Thoughts and Opinions On Today's Important Issues

Tuesday, December 29, 2009

Chuck Mady Must Sue

Most smart business people won't do it. And Chuck Mady is smart. Yet, there are millions of dollars of legal damages at stake.

Why waste time and money tied up for years in the court system when you can be out there making money. Paying huge amounts in legal fees and depending on the whim of a particular judge on a particular day is a crap-shoot and not the way to run one's life or business. Yet, there are millions of dollars of legal damages at stake.

As the 400 Audit on the Furniture tenders also said:
  • "One of the practical issues which any bidder must consider before commencing an action for a breach of the “bidding contract” is the cost of bringing an action weighed against the potential for recovery... Pure legal costs apart, a prospective supplier to any large customer does not help its cause by suing its existing or prospective client."

Yet, there are millions of dollars of legal damages at stake.

Oh they are afraid of Chuck. As the Furniture audit said:

  • "The issue is one of risk management. The City will have to assess the likelihood that any of the bidders will take action against the City. If the assessment is that there is no serious chance of a bidder taking action (keeping in mind that only one bidder can recover substantial damages), then the report may be made public, from a purely legal perspective. If the City is concerned that one or more bidders will bring an action against the City, then the City may consider either redactions from the report or preserving the report as an in camera document."

Why else was there so little emphasis on Mady and so much on EllisDon and Vindella. Why do you think the matter was kept out of the public view until so late in 2009. The thought was that the limitation period for an action would have expired by now and preclude a lawsuit.

  • "Correspondence between the City and EllisDon demonstrates that EllisDon was aware of its legal rights. The City is fortunate not to have been sued by EllisDon when it was passed over in favour of Vindella. Such legal proceedings would have imposed significant costs on the City in terms of legal expenses and potential damage claims, not to mention the political and reputational cost to the City. Had EllisDon sued the City (before the limitations period had expired), it is possible that the three Council members on the RFP working committee, who acted without written Council authority in over-riding the staff and assisting Vindella over their objections, may have been named as individual defendants."
  • Unless there is something we do not know, any claim by EllisDon for a breach of the “bidding contract” expired six years after its recognition that it had a claim. At some point prior to October 30th, 2002 – when EllisDon wrote to the then-Mayor – it recognized it had a claim. We believe any claim which EllisDon might be able to make on this RFP is now, in all likelihood, statute barred as being beyond the limitation period.

However, every so often a man must do what a man must do: SUE. When you are screwed not once, but twice, then it become a matter of principle.

In my opinion Chuck must sue.

In my opinion, he has a strong case to make that the limitation period on his claim did not start until the report was made public. In fact, a strong argument can be made that the City deliberately held back the audit to prevent him from knowing the truth until it was too late. Only then would he know how badly he was mistreated.

Just read this from P 108:

  • There was material financial information that appears to have not been reported to Council. Further, it is unclear who in Administration had knowledge of this information. According to project documentation, given fair presentation of financial facts, Mady was the lowest priced proposal at this time. We identified an undated financial document within the Project Management files in which someone in Administration had summarized the following results:

    - “On the RFP assessment matrix, Mady scored second to EllisDon while Mady’s price was lower than all prices. Notwithstanding, Mady’s proposal was not short listed.”
    - “Vindella’s original price per sq. ft. was identified as $182.50. Mady’s was $164.00.” After adjustments: “Vindella’s overall price is $154.00 per sq. ft.” “Now Mady’s price is $157.00 per sq. ft.”
    - “Keep in mind this is for a 10 storey building. If we adjust for the difference in cost between a 4 storey [Vindella] and a 10 storey [Mady] building …makes Mady’s final price $126.00 per sq. ft.
    - Even if this adjustment were not made, Mady’s final price was $157.00 per sq. ft. with a huge score advantage in the assessment matrix over the Vindella proposal which was $154.00 per sq. ft.”
    - If Mady had the opportunity to revise his proposal to a 4 storey building, it is reasonable to assume that his price would have come in much less than the $154.00 per sq. ft. of Vindella. Mady was given no opportunity to submit an additional proposal while Vindella was given that opportunity.”

    As a result of the omission of material financial data, Vindella – not Mady – may have been selected as the winner on price and the proponent to move on in the RFP process to compete in negotiations with EllisDon."

Here though is the real reason Chuck should sue. You probably forgot this. It came from Gord:

  • "Kiss $20M goodbye

    An incensed Chuck Mady, Windsor's most prominent developer, is questioning the wisdom of doing business here following city council's rejection of a proposal he says could have saved taxpayers $20 million.

    Council, at a March 4 in-camera meeting, rejected a Mady Development Corporation offer to sell its 11-storey, 70,000-square-foot headquarters at 500 Ouellette Ave. for less than $8 million. Instead it voted 5-3 to proceed with a new $27-million social services office tower behind City Hall.

    Mady said he was floored to learn council wasn't interested in saving $20 million that could be used for roads and sewers and instead opted to get into the office development game in a city with a 21.5-per-cent office vacancy rate.

    "The thing that bothers me most is that the city is getting into the developer/landlord office building business. If they're in, I want out. Very simply, I want out because I can't compete with the public pocketbook," fumed Mady. He's building a $75-million condo tower in downtown Toronto where he says there's a refreshing, big-city attitude to development.

    "Why wouldn't you want to save $20 million? Boy. That does a lot of roads and sewers in this city," said Mady. "They should not be competing with the private sector. It just sends out a negative message and Windsor doesn't have a good reputation outside our community to begin with."

    Instead of considering the offer, council is charging ahead with plans, first approved in September, to erect a social services Taj Mahal behind City Hall with costly underground parking and Human Resources Development Canada (HRDC) as a tenant...

    David Mady, the company's Canadian president, said it's baffling that the city wouldn't investigate further a proposal to save city taxpayers "$20 million which is a good chunk of change" instead of piling up additional debt. "We just thought we had a no-brainer here."

    The younger Mady said the odd thing is that the city, which currently rents three floors of the refurbished Mady building for its social services department, poured about $2 million into renovating and upgrading its space. In addition, through the tunnel commission, it spent $3 million building an adjacent parking structure in partnership with the Mady company. It has a significant financial stake in this location. And yet it's fleeing Windsor's main street to spend big bucks enhancing its city hall square fantasies of grandeur.

    "Is this what they're supposed to be doing? Gutting the downtown core?" wondered the senior Mady...

    Twenty million dollars down the drain. Perhaps a lot more. It could only happen in a city governed by politicians who masquerade as big-shot developers with our tax dollars."

Chuck should sue since there are millions of dollars of legal damages at stake. But let us talk real life. He should sue out of principle and out of spite. It is a way to get his revenge on how he was treated in this case and on others like his garage. He will be able to have certain people under oath to make them squirm as he finds out the truth as they testify.

He deserves to learn the truth. And so do we!

If the Audit Committee will not act, then Chuck should.