News Article: Eugene Melnyk lawsuits:too many to count...

[GCK]

Melnyck is flying on private planes for business unrelated to hockey and paid for by the paying fans of the Ottawa Senators - there can be no bigger insult to this fan base.

Anyone who wonders why we are trying to freeze him out, send them this article. The man has no dignity.

Why do you make me seem to defend Melnyk. You misrepresented the article specifically about Sens fans supplementing Melnyk’s personal flights.
From the article
“His use of the private jet for personal reasons unrelated to Senators’ hockey, for which he later reimbursed the company, ”

 

[JD1]

I am guessing Eugene charges the Sens millions a year in consulting services. And more millions in Management fees.

I'm guessing he doesn't. I can't see how he benefits from doing that although it is admittedly legal

 

[Tuna99]

The article states Melnyk reimbursed the sens for personal flights.

Overall, the article paints a scummy picture, but using sens money for personal use isn't really the issue here.

It is part of the issue, he got caught because he was sued, he’s using team finances for unofficial NHL business - that’s illegal.

it’s just scummy all around, he’s incapable of behaving morally

 

[Tuna99]

Why do you make me seem to defend Melnyk. You misrepresented the article specifically about Sens fans supplementing Melnyk’s personal flights.
From the article
“His use of the private jet for personal reasons unrelated to Senators’ hockey, for which he later reimbursed the company, ”

you don’t seem to be defending Melnyck at all, I was adding the part where he got caught using the team plane for personal use as a caveat to his character as a business owner and to hilite the fact that fans don’t want to support a wealthy man who doesn’t treat people fairly or play but the rules, which I’m guessing you agree with

 

[GCK]

you don’t seem to be defending Melnyck at all, I was adding the part where he got caught using the team plane for personal use as a caveat to his character as a business owner and to hilite the fact that fans don’t want to support a wealthy man who doesn’t treat people fairly or play but the rules, which I’m guessing you agree with

I do agree he is a slimy piece of excrement. He just treats people so poorly.

 

[Tuna99]

This feels like the whole gig economy debate. Are you an employee of uber or can they treat you as a contractor to get out of all sorts of employee protections?

I imagine the case fleshed out in detail the reasons why she was under the law considered an employee of cse but we don't get that detail in the article.

That said, what entity is required to pay her, be it CSE, Melnyk personally, or some other arm of Melnyk's empire is probably not the point. The lady should be paid what she is owed. Whatever contract she signed likely spelled out who was hiring her, and all the other terms of compensation.

just another stain in the team name and an owner who doesn’t seem to care that his business practice drags the NHL logo into areas of the newspaper it doesn’t want to be seen - the unethical business practice section

 

[Micklebot]

It is part of the issue, he got caught because he was sued, he’s using team finances for unofficial NHL business - that’s illegal.

it’s just scummy all around, he’s incapable of behaving morally

It doesn't say that, you are jumping to an unfounded conclusion.

 

[Dingle]

I'm guessing he doesn't. I can't see how he benefits from doing that although it is admittedly legal

Read up on Eugene and his Pharmacy days. There is a reason he is in the Barbados. Tax laws are different. It is why, he and Biovale, partnered up with other companies. And why he got mad. Some used him just to get the Barbados hook.

Money in Canada is taxed and taxed heavily. In Barbados, there are all sorts of loopholes and "stuff". He charges millions, the Sens lose more, so their tax burden becomes negligible. His revenue in Barbados, goes untouched.

He would not be the first to do this. You have noticed that a pretty good chunk of people having Monaco as their residence, etc.

Your jaw may drop if you worked in the Sens accounting department.

 

[AchtzehnBaby]

Still ridiculous.

I am figuring most of you have never owned business or had non-staff contractors hired.

If this was your money, pretty sure most would be doing the same thing.

This is a pure and simple case of someone going after the big corporation thinking that it's easy pickings and EM being a stubborn business owner wasting money in lawyers fees to stick it to the pilot who wanted out of contract money. We have seen this before in the last to cases.

Those who are playing the "it's melnyk being melnyk" --> yup, he is being stubborn and not giving out his money for nothing.

