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Lawyer exodus shutters Desjardins 35 Lawyers Join Rival Lavery Firm; Quebec's Spun Off Jim Middlemiss, Financial Post Published: Saturday, August 18, 2007 An era will end for the 100-lawyer law firm Desjardins Ducharme LLP in September. The once-esteemed law firm will close after more than 50 years in business. Thirty-five of its key Montreal business lawyers will leave the firm to join rival Lavery, de Billy LLP at the end of next month. Concurrently, the Quebec City office of Desjardins, which comprises 50 lawyers and merged into the firm in 1992, has spun out and will operate under its old name Stein Monast LLP. [/url] Another seven litigators from the Montreal office will join litigation specialist Donati Maisonneuve LLP. The final eight lawyers will either retire or have said they are moving to other firms or into corporations. "We have accounted for everyone," said Gerard Coulombe, chairman of Desjardins, who explained that "Quebec City couldn't join the Lavery deal because it would have created too big a firm[for that region.]" Jean Brunet, managing partner of the Quebec City office, agreed: "You can't have a law firm of 100 lawyers in the area. "We're putting down the principles of how it will work in Quebec City," he said of the new firm, adding that he does not rule out opening a smaller Montreal office. The addition of 35 lawyers to Lavery creates a 180-lawyer firm, making it the largest independent provincial firm. The split is no surprise and has been rumoured for weeks once Desjardins started bleeding lawyers to other firms. "We took a good hard look at the various practices and groups lawyers," said Richard Dolan, managing partner at Lavery, said. "We settled on some very strong, solid business lawyers and bankruptcy and insolvency lawyers who had complementary practices to our practice mix. This is a really exciting business opportunity for us." Lavery has always had strong business in insurance, said Mr. Dolan, "The lawyers are going to bring additional bench strength to our corporate merger and acquisitions practice and the insolvency group." Of late it has been a tough go for some independent law firms, squeezed by the creation of large national firms, especially in Montreal, where several Toronto-based firms have opened offices or merged with local firms. In the spring, Goodman and Carr LLP, a 90-lawyer Toronto firm, said it was dissolving its practice. Kip Cobbett, a lawyer with Stikeman Elliott LLP in Montreal, said it is "very sad" to see Desjardins' demise. "It was a wonderful firm. It will certainly change the landscape." The agreement is subject to a vote by the Lavery partners expected later this month. [email protected]
Reclusive billionaire Robert Miller built a business empire far from the public eye. Now, a bitter divorce has thrown his legacy into question. By Joe Castaldo From Canadian Business magazine, September 27, 2010 http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20100927_10022_10022&page=1 To say Robert Miller is a reluctant interview is a grand understatement. He has avoided attention his entire career, and there are no doubt countless activities he would much rather be doing right now than standing in his opulent office with a reporter. He has previously given a single media interview since co-founding Future Electronics Inc., a multinational distributor of electronic components based in Pointe-Claire, Que., that generates nearly $4 billion in revenue each year. Miller is the sole owner. He has never authorized a picture of himself to be published, and his name is rarely, if ever, attached to his extensive charity work. Miller does not do public appearances. He will never be seen at a ribbon-cutting ceremony or posing with an oversized novelty cheque. His desire for privacy has been his most identifiable trait — aside from his wealth. This magazine estimated his net worth last year at $1.19 billion. Forbes magazine valued him at US$2.5 billion. In the absence of any visible public image, the one surrounding Miller is that of an eccentric billionaire recluse. But now he has welcomed a reporter into his office, extending a large hand and wearing a warm smile. He is a tall, lanky man with a slightly stooped posture, sporting a pair of chunky black orthopedic shoes and rimless glasses. At 65, his hair is tinged with grey. He says he would like to write a book about Future Electronics some day. "It's an amazing story," he says in a gravelly baritone. "It could fill 600, 700 pages." The meeting comes at a time when the comfortable, profitable obscurity in which both Miller and his company have operated is threatened. He is in the midst of a long-running and acrimonious divorce proceeding with his ex-wife, Margaret Antonier, which has thrown this most private of men and his business empire into an unflattering spotlight. The pair was married for nearly 38 years before Miller filed for divorce in 2005. Assets likely totalling hundreds of millions of dollars, if not billions, are at stake, but the exact details of the proceedings are sealed in a Montreal court. The legal battles do not end there. In June, Miller filed lawsuits in Florida and Montreal against Antonier and the real estate development company they co-own, Miromar Development Inc. He is alleging Antonier and another executive are shutting him out of the company, and have even siphoned money from the firm. Antonier's lawyers, meanwhile, have accused Miller of "horrendous personal behaviour," the specifics of which are outlined in a filing Miller's lawyers have requested the court keep sealed. A Florida newspaper picked up on the case, followed by the Journal de Montreal, which splashed a picture of