SUE-ANN LEVY – FIRST POSTED: FRIDAY, SEPTEMBER 30, 2016 11:30 PM EDT | UPDATED: FRIDAY, SEPTEMBER 30, 016 11:38 PM EDT – Controversial restaurateur George Foulidis is under extreme financial distress, allegedly owes millions in back taxes to the federal government and has borrowed “heavily from friends, family and private lenders” to keep his businesses afloat, say divorce documents obtained from Ontario’s family court.
The details of the Foulidis’ desperate financial state come just days before city council is set to debate whether to transfer an already controversial sole-sourced lease with Tuggs Inc. — located in the eastern beaches — to Cara Foods.
The documents also make it clear that the Tuggs Inc. owner — after incurring $5-million in debt to rebuild the Boardwalk Café into Paralia restaurant and not making a go of it — decided in January of 2016 to “negotiate a part assignment of the city lease” to Cara as a way “to come out from under the debt.
“As at the present date, I am temporarily out of cash and … I and my family and businesses have borrowed heavily from friends, family members and private lenders,” he notes in an affidavit from July, adding that he’s currently living in the basement of his parents’ home.
The shocking revelations are contained in two banker boxes full of affidavits filed with family court as part of extremely acrimonious divorce proceedings between Foulidis and his wife of 20 years, Lynne Foulidis.
The documents were unsealed Friday after the