By AdvocateDaily Staff
Forty-nine tobacco growers have been granted a Mareva injunction freezing the assets of True Blend Tobacco Inc., says their lawyer James Zibarras. It’s the opening salvo in a $25-million lawsuit Zibarras filed on behalf of the farmers.
“Each of these farmers signed a binding, written contract with True Blend and its principals in early 2010, wherein they were promised $2.20 per pound for their 2010 tobacco crop. True Blend has not lived up to its side of the promise, putting the very livelihood of these farmers on the line,” alleges Zibarras, a partner at Brauti Thorning Zibarras LLP, who has launched the lawsuit.
The suit is filed against the Tillsonburg company, two of its directors, Victor Osztrovics and Brian Poreba and John and Jane Doe. The allegations in the lawsuit have not been proven in court.
The Mareva injunction prohibits True Blend from shipping the tobacco or dissipating the company’s assets without court approval, says Zibarras.
“We were forced to seek this relief when we determined that the farmers’ tobacco was being shipped by True Blend to unknown third parties, putting it beyond the farmers’ reach. With this order, True Blend is effectively prohibited from taking any further steps that would be seriously prejudicial to our clients,” says Zibarras.
Mr. Justice D.R. McDermid said, in granting the injunction, that it “appears most probably that the defendants presently are selling tobacco delivered by the plaintiffs which the plaintiffs have not been paid to third parties outside this jurisdiction. Unless this activity is stopped as soon as possible, the plaintiffs will suffer irreparable harm.”
The farmers are licensed by the Ontario Flue-Cured Tobacco Marketing Board to grow and sell tobacco in Ontario. Each entered into contracts with the defendants who are licensed as buyers. It’s alleged that while the company did make some payment, it owes the farmers collectively $12 million for the tobacco delivered to True Blend last year.
McDermid said what is of “concern to the plaintiffs is the information they have received that the tobacco they did grow and deliver to the defendants is being sold to third parties without compensation to them. Part of their claim, as outlined in the statement of claim, is for damages for tobacco they grew but failed to deliver to the defendants because of their concern for payment.”
The statement of claim says the farmers have “suffered and continue to suffer loss, damage and expense.” Zibarras says that before the suit was filed the farmers tried blocking trucks at the plant in protest, and last month a group demanded OPP investigate.
“With the order in place, we can now engage in cross-examinations to determine where the farmers’ tobacco was sent, and what happened to the $12 million in funds that True Blend was supposed to have paid pursuant to its own contracts,” says Zibarras.
A defence has not yet been filed.
James Zibarras is a partner at Brauti Thorning Zibarras and head of the firm’s civil and commercial litigation practice group. He can be reached at jzibarras@btzlaw.ca.
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