Morgan wants$12,273.75 for unpaid wages, vacation pay and severance. Doesn't sound normal to me to spend $50k + for lawyer fees and then appeal and then increase it to over $100k

 

[JD1]

you don’t seem to be defending Melnyck at all, I was adding the part where he got caught using the team plane for personal use as a caveat to his character as a business owner and to hilite the fact that fans don’t want to support a wealthy man who doesn’t treat people fairly or play but the rules, which I’m guessing you agree with

The team doesn't own a plane

 

[Micklebot]

Still ridiculous.

I am figuring most of you have never owned business or had non-staff contractors hired.

If this was your money, pretty sure most would be doing the same thing.

This is a pure and simple case of someone going after the big corporation thinking that it's easy pickings and EM being a stubborn business owner wasting money in lawyers fees to stick it to the pilot who wanted out of contract money. We have seen this before in the last to cases.

Those who are playing the "it's melnyk being melnyk" --> yup, he is being stubborn and not giving out his money for nothing.

Morgan wants$12,273.75 for unpaid wages, vacation pay and severance. Doesn't sound normal to me to spend $50k + for lawyer fees and then appeal and then increase it to over $100k

If it were as simple as you suggest, there would be no need to appeal as the verdict would have gone the other way. Clearly there are some contentious issues at the heart of the dispute, first of which appears to be if she is in fact a non staff contractor. These types of tribunals determine contractor vs employee statue fairly frequently and typically do a good job.

If CSE owns or leases the jet and any other tools required to do the job, and not the pilot, that suggests employee of CSE.

If CSE controls the employee schedule, in this case via Melnyk who is the head of CSE, that suggests a possible employee relationship.

If CSE assumes the financial risks associated with the work, that suggests an employee relationship. Hourly or annual salary wages vice flat rate per flight suggests an employee relationship.

Obviously there is more to it but its certainly not cut and dry.

 

[JD1]

Read up on Eugene and his Pharmacy days. There is a reason he is in the Barbados. Tax laws are different. It is why, he and Biovale, partnered up with other companies. And why he got mad. Some used him just to get the Barbados hook.

Money in Canada is taxed and taxed heavily. In Barbados, there are all sorts of loopholes and "stuff". He charges millions, the Sens lose more, so their tax burden becomes negligible. His revenue in Barbados, goes untouched.

He would not be the first to do this. You have noticed that a pretty good chunk of people having Monaco as their residence, etc.

Your jaw may drop if you worked in the Sens accounting department.

I'm quite familiar with his biovail days and Barbados's status as a tax haven

I'm also pretty familiar with the concept of moving money around between related companies and mgmt fees

I understand the nature of your speculation but i just don't find what you are saying to be reasonable for a variety of reasons.

First among those reasons is that given Melnyk's high profile issues in the past with security regulators and his known profile as a guy that set up shop in Barbados for tax purposes and the general high profile of hockey, he is someone that would undergo more regular scrutiny with the CRA

Secondly if there is an iota of truth to the sell rumours, deliberately weakening is most valuable asset is an unlikely path

Here's a good article that explains the pitfalls of what you are suggesting he is doing. Note the emphasis on reasonable

Important Considerations When Paying Management Fees

 

[Rand0m]

Still ridiculous.

I am figuring most of you have never owned business or had non-staff contractors hired.

If this was your money, pretty sure most would be doing the same thing.

This is a pure and simple case of someone going after the big corporation thinking that it's easy pickings and EM being a stubborn business owner wasting money in lawyers fees to stick it to the pilot who wanted out of contract money. We have seen this before in the last to cases.

Those who are playing the "it's melnyk being melnyk" --> yup, he is being stubborn and not giving out his money for nothing.

Morgan wants$12,273.75 for unpaid wages, vacation pay and severance. Doesn't sound normal to me to spend $50k + for lawyer fees and then appeal and then increase it to over $100k

Did you miss the title of the article? The labour board sided with the pilot. None of use have seen the contract signed by the pilot but the labour board did and sided with the pilot and in this case determining CS&E were responsible. Melnyk doesn't think laws should apply to him, we've seen this multiple times already, there's no excuse wasting money on lawyers when the amount in question is so minimal. Why is he fighting this other than him being a horrible human being and he probably feels slighted that this pilot quit. She was probably one of the most affordable pilots.

