Alberta, West Edmonton Mall settle litigation
Last Updated: Friday, December 20, 2002 | 4:11 PM ET
CBC News
The secret deal settles litigation arising from a $420 million loan guarantee given by Alberta Treasury Branches, the bank, to the mall, owned by Edmonton's Ghermezian family.
The circumstances of the loan guarantee, which saved the financially-strapped mall in the mid-1990s and allowed it to tear up a deal with a lender from Eastern Canada, led to allegations of political interference by Premier Ralph Klein and other members of his government.
The bank sued four Ghermezian brothers, one of its own former senior executives and others in 1998, alleging the loan guarantee was obtained by bribes and the terms were "contrary to all prudent lending principles and practice, wholly and utterly devoid of any valid commercial purpose or justification."
The Ghermezians and the executive, Elmer Leahy, denied the allegations and counter-sued. Leahy said Klein told him to approve the loan.
- FROM JAN. 20, 1999: West Edmonton Mall saga leads to lawsuits
- FROM AUG. 28, 1998: Police probe West Edmonton Mall scandal
The settlement came just a month after the Ghermezians failed in their final attempt to legally block the use of certain evidence by the bank.
"A negotiated solution of this matter is in the best interest of ATB and its depositors," executive Bob Normand said in a statement.
Although the details weren't disclosed, the bank said the financial impact will be reflected in its financial reports.
