North Battleford man loses legal challenge over stake in Keeley Lake Lodge

Court documents from the Superior Court of New Jersey and the Saskatchewan Court of Appeal show the Niessners hired Lunemann to work for them in Canada, but learned after a decade that he was not eligible under Canadian law.

They also learned that a majority shareholder of a company could be exempt from work permit rules, so they signed a share purchase agreement with Lunemann giving him 60 of 100 Class A shares in the lodge in exchange for $60,000. The money was secured by a promissory note payable on demand.

The agreement was backdated to 1990 so immigration authorities would believe Lunemann had been a majority owner since he started working there. No money was paid to the Niessners. Instead, court documents say they created false credit memos showing Lunemann had paid for the shares over time using sweat equity.

In 2012, the Niessners and Lunemann had a falling out over the business’s cash flow and bank accounts. Charles Niessner’s health was also failing, and the couple later sued Lunemann in the Superior Court of New Jersey for the money owed under the share purchase agreement.

They asked for the share certificates back along with damages, alleging Lunemann had breached the sales agreement and misappropriated money.

Lunemann did not have the money to defend himself, so he obtained financing from Cimmer, who knew the lodge and had previously expressed interest in buying a stake in it.

The deal involved Cimmer loaning Lunemann money for a legal retainer. In return, Cimmer received a security interest in Lunemann’s shares, which was registered in Saskatchewan, and an option agreement giving Cimmer 10 years to buy Lunemann’s shares

Amid other legal wrangling, the Niessners and Lunemann settled their dispute in 2016. The agreement allowed the lodge to buy half of Lunemann’s shares and required him to cancel his deal with Cimmer and pay money owing.

However, the settlement was never finalized because Cimmer exercised his option to buy the shares. Lunemann then ignored the settlement he had just agreed to and transferred the shares to Cimmer. Cimmer was aware of the settlement at the time.

In 2022, the Niessners sued Cimmer in New Jersey and won.

The American judge found Cimmer liable for interfering with the settlement. As a remedy, Cimmer was declared to have no right or title in the shares, was barred from interfering in lodge operations or presenting himself as an owner, was ordered to unfreeze all of the lodge’s bank accounts, and was ordered to pay US$20,000 in punitive damages and the Niessners’ legal fees.

Cimmer and Lunemann were held liable for US$576,000 in compensation, with Cimmer allocated 75 per cent of that amount.

Cimmer appealed in New Jersey and lost. The Niessners and the lodge then applied to have the order registered in Saskatchewan.

Cimmer appealed that registration decision as well and has now lost at the Court of Appeal. All three appellate judges agreed, and one set of costs was awarded to the Niessners and the lodge.

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panews@pattisonmedia.com

by MeadowlakeNOW staff

North Battleford man loses legal challenge over stake in Keeley Lake Lodge

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