Toronto Court Approves Mobilicity’s $1.2 Billion Lawsuit

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Last September, several investors behind Mobilicity sued Industry Canada for $1.2 billion. The investors claimed that they had incurred damages over the struggling wireless startup.

Today, a Toronto court has ruled that the lawsuit launched against Industry Canada by Mobilicity’s original investors can proceed. The lawsuit claims that the government offered certain assurances in return for their investment. With this offer investors would be able to sell one of their carriers after five years if necessary.

Mobilicity first launched a cellular business after purchasing spectrum licenses in 2008. The Canadian carrier has ultimately failed financially since then and the government has blocked its attempt to sell to Telus on several occasions.

Lawyers for the Attorney General of Canada motioned to dismiss the case on the grounds that the claims and losses alleged belong directly to Mobilicity. Ontario Superior Court of Justice judge Frank Newbould heard the motion on Wednesday and issued a ruling on Friday. Newbould said:

“In my view the claims of the plaintiffs as pleaded are not derivative claims. They are claims for civil wrongs done to them and not to Mobilicity and the damages claimed can be asserted by them in this action.”

Back in December, Telus lost a lawsuit that they launched against the federal government in 2013. The carrier complained about the shift in Ottawa’s policies on wireless spectrum transfer.

Federal Court Justice Roger Hughes ruled that there was no evidence that Telus suffered any loss as a result of its claim to have relied on the government’s earlier spectrum policy. The earlier policy stated that after the five-year period expired anyone could freely acquire the spectrum.

[via The Globe and Mail]

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