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Unique Broadband sues former CEO

TORONTO — Unique Broadband Systems, Inc (TSXV:UBS) says it doesn’t owe any money to former chief executive and director Gerald McGoey, who is suing to get $8.6-million that he claims is due him under his personal services agreement.

TORONTO — Unique Broadband Systems, Inc (TSXV:UBS) says it doesn’t owe any money to former chief executive and director Gerald McGoey, who is suing to get $8.6-million that he claims is due him under his personal services agreement.

UBS, the Toronto-based majority shareholder of Look Communications Inc. (TSXV:LOK), has also filed a countersuit seeking declarations that McGoey and others failed to act honestly and in the best interests of UBS.

None of the claims by any of the parties have been tested in court.

McGoey left the company on July 5 following the election of a new board of directors at UBS. He announced the next day he would sue to recover $7.41 million in termination payments and $1.8 million of restructuring awards.

Former chief technology officer Alex Dolgonos filed similar claims totalling $7.2 million but UBS says in its statement of defence that it doesn’t owe him any money either.

UBS’s statement of defence argues that the service agreements between the two men and the former board of directors were a breach of their duties to the company.

The company’s counterclaim goes further and says that $5.65 million paid to McGoey by Look and $3.95 million paid to Dolgonos by Look should have gone to UBS, rather than to the two men.

UBS is also seeking $3 million in damages related to the former UBS board’s decision to redeem UBS’s secured convertible debentures for cash. It is also seeking $5 million in punitive damages.

“UBS regrets the actions of Messrs. McGoey and Dolgonos to seek an additional $13 million from UBS and intends to vigorously defend the claims for the UBS ’Restructuring Awards’ and ’Termination Payments,’ ” Grant McCutcheon, who replaced McGoey as CEO of UBS, said in a statement.

“We also intend to pursue claims against certain other former directors for payments and decisions which we believe were not in UBS’ or its shareholders’ best interests.”

At one time, Look Communications was one of Canada’s largest Internet service providers, but its base of dial-up customers dwindled with the advent of high-speed services from rival cable and phone companies.

In addition, Look had a regional wireless network in Quebec and Ontario that delivered television and Internet services to businesses and residences, but various attempts to make a profit with the network have failed.

UBS was also active in the wireless communication sector during the dot-com era early in this decade.

, but in recent years its main business has been its interest in Look Communications, which has been winding down its operations.

In the first nine months of the current financial year, Look generated only $434,000 of revenue, down from $10 million a year earlier. UBS generated virtually all of its revenue over the same periods through Look.