Miller across its front page, the first photo of him ever published. What it all means for the business empire he built remains to be seen. For Miller himself, it means reluctantly inching from the shadows to take hold of his public image. But that image is anything but simple. Current and former employees — even competitors — describe him as a genius and a visionary. Everything about him, from the way that he operates his company and interacts with employees to the many varied causes he supports (cryogenics research, for one) contribute to the image of a tycoon unlike any other. The more he reveals, the question "Who is Robert Miller?" becomes all the more difficult to answer. The basic biographic details are simple enough: Miller was born in 1945 and raised in Montreal, and later studied at what was then called the Rider Business College in New Jersey. He worked as a radio disc jockey in New Jersey in the 1960s, where his music program, The Bob Miller Show, aired three hours a day during the week and six hours on Sundays. He moved back to Montreal and joined a small wholesaler called Specialty Electronics. Owner Ben Manis, an acquaintance, hired him. Miller threw himself into the job and became close with Manis's son, Eli, who also worked at Specialty. But the younger Manis eventually had a disagreement with his father and left the company. Miller suggested he and Eli go into business for themselves. In 1968, they started Future Electronics out of a small rented office in Montreal. They essentially acted as middlemen, buying obscure electronic parts from component manufacturers and selling them to makers of finished products, ranging from consumer goods to industrial equipment. Manis says he came up with the name. "I just sort of said, let's forget the past. Look to the future," he says. The company grew steadily, and Miller proved to be a workaholic. To Manis, who didn't share his partner's devotion, it wasn't evident Miller had any outside interests. "Something came into his head, and he said, 'What do I need him for?'" Manis recalls. In 1976, Miller bought his partner's half of the company for $500,000. Future operated differently nearly from the start. Distributors in this industry are essentially stores for electronic components, but typically try to limit their inventory, reducing costs and risks. Component prices are volatile, and no one wants to sell product at a loss. Instead, Miller bought large quantities of components when they were cheap. He then charged a significant markup selling to equipment manufacturers when demand hit. Put crudely, Miller made his name as a speculator in electronic parts, and he's an exceptionally gifted one. One former vice-president who asked to remain anonymous recalls only one slip-up in his 15 years at the company, and there were consequences. "Some people were demoted," he says. Miller is often credited with having an intuitive sense of the market, but his moves are based on excellent intelligence. He got to know many of the executives at component makers in part to find out where manufacturing would be constrained. "Just through networking, he got a feel for what commodities would be hot," says the former VP. Holding inventory has another major advantage. "We became known for being the one place you could go to and always find product," says Gregg Smith, another former vice-president, adding that was how Future won new customers. The model works because Future is privately held. Building out the infrastructure to hold loads of inventory is expensive and tough to justify to shareholders. So too are speculative bets. But as the sole proprietor, Miller is accountable only to himself. Today, the product marketing department, mostly housed at headquarters, is the heart of the company. The department buys from suppliers and sets resale prices for Future branches across the world. Competitors assign product marketers to work with specific suppliers, but Miller turns the model on its head. His employees focus exclusively on a component group, becoming experts able to see trends in the market for specific parts. The job is demanding. "The phone is ringing non-stop," recalls a former employee. "It would be usual to have three or four lines on hold while taking another call and trying to close a deal." The pace takes its toll on some. One former employee recalls developing migraines, another, stomach pains. (Future has a medical clinic on-site). Lindsay Blackett worked at Future for six years in sales and marketing, and is now Alberta's culture minister. "Politics, people think it's hardball. But it's nothing compared to Future," he says. In the 1990s, when Blackett worked at Future, Miller would call up individual workers on the floor to inquire about particular deals. "That could be very intimidating, or very rewarding," he says. "He knew what everyone was doing in that building." Competition thrives at Future, which not everyone can handle. "Robert Miller sat on a cloud like Zeus and said, 'Go at it, boys,'" recalls the former VP. "He saw that through confrontation, people would excel." Those who do perform rise quickly through the ranks, and salespeople can make hefty commissions. More than 10 years ago, Future bought massive amounts of tantalum capacitors, used in mobile devices, before the wireless boom hit. When it did, supply was scarce — except at Future. The company sold millions of them a month with a markup as high as 2,000%. Gross profits were so large that for a couple of years, Miller held monthly meetings with sales staff in the auditorium. He handed out their commission cheques individually, from smallest to biggest, announcing the sum for all to hear. The largest topped six figures. Those at the bottom were