and documentation posted here.
A copy of the Settlement Agreement and Distribution Plan will be posted here before the settlement approval hearing date.
16. What if I didn’t accept the CRA’s prior offer and the time to accept has expired?
You can and should request that CRA extend the time for you to accept the earlier settlement offer. CRA may or may not do so. That is up to CRA. We suggest that you contact CRA as soon as possible.
HISTORICAL CONDUCT OF THE PROCEEDING
The Monitor - UPDATED JANUARY 9, 2012
The Monitor, Grant Thornton Limited, the Court-appointed Interim Monitor of Rochester Financial Limited, Banyan Tree Foundation, Promittere Asset Management Ltd. and Promittere Capital Group Inc. (“Gift Program Defendants”), is not presently in control of assets of the Gift Program Defendants and has been requested to cease all activities as set out in its mandate pursuant to the Order of the Ontario Superior Court of Justice. The parties and the Monitor will jointly apply to the Court for an Order discharging the Monitor in due course.
Gift Program Defendants
As a result of court order, the Statement of Defence of the Gift Program Defendants has been struck.
Documentary Discovery
We are now at the discovery stage of the proceeding, which involves exchange of documents and conduct of examinations for discovery.
Class members are not subject to examination for discovery. The defendants are entitled to conduct examination for discovery of the representative plaintiffs, Rick and Kathryn Robinson.
We are conducting examinations for discovery of representatives of the defendants.
Further updates as to the progress of the action will follow in due course.
Certification of action as class proceeding
The Court Order certifying this case as a class proceeding required the defendants to send out a Court-approved notice under the Class Proceedings Act. The Banyan Tree Foundation sent-out the Court-approved notice but did so with its own letter dated May 25, 2010.
The Banyan Tree Foundation letter was NOT approved by the court and should not have been sent-out to Class Members.
The Superior Court of Justice approved a clarification notice to be sent-out to all Class Members indicating that they should not rely on the Banyan Tree Foundation letter as it is inaccurate and misleading.
Click Here to Read the Clarification Notice
Persons who opted-out of the class proceeding have an opportunity to change their mind and revoke their decision to opt-out.
Click Here to Read the follow-up Notice to Opt-Outs
If you opted-out because of the Banyan Tree Foundation letter dated May 25, 2010, you have an opportunity to change your mind and revoke your decision to opt-out by signing a revocation of opt-out form which must be completed and filed with the Opt-Out Administrator on or before October 1, 2010.
Click Here to Read the Revocation of Opt-Out Form
Motion for Leave to Appeal to the Divisional Court
The motion of all defendants seeking leave to appeal to the Divisional Court from the Order of the Honourable Madam Justice Lax dated January 19, 2010, certifying this action as a class proceeding, was dismissed by the Honourable Mr. Justice Dambrot of the Divisional Court on April 1, 2010.
This action can now move forward as a class proceeding pursuant to the Order of the Honourable Madam Justice Lax, January 19, 2010.
Court Orders/Reasons
Click Here to Read Decision of Lax, J., dated January 19, 2010
Click Here to Read the Order re certification of Lax, J., dated January 19, 2010
Click Here to Read the Order re dismissal of GPD motion of Lax, J., dated January 19, 2010
Click Here to Read the Order re dismissal of FMC motion of Lax, J., dated January 19, 2010
Click Here to Read the Order re non-dissipationof assets, etc., of Strathy, J., dated February 3, 2010
Click Here to Read the Decision re denial of leave to appeal of Dambrot, J., dated April 1, 2010
Click Here to Read the Order re denial of leave to appeal of Dambrot, J., dated April 1, 2010
Click Here to Read the Order re disclosure of class member database listing, of Strathy, J., dated May 12, 2010
Click Here to Read the Order re notice of certification clarification, of Strathy, J., dated June 25, 2010
Click Here to Read the Endorsement re adjournment of misc. motions of Strathy, J., dated August 17, 2010
Click Here to Read the Order re appointment of Monitor of Strathy, J., dated September 10, 2010
Click Here to Read the Endorsement re adjournment of misc. motions of Strathy, J., dated September 17, 2010
Click Here to Read the Order re declaring opt-outs invalid of Strathy, J., dated September 17, 2010
Click Here to Read the Order re striking counterclaim of Rochester of Strathy, J., dated September 17, 2010
Click Here to Read Frequently Asked Questions
Certification of Action
This action was certified as a class proceeding by the Honourable Madam Justice Lax pursuant to reasons for decision issued January 19, 2010.
Click Here to Read Notice of Certification
Click Here to Read Opt-Out Form
The plaintiffs' motion seeking certification of this action as a class proceeding was argued in Toronto June 23, 24 and 25, 2009.
At that time, the Gift Program Defendants sought an order staying the action.
Fraser Milner Casgrain LLP sought an order dismissing the plaintiffs' action.
Subject to any rights of appeal, the action will now move forward as a class proceeding.
Further updates will be posted here shortly.
Overview of Claim
A Statement of Claim was issued in the Ontario Superior Court of Justice in Toronto on February 27, 2008 claiming damages for breach of contract and negligence relating to the Banyan Tree Foundation Gift Program.
The action is brought under the Class Proceedings Act, 1992 on behalf of the class of persons who participated in the Banyan Tree Gift Program for the taxation years 2003 - 2007.
The Statement of Claim, which contains allegations which have yet to be proven in Court, alleges that Promittere Capital Group Inc., Promittere Asset Management Ltd. and Banyan Tree Foundation, with the assistance of Rochester Financial Limited, developed, promoted, sold and administered a gift program under which participants borrowed money to make charitable donations in order to receive charitable donation receipts and concomitant tax credits.
Participants borrowed substantially all of the funds donated and actually paid in cash only a small portion of the total donation amounts.
Law firm Fraser Milner Casgrain LLP is also named in the lawsuit as it is alleged that it issued favourable tax opinion letters which were a necessary pre-requisite to the promotion of the gift program to participants.
We are compiling a database of individuals who participated in the Banyan Tree Foundation Gift Program for the taxation years 2003 - 2007.
If you have not already contacted us, we would appreciate hearing from you as it may assist us in pursuing this claim.
You may contact us by e-mail, telephone, mail, courier, fax, etc.
CERTIFICATION DOCUMENTS
Click Here to Read Motion Record re certificaiton
Click Here to Read Supplementary Motion Record
Click Here to Read Affidavit of Margaret Sanderson
STAY MOTION OF GIFT PROGRAM DEFENDANTS
Click Here to Read Motion Record re stay of action
DOCUMENTS
Click Here to Read Statement of Claim
Click Here to Read Press Release
NEWS ARTICLES
Click Here to Read The Spectator Article - December 2, 2011
Click Here to Read The Spectator Article - July 14, 2008
Click Here to Read Law Time Article - March 9, 2009
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