TORONTO — A high-profile feud among members of the Stronach family, whose father founded Canadian auto supply giant Magna International, has been resolved out of court, ending a potentially messy legal drama.
Under a settlement announced Thursday by The Stronach Group, control of the family fortune is basically split between two factions.
Former politician and business executive Belinda Stronach will remain chairwoman and president of The Stronach Group, with full control of its horse racing, gaming, real estate and related assets.
Her Austrian-born parents, Frank and Elfriede Stronach, will assume full ownership and control of a stallion and breeding business, all farm operations in North America and all European assets.
The family fortune stems from Frank Stronach, who built the global Magna automotive manufacturing business — where Belinda worked for a time before entering federal politics.
Father and daughter issued a joint statement saying they were glad their disagreements had been settled.
"I am pleased that my father will be able to focus on an agricultural business and related projects that are his passion. The settlement will allow The Stronach Group to continue building successful companies with quality jobs that contribute to the community," Belinda said.
"I am glad that our disagreements have been resolved amongst ourselves and have utmost confidence in The Stronach Group's thoroughbred racing and gaming businesses, which will remain under Belinda's management," Frank said.
The cool but conciliatory tone stands in stark contrast to the lawsuit Frank launched in September 2018.
The auto magnate sued his daughter, two grandchildren and former business associate Alon Ossip for more than $500 million in Ontario Superior Court, alleging they mismanaged the family's assets and conspired to take control of them.
The allegations portrayed a trusting father who gave up control of family trusts in 2013 to serve in Austria's parliament, with the understanding that he was still in de facto control and could retake his position when wanted.
The suit claimed that "corporate documents were falsified as part of a scheme...to limit or eliminate Frank's role in running the Stronach family business," and that repeated breaches of trust precipitated a breakdown in the relationship between his daughter and family members.
In a statement of defence, Belinda alleged that her father lost vast sums of money on pet projects.
She countersued her father in January 2019, claiming Frank owed her $33 million from funds she gave him for his run at politics in Austria and to settle unpaid taxes in the country.
Belinda claimed in her statement of defence that she also had to intervene to stem losses from the hundreds of millions of dollars being spent on a cattle ranch, golf course, and other endeavours.
The agriculture business ran up losses of more than US$100 million, according to court filings. Expenses took flight with two steel Pegasus statues for a horse-racing course, whose initial cost was estimated at US$6 million but soared to US$55 million, the countersuit said.
"His refusal to let go of his failing business ventures has become financially disastrous," said Ossip in his statement of defence.
"Frank was, in his day, a giant of Canadian business...today, at 86 years of age, Frank's business judgment is not at all what it once was."