driven, not only by the desire for bigger commissions but out of embarrassment, to make more and bigger sales. Employees who have little interaction with Miller tend to regard him with a mixture of apprehension and awe. Spotting their boss loping through the hallways is akin to a celebrity sighting. Usually the only opportunities for many to lay eyes on their leader are the addresses he gives roughly once a quarter. He'll often speak for well over an hour, sometimes two. "I always say the intellectual property for Future Electronics is Robert's brain," says Lindsley Ruth, a corporate vice-president. Even employees many years removed from the company still respectfully refer to him as Mr. Miller. Those who work more closely with Miller say he offers plenty of encouragement and room to be entrepreneurial. A few years ago, Jamie Singerman, currently a corporate vice-president at the company, was rolling out a new division called Future Lighting Solutions, which is focused on the LED market. Future didn't have expertise in that area, and building it up required lots of investment. "I went in with a presentation," Singerman recalls. Miller didn't look at it and instead asked if it was the right thing to do. "I said yes, and he said, 'Done.'" Miller is sometimes unpredictable, however. A few years ago, some of the product specialists in Montreal were told not to come in for a month to allow their managers to fill in and become more knowledgeable about the parts the company was dealing with. A former product specialist says many of his colleagues felt they would no longer be needed, and started looking for other jobs. The managers, meanwhile, were overworked and started polishing up their resumés, too. "If the exercise was a natural culling exercise," says the former employee, "it worked." The first time people outside the industry heard of Future Electronics or Robert Miller came on May 7, 1999, when some 30 RCMP officers, in the presence of an FBI agent, raided corporate headquarters. They toted away dozens of boxes of material for reasons officials would not disclose. The company's lawyers successfully fought in court to keep investigators from looking at the seized material, arguing the search was unjust. After six months of media lawyers wrangling in court, the search warrant detailing the reason for the raid was unsealed by the Supreme Court of Canada. The U.S. Department of Justice alleged Future was defrauding a handful of U.S.-based suppliers out of approximately US$100 million a year. The company was accused of maintaining two sets of accounting records — one real, one false — and only Miller and select executives, dubbed the A-Team, had access. The false records were allegedly used to take advantage of debits and rebate programs from suppliers so that Future could pad its margins. Miller never spoke to the press, but Future issued statements denying any wrongdoing and calling the allegations "absurd." There were also whispers the whole investigation was sparked by disgruntled ex-employees, and based on a misunderstanding of how the distribution business worked. More than a year later, Future's lawyers succeeded in quashing the search warrant that justified the raid, and the seized material was returned without having been examined. Nearly three years after the initial search, the U.S. Department of Justice dropped its investigation entirely. Neither that investigation nor anything else has kept Miller from expanding his company to become the fourth-largest electronics distributor in the world. Future Lighting Solutions is booming, scaling up from virtually nothing in 2004 to nearly $350 million in revenue today. The division, which doesn't simply distribute parts but works with customers to meet specific lighting needs, could some day rival the size of the components business. The company is also re-launching a division called Future Active Industrial that focuses on the countless smaller customers generally ignored by larger distributors. The beneficiaries of Future's success spill far beyond the company's headquarters. Miller committed years ago to giving away more than half his earnings to charity. Much of it goes to employees and their families. Miller receives many letters from employees seeking help, often for medical issues. Gina Galardo joined Future 17 years ago as an administrative assistant, but over the years, fielding these requests eventually took over her job. Lori-Ann MacDonald was brought on six years ago to assist. In an interview in a Future boardroom, they explain that when a letter comes in, they conduct research to find the best doctors or specialists, book appointments, provide moral support or anything else that needs doing. Miller has a deep interest in medical research with extensive connections in the community, and can usually immediately recommend a doctor or clinic. He has paid for expensive medical procedures for countless employees, and finds time for hospital visits and phone calls. "Should we get the binders?" MacDonald asks. She makes a phone call, and two other assistants enter, each with two five-inch-thick binders in their arms. The binders are brimming with letters and thank-you cards from employees, organized alphabetically by name. Galardo and MacDonald are soon lost recounting the stories on each page. There is even a section on Ben Manis, the man who hired Miller at Specialty Electronics back in 1967. Manis is in his mid-90s today. Miller employed him at Future for a time and set him up with an apartment across from headquarters. He now supports Manis's accommodations in a seniors' residence, and has allotted money for his funeral. The two have lunch plans for Manis's 100th birthday, however. "I think this