 

[AchtzehnBaby]

Did you miss the title of the article? The labour board sided with the pilot. None of use have seen the contract signed by the pilot but the labour board did and sided with the pilot and in this case determining CS&E were responsible. Melnyk doesn't think laws should apply to him, we've seen this multiple times already, there's no excuse wasting money on lawyers when the amount in question is so minimal. Why is he fighting this other than him being a horrible human being and he probably feels slighted that this pilot quit. She was probably one of the most affordable pilots.

LOL. Stop with the FUD

He is appealing it.

 

[supsens]

I don't get this at all.

How can Capital Sports be on the hook for the contract pilot's vacation pay if they are not an employee of Capital Sports? Pretty sure that's why the final pay was never agreed upon when CSE got the invoice. I would fight it too. On principle.

Morgan testified that she tendered her resignation because the job required her to work nearly 19 days per month on average, compared with the 12 days per month she had expected to put in. Melnyk paid her a salary of $130,000 per year.

I wish i could only work 12 days per month.

It seems like she used the jet for flight training hours, commercial license ? Then ran off the second she got her hours in? Or something like this.
So I would imagine that is why they got upset..

 

[Micklebot]

It seems like she used the jet for flight training hours, commercial license ? Then ran off the second she got her hours in? Or something like this.
So I would imagine that is why they got upset..

They had a 6 month min employment req because the employer was covering some training costs (my assumption is there is some specific training for the jet they leased that they covered but I'd have to check with one of the pilots i know to see if that's a reasonable assumption).

Once she hit the 6 months she was free to go and if they thought 6 months wasn't enough time to get value on the cost of training they should have made that clause have a longer period before it was covered.

 

[supsens]

They had a 6 month min employment req because the employer was covering some training costs (my assumption is there is some specific training for the jet they leased that they covered but I'd have to check with one of the pilots i know to see if that's a reasonable assumption).

Once she hit the 6 months she was free to go and if they thought 6 months was enough time to get value on the cost of training they should have made that clause have a longer period before it was covered.

Yes they should have but they are still humans and would be pissed if they let her train with the plane and kept her on the payroll until she was fully certified then she quit the first paycheck after she was allowed to. I mean they should and did pay her(lol) kinda.
But if that is the beef....I can’t blame them

12 days a month for 130g a year? Lol I should been a private jet pilot.

 

[Dingle]

I'm quite familiar with his biovail days and Barbados's status as a tax haven

I'm also pretty familiar with the concept of moving money around between related companies and mgmt fees

I understand the nature of your speculation but i just don't find what you are saying to be reasonable for a variety of reasons.

First among those reasons is that given Melnyk's high profile issues in the past with security regulators and his known profile as a guy that set up shop in Barbados for tax purposes and the general high profile of hockey, he is someone that would undergo more regular scrutiny with the CRA

Secondly if there is an iota of truth to the sell rumours, deliberately weakening is most valuable asset is an unlikely path

Here's a good article that explains the pitfalls of what you are suggesting he is doing. Note the emphasis on reasonable

Important Considerations When Paying Management Fees

Yes, I did and BDO is wonderful. But this relates to a business where players can earn up to 10 million a year, where coaches can make 5-6 million and GM can make up to 2 million plus.

As a result, for Eugene to declare himself as a Manager, and as a consultant. To draw yearly fees of ~ 10 million, would still be in keeping with remuneration consistent with the industry as a whole.

Meaning if you own a "subway" restaurant and it generates 1/2 million a year in revenue, and your employees are all making 25 K/year. You cannot make yourself a manager and a consultant and charge $200 K. You are perfectly okay doing so and charging 70 K. And if you are real clever and own 2 Subways, you load your fees onto the one making more, to minimize its tax burden.

