An Alberta court has certified a class action brought by investors against several firms and individuals over a real estate limited partnership investment.
Earlier this month, the Court of Queen’s Bench of Alberta approved a proposed class action against various firms and people involved with the Glenmore Investment, a Calgary-based commercial real estate investment scheme, alleging that they “knowingly created a structure which was designed to defraud the plaintiffs”.
The decision states that the investors are claiming that the defendants diverted investor funds for their own benefit, overpaid for real estate, were negligent in their management, and that they made misrepresentations in their offering memoranda, among other things.
The allegations have not been proven. The court has approved that the case proceed as a class action, noting that the plaintiffs’ claim does disclose a cause of action, there are common issues, and there is an identifiable class of investors.
“Given the claims advanced by the plaintiffs I am convinced that a class action is the appropriate procedure to achieve judicial economy, efficiency and access to justice,” it says, in certifying the case as a class action against various firms.
A number of the defendants in the newly certified class action also face allegations from the Alberta Securities Commission (ASC). Among other things, it is alleging that, between August 2005 and July 2010, the respondents engaged in illegal trades and distributions of securities to investors; that they perpetrated a fraud on investors; and, that certain offering memoranda and promotional materials were misleading.
Those allegations have not been proven either. A hearing into the regulator’s charges is scheduled to begin in November.