sums up Mr. Miller," Galardo says, turning the page. The allegations being made in a Florida civil court against Miller by his ex-wife stand in stark contrast to the benevolent man who never says no to a worthy cause. Miller married Margaret Antonier in 1967. They had two sons, and Antonier remained an active businesswoman. She originally worked in radio advertising, and in 1988, Miromar Development Inc. was formed and received financing from Future Electronics. Miller and Antonier each own 50% of the real estate firm, and Antonier serves as chief executive officer. "I have learned the business from the ground up," Antonier wrote in response to e-mailed questions. "I am pretty hard on myself when it comes to succeeding." Miromar built Canada's first outlet mall, in Montreal, and in the mid-1990s, began developing properties in Lee County, Fla., including an 1,800-acre residential resort with a private beach and golf course. Employed at Miromar was Robert Roop, who had worked at Future for 20 years prior. He served as the company's chief financial officer at the time he resigned and moved to Florida to work at Miromar with Antonier. The lawsuit against the firm states Antonier and Roop became "romantically involved," but does not specify when. In 2005, for reasons that remain under seal in a Montreal court, Miller filed for divorce. Antonier's lawyers in Florida say she filed a demand in the divorce proceeding for Miller's stake in Miromar, a company "she created and operated for decades," be transferred to her and that loans owed to Future Electronics by Miromar be forgiven. Miller sought a valuation of Miromar's assets, and in 2008, he filed a lawsuit in Florida to get access to its corporate records that he was allegedly being denied. The case plodded on until February, when Miller voluntarily dismissed it. But in June, Miller filed new lawsuits in Florida and Montreal, including a declaration from Frank Holder, a senior manager at a forensic consulting firm hired to probe Miromar. Holder concluded Antonier and Roop are violating Miller's rights as a shareholder and director in Miromar by excluding him from the company, and refuse to provide full access to corporate documents. He also claims to have discovered Antonier and Roop engaging in "various acts of misconduct, including theft and diversion of corporate funds." Miller is seeking for a receiver to be put in place. Lawyers for Antonier in Florida refute all of the charges and dismiss Holder's account as baseless, arguing criteria for installing a receiver have not been met. They also contend the suit is designed to delay the divorce proceedings, alleging "wrongful acts" on Miller's part and arguing he has a "desperate desire to avoid the consequences of the Canadian divorce proceedings." That case is sealed, and it is unknown what either party is seeking in those proceedings. None of the allegations in the Miromar litigation have been proven in court, and neither side will comment on the cases. But the disputes and the resulting publicity cut very close to the bone for Miller. Not even during the three-year-long ordeal with U.S. authorities did he speak with reporters. But after researching Future Electronics for weeks, this magazine received a call from the company's general counsel with an almost unprecedented invitation: Miller was willing to sit down and talk. Miller is reticent to say too much about himself or the company. He wants to save the best material for the book. But he has agreed to an interview, provided it is not recorded. Similarly, he would not pose for a photograph. He certainly is not afraid of the camera, however. Hanging on the wall opposite his desk are two huge portraits, one of Miller solo in a suit, another of him shaking hands with Quebec Premier Jean Charest. His aversion to published photographs, he explains, stems from his desire for security for himself and his sons. Miller speaks slowly, but has an intense manner. He leans forward when talking, his bushy eyebrows shooting up when he wants to emphasize point, and rarely breaks eye contact. He has a habit of saying whatever pops into his head. While making a point tangentially related to health, he offers that "I have colonoscopies with startling regularity." He also has a knack for numbers. He can remember exactly when Eli Manis phoned him to say he had quit Specialty Electronics: Nov. 20, 1968, at 4:45 p.m. The phone number at Future Electronics' first office? 418-7701. The number of stairs leading up to that office? Thirty-two. He politely deflects most personal questions. He is more comfortable expounding on Future's unique operating model — based on inventory and market research, rather than pipelining product. "It's so basic that it amazes me that our competitors don't recognize the benefit of having inventory," he says. "Inventory drives sales." He attributes much of the company's success to its privately held status. As a sole proprietorship, it can move much more quickly than its competitors. The fact that Miller doesn't have to answer to shareholders or a board of directors also allows Future to offer the longest customer payment terms in the industry, up to 180 days. "Our competitors can't compete with us. They would be clobbered if they did that," he says. The possibility of taking Future public has never seriously crossed his mind. Miller says he had no business mentors. "It all came to me. It's a gift. I just knew what to do," he says. A strange, metaphysical thread runs through some of his other explanations for his success. Take his work ethic. There was a time he worked 765 days in a row, without a day off, and rarely left the office before 11 p.m. He accounts for this drive by telling a story of walking