Input Capital, a publicly traded company based in Regina, says it is investigating after its $97.5-million proposed sale to smooth-talking American businessman Eric Blue collapsed two months ago.
On Aug. 12, 2020, Input, a company that loans money to farmers in exchange for some of their future canola crop, announced that Bridgeway National Corp. was making a cash purchase of all Input shares.
The deal with Bridgeway, a Washington, D.C.-based firm owned by Blue, fell apart on Oct. 29 without much explanation.
A CBC News investigation reveals there were plenty of warning signs that experts say should have caught Input’s attention.
They certainly caught the attention of Julian Klymochko, a Calgary-based merger and acquisitions specialist and CEO of Accelerate Financial Technologies, who offered a blunt assessment on Twitter the day after the deal was announced:
“More red flags than a bullfighting convention.”
If you engage in merger arbitrage, listen to me when I tell you to stay away from this Input Capital $INP.to / Bridgeway National deal
More red flags than a bullfighting convention ????https://t.co/JdbLcAm25G
Documents readily accessible online reveal Blue is embroiled in multimillion-dollar disputes stemming from failed deals involving companies from Massachusetts to Wisconsin to Louisiana. He’s tangled in disputes involving entities as diverse as the Joy detergent brand and the Tom and Gayle Benson Foundation, run by the family that owns the NFL’s New Orleans Saints and the NBA’s Pelicans.
In court, plaintiffs have alleged Blue made fraudulent commitments and supported them with forged documents.
Court documents also show Blue is facing bankruptcy, with 25 creditors — including individuals, corporations, banks and the U.S. Internal Revenue Service — looking to collect millions.
Who is Eric Blue?
Clarence Roby Jr, a New Orleans-based lawyer, said Blue’s deal with Input was backed by a phoney financial commitment letter.
He said he knows this because Blue used the identity of Roby’s client, New Orleans-based investment adviser Octave Francis III, without his knowledge or consent, to persuade Input.
Roby said Blue, who represents himself as a lawyer and an investment specialist, comes off as “some hotshot whiz-kid, young investor type” who is “crafty enough to talk his way into a lot of prominent places,” just like the Leonardo DiCaprio character in the movie Catch Me if You Can.
“For whatever reason, Mr. Blue probably felt he could use Mr. Francis’s good name and reputation for whatever his fraudulent, corrupt schemes may have been,” said Roby.
In mid-November, the day after CBC News first reached out to Input CEO Doug Emsley for an…
Read More: How a ‘hotshot whiz-kid’ ensnared a Sask. company in a $97.5M deal riddled