Appeal court rejects Rudolph

Yukon businessman Jon Rudolph's claim that he owes himself millions of dollars has been rejected, again.

Yukon businessman Jon Rudolph’s claim that he owes himself millions of dollars has been rejected, again.

The Court of Appeal last week upheld a Yukon Supreme Court decision that found Rudolph has no legal right to pay himself before he pays back over $4 million in outstanding debts.

Rudolph bought the Ross placer mine on Dominion Creek, 80 kilometres southeast of Dawson City, in 2005. It formed part of the construction and mining empire that Rudolph had cobbled together over two decades.

But when his creditors came knocking, the empire began to crumble.

In 2010, Rudolph struck a deal to pay back one cent on the dollar each year for five years on $12 million dollars of debt.

But not all of his debts were settled.

Mackenzie Petroleums and Norman Ross, the placer mine’s founder, filed a claim against Rudolph for a combined total of over $4 million.

Rudolph originally bought the mine from Ross using a company called the Golden Hill Ventures Limited Partnership. It is this entity that holds the debt to Norman Ross and to Mackenzie Petroleums.

However, Rudolph created a second company, Ross Mining Ltd., which borrowed money from Golden Hill Ventures for “working capital purposes,” according to court documents.

Rudolph argued, under the Miners Lien Act, that the debt to Ross Mining should be paid back before the other claims.

Rudolph is the “sole proprietor and controlling mind” of both companies, the Yukon Supreme Court found.

The Supreme Court decided, based on legal precedent, that an owner of a property should not be permitted to make a claim against his or her own property.

The Court of Appeal found that while this particular argument was not entirely solid, another reasoning against Rudolph’s claim is bulletproof.

The court argued that Ross Mining borrowed the money from Golden Hill Ventures, as opposed to being hired to provide services to the company, and as such is ineligible to make a claim under the Miners Lien Act.

Rudolph has a couple months to decide if he will appeal the decision in the Supreme Court of Canada.

If he does not appeal the decision, it will be the end of a very long journey for the creditors.

“We can proceed to, shall we say, have the mine sold and get our money back,” said John Weirda with Mackenzie Petroleums.

Rudolph did not respond to a request for an interview.

Contact Jacqueline Ronson at

jronson@yukon-news.com

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