the streets of Montreal once as a teenager and seeing a red Thunderbird convertible. He knew he had to have one some day. "I recall talking to myself. I said, 'Boy, you're really special.' I think that was a real turning point." He pauses. "But I had just been swimming, and I later read swimming releases endorphins. It's a natural high." He reached another turning point in the early-1970s, when his motivation shifted from material wealth to something larger. When one of his acquaintances passed away, Miller was one of only three people to attend his funeral. "I didn't want that to be me," he says. Charity took on a greater importance from that moment. In fact, growing Future's profits in order to have more money to give away is his primary motivation. "I believe you give till it hurts," he says. Talking about specific causes would take hours, he adds, but he does tell a story of a former employee diagnosed with cancer. Miller sent her to a specialist and ultimately paid hundreds of thousands of dollars for her treatment. "Your encouragement ... for treatment gave me the last three years of my life," she wrote to Miller in a letter delivered after her death in 1995. Nearly all of his charity work has been done anonymously. "I'm not seeking attention," he says. The one area to which Miller's name has been attached is cryogenics research. The Alcor Life Extension Foundation in Arizona has even described Future Electronics as its greatest benefactor. "These people are doing so much," he says. "They're pure, pure people." There have long been rumours Miller will have himself cryo-preserved when he dies. "I'll leave it to my sons to decide," he says. He is in good health today, though. In fact, he recommends the line of "life extension" vitamins marketed by the foundation. "They're the finest vitamins known to man," he boasts. "You should take them." After talking for a couple of hours, Miller signals an end to the interview. It's 10:30 p.m., and he's been awake since five in the morning. He walks to the door, again proffering his hand and a smile. There are still many unanswered questions: the backstory to all of the legal proceedings, what he has in store for Future, and whether his new-found openness will last. But he's closed the door. We'll have to wait for the book.
(Courtesy of The Globe and Mail)
Canadian Commercial Paper Plan Likely to Be Approved By Joe Schneider June 3 (Bloomberg) -- A Canadian judge will probably approve a plan to convert C$32 billion ($31.8 billion) of frozen commercial paper to new notes by the end of the week, though court appeals may keep investors waiting months to get their money back. ``I will have a decision with reasons by Friday,'' Ontario Superior Court Judge Colin Campbell said at the end of a hearing in Toronto today. ``I'll approve,'' unless there's something in his notes that convinces him to change his mind, the judge said. Lawyers representing some of the noteholders have already indicated they plan to appeal Campbell's ruling once it comes out. Some investors object to the plan's limitations on lawsuits targeted at the banks and brokers that sold the paper, which hasn't traded since August. James Woods, who represents 18 companies that want to sue including pharmacy chain Jean Coutu Group Inc., said if the judge rules as he indicated, his group will likely file to the Court of Appeal. ``If we find fraud against banks that are not ABCP dealers, there is no recourse,'' Woods said, urging the judge to reject the proposal at today's hearing. ``It's inconceivable.'' New notes may be issued as early as the end of June if there are no appeals, said Purdy Crawford, a lawyer who led a group of foreign and Canadian banks and pension funds that drafted the proposal. All appeals must be exhausted before the notes are issued, he said. Quick Appeal ``We can't close until we get the sanction,'' Crawford told reporters. ``I am assured by our lawyers that the Court of Appeal will agree to an expedited hearing.'' The insolvent asset-backed paper hasn't traded since August, when investors shunned the debt on concerns about links to high-risk mortgage loans in the U.S. A group of foreign banks as well as Canadian lenders and pension funds led by Caisse de Depot et Placement du Quebec negotiated the so-called Montreal Proposal in August. The plan would convert the insolvent 30- to 90-day debt into new notes maturing within nine years. Banks agreed to provide funding to back the new notes on the condition that they be given immunity from any lawsuits stemming from the sale of the notes. Campbell said in a May 16 ruling he wasn't satisfied protection from lawsuits over potentially criminal conduct such as fraud was fair, and he delayed approval. The banks agreed to change the plan to allow limited suits under certain conditions within nine weeks following the plan's approval. Possible Fraud Campbell criticized the lawyers opposing the plan for failing to provide examples of potential outstanding fraud. ``So we defeat the plan on the off chance that there is something out there?'' Campbell asked. Once the new notes are issued, investors can hold them to maturity or try to trade them in the secondary market. Some clients of Canaccord Capital Inc. will be paid in full for their debt, under an agreement announced by the Vancouver-based brokerage in April. The case is Between the Investors Represented on the Pan- Canadian Investors Committee for Third-Party Structured Asset- Backed Commercial Paper and Metcalfe & Mansfield Alternative Investments II Corp., 08-CL-7740, Ontario Superior Court of Justice (Toronto). To contact the reporters on this story: Joe Schneider in Toronto at [email protected] http://www.bloomberg.com/index.html?Intro=intro3