Newton Glassman

In 2002 Glassman founded Catalyst Capital Group along with Gabriel de Alba.[7] The firm specializes in purchasing distressed assets and corporate restructurings.[7] Catalyst has been involved in deals involving Gateway Casinos, Canwest, and Mobilicity.[1] By 2014, the firm was Canada's second largest private equity firm.[1]

In 2020, Glassman had a significant win in a deal over the Hudson's Bay Company. After accumulating shares in the company and gaining a 17.5 percent stake in the company, Catalyst posted an 8.8 percent return in its investment in Hudson's Bay for its shareholders. [8]

Alternative lender Callidus Capital Corp. was founded by Sam Fleiser in 2004. In 2007, Catalyst bought a controlling share in Callidus; Catalyst owns almost 60% of Callidus and is a main source of funding for Callidus as well.[9]

In 2011, Glassman took over Callidus with the goal of making the company public and increasing its loan books. [5] In April 2014, Catalyst took Callidus public at C$14 a share.[10] By 2019, Callidus had posted 10 consecutive quarters of net losses in what was described as a company “meltdown”. [11] Analysts have said legal chill is one likely reason buyers were reluctant to come forward. [12] In October 2019, Catalyst took Callidus private at 75 cents a share, [8] [13] 95 per cent below the company’s initial offer price in 2014. [14]

During the course of his career, Glassman has been quick to sue his critics and competing firms. [13]

Glassman has filed four lawsuits against investment firm, West Face Capital. [15]

In 2014, the fallout between Catalyst Capital and West Face began when a former analyst of Catalyst's became employed by West Face. Catalyst alleged that this analyst provided West Face confidential information that allowed West Face to bid for ownership of Wind Mobile, a company that Catalyst had been interested in buying from VimpelCom Ltd. [16]

In August 2016, Judge Frank Newbould, the trial judge in the Wind Mobile lawsuit between Catalyst and West Face, ruled against Catalyst. [17] In his ruling, Newbould was critical of Catalyst witnesses and described Glassman as “aggressive, argumentative” and more of a “salesman than an objective witness”. [18]

Catalyst provincially appealed Newbould's decision and, in 2018, the Ontario Court of Appeal judge dismissed Catalyst's appeal “from the bench”, without hearing from lawyers of either West Face or Catalyst. [19] In 2019, the Supreme Court of Canada refused to hear Catalyst's federal appeal on the original decision made by Judge Newbould and ordered Catalyst to pay West Face for its legal costs. [20] Catalyst also filed a second lawsuit involving West Face in reference to the failed Wind Mobile negotiations. [20] In November 2017, in a separate lawsuit against West Face, sometimes called the “Wolfpack” suit,[21] Glassman accused West Face and other defendants in the suit, including a Wall Street Journal reporter, former Callidus borrowers, hedge funds and stock research and investment firms, of executing a “short and distort” campaign against Callidus. [5]

In 2017, it was revealed that Judge Newbould had been secretly followed, recorded and photographed by Black Cube in an attempt to frame Newbould by baiting him into making antisemitic statements.[18] Following the “elaborate sting” [22], Catalyst said that though they did not hire Black Cube directly, they acknowledged that one of their security sub-contractors had hired the firm. [23] It was also reported that even though Catalyst may have not ordered the setup of Newbould, the company still wanted to “evaluate the fruits of the sting”[18] to see if the sting showed that Newbould had bias against Catalyst. In a countersuit against Catalyst, West Face accused Catalyst of using Black Cube to not only target Newbould, but also current and past West Face employees.[23] The countersuit also accused Catalyst of hiring now-defunct Israeli private intelligence agency, Psy-Group, to execute an online defamation campaign against West Face and its CEO, Greg Boland. [24]

Under Glassman's leadership, many of Callidus' borrowers have complained of Callidus changing its loan terms just as negotiations are ending, then seeking personal guarantees from the borrower’s management. Some of the borrowers have claimed that once a loan is signed Callidus then fails to provide them sufficient financing. [5]

In 2017, U.S. district court judge wrote there was sufficient evidence to support that Callidus had engaged in fraudulent inducement in its lending $34 million to Esco Marine Inc., a Texas ship recycling company. [5] Esco's management team, and many other Callidus borrowers, have claimed that Callidus changes its loan terms in the last minute of negotiations and then fails to provide sufficient funds to keep their operations running. Esco filed for bankruptcy in 2015.

In 2014, Kevin Baumann, owner of Canadian water-well drilling firm, Alken Basin Drilling Ltd., borrowed about CA$28.5 million from Callidus. [5] According to court documents, Callidus forced Baumann and other shareholders of Alken Basin to provide personal guarantees to cover the loan. Baumann also said that Callidus “drip fed” money needed to keep Alken Basin running in what Baumann described as a “loan to own” strategy. In March 2015, Callidus demanded that Buamann and Alken shareholders re-pay their loan. The next month, Callidus replaced Baumann from Alken Basin's board with its own management team. In March 2016, Alken Basin was placed into receivership. Baumann was sued by Callidus for failure to provide the company with his personal guarantee to cover Callidus' loan to Alken Basin, with Baumann counter suing Callidus. [5]