Eugene can easily pull 10 Million a year, and not the CRA or anyone else would touch him. And I am certain, that that is in line with other owners of other sports. And all big business. It is the means by which money moves.

If Eugene is not doing this..then he needs new advisers.

To all Ottawa fans, the team is 165 million and counting in debt. Do you see him worried? If he has been pulling ~ 10 million a year. He has owned the team 17 years. That is a cool 170 million.

Who the bleep cares what he sells at, he has probably made back much of his money.

I will repeat, if he is not charging a cool 10 million a year, he needs new advisers.

 

[Micklebot]

Yes they should have but they are still humans and would be pissed if they let her train with the plane and kept her on the payroll until she was fully certified then she quit the first paycheck after she was allowed to. I mean they should and did pay her(lol) kinda.
But if that is the beef....I can’t blame them

Honestly, if she was able to command a 130k salary, i don't think this is a case of milking them for training and flight hours. She was likely fairly experienced already at that wage. I imagine she was fully certified before acting in the capacity of the job, they just covered some pre employment training but i could certainly be wrong.

 

[AchtzehnBaby]

Yes, I did and BDO is wonderful. But this relates to a business where players can earn up to 10 million a year, where coaches can make 5-6 million and GM can make up to 2 million plus.

As a result, for Eugene to declare himself as a Manager, and as a consultant. To draw yearly fees of ~ 10 million, would still be in keeping with remuneration consistent with the industry as a whole.

Meaning if you own a "subway" restaurant and it generates 1/2 million a year in revenue, and your employees are all making 25 K/year. You cannot make yourself a manager and a consultant and charge $200 K. You are perfectly okay doing so and charging 70 K. And if you are real clever and own 2 Subways, you load your fees onto the one making more, to minimize its tax burden.

Eugene can easily pull 10 Million a year, and not the CRA or anyone else would touch him. And I am certain, that that is in line with other owners of other sports. And all big business. It is the means by which money moves.

If Eugene is not doing this..then he needs new advisers.

To all Ottawa fans, the team is 165 million and counting in debt. Do you see him worried? If he has been pulling ~ 10 million a year. He has owned the team 17 years. That is a cool 170 million.

Who the bleep cares what he sells at, he has probably made back much of his money.

I will repeat, if he is not charging a cool 10 million a year, he needs new advisers.

I am ready to advise at $1.5m

Call me on my mobile Eugene.

 

[Zorf]

It is part of the issue, he got caught because he was sued, he’s using team finances for unofficial NHL business - that’s illegal.

it’s just scummy all around, he’s incapable of behaving morally

Why is this illegal?

I'm not trying to be difficult. I'm curious as to why.

 

[Calvin123]

Why is this illegal?

I'm not trying to be difficult. I'm curious as to why.

It's not. As a private owner he can move money in and out of the company at will, and can use company resources for his own use, as long as it's done in a transparent manner. (Basically it has to be done in a way that lets CRA get their cut of the benefit he get's of using the company resources).

This is completely separate from the Pilot's claim, which sounds like an employee vs independent contractor issue, which comes up regularly in business. The labour board would rule on these on a pretty regular basis. What's unusual from my experience is for the company to appeal the decision over such are relatively small amount.

 

[Bileur]

I’m surprised some posters still go out on a limb and go through the mental arithmetic required to defend all of these Melnyk moves. Give the spin a break, let the courts settle it and revisit when we have a ruling.

 

[YouGotAStuGoing]

You know, it's possible for this to be a shady and uncool business practice without it being the end of the world. How it's somehow been spun into a total non-issue AND a criminal offence the likes of which we've never seen says far more about Melnyk's polarizing nature than it does about the actual merits of this case.

 

[supsens]

I’m surprised some posters still go out on a limb and go through the mental arithmetic required to defend all of these Melnyk moves. Give the spin a break, let the courts settle it and revisit when we have a ruling.

I don’t see anyone defending it, I see people speculating on why they are spending the time and money on this.
My next guess is the lawyer is EM’s buddy and the team is paying all these fees just to plum up his bank account. Somewhat similar to the scumbags running the USA.