Tuesday, March 3rd, 2009 ::: Law: Strategic Media Suit

According to the submissions that Strategic Media made to the Ontario Superior Court on its failed motion to injunct the City, Strategic would cease to exist if it lost:

Strategic submitted these financial statements for the trial:

The statements are for the time period August 2007 - July 2008. First of all, the severed portion of the financial statements is Strategic Media’s legal expenses. Most of Strategic’s legal expenses with Cassels Brock occurred after July 2008, when Cassels Brock was working to perfect Strategic’s constitutional challenge; when it prepared and argued its motion to injunct; represented Strategic each and every time a sign prosecution went to court; and worked on two separate lawsuits against fascia permit revocations.

Nevertheless, although Strategic severed the legal expenses for the one year ending July 2008, we can tell that the legal expenses amounted to $180,017 by using simple arithmetic since Total Professional Fees amount to $223,496.32. There are two separate line items adding up to $180,017, representing two law firms, Cassels and the firm Strategic uses to write leases. One of them is clearly six figures blacked out, the other is five figures.

Let’s make this income statement easy to understand.

Income from Signs: $2,049,495

Cost of Goods Sold: -$732,376

Other Expenses Not Including Income Taxes: -$930,941

Income Before Income Taxes: $386,117

Income Taxes: -$78,945

Net Income After Tax: $307,232

Note that at this point, MLS has begun laying charges against Strategic Media as a corporation for each illegal sign installation, as well as against Strategic’s landlords, so Strategic has to send its lawyers to court to respond twice to each prosecution.

Now if you’re paying Cassels Brock $600,000 a year, which Strategic Media surely is by this point, at the very least, you’re bankrupt on that income statement. Strategic’s senior lawyers, Robert Cohen and Stan Makuch, bill $500-$700 an hour; Signe Leisk, Strategic’s junior solicitor, bills $350. The only way using Cassels Brock made sense in the first place is if you won that injunction and were able to build out the 113 locations you planned to build out. Even then, it’s a strategy that fails in a recession where standard 10′x20’s are going vacant.

If you fire Cassels Brock, your illegal signs are history and so are you, because 99% of your revenue comes from illegal signs that are almost all located in public space-friendly districts. And if you can’t sell your signs in a recession, you’re history because you don’t have the cash flow to afford Cassels Brock. MLS is even now charging you and your property owners for operating vacant signs. Pretty much all of your signs are vacant today, on March 3, 2009. And if you combine all those things, you begin to understand that, yes, you were absolutely correct when you said you will declare bankruptcy. You don’t come close to having a leg to stand on, according to your own sworn statements.  You fought the law and the law won; and now it’s time you read the writing on the wall instead of putting it there under no colour of right. The writing says:

You just can’t afford Cassels Brock anymore.

Another thing Strategic Media’s lawyers were correct about is this:

So why didn’t the court believe Strategic Media when it said it would declare bankruptcy? Because Ms Signe Leisk fucked up. Tomorrow we tell you exactly how Ms Leisk fucked up. We’ll even show you what the judge did to Strategic Media’s junior solicitor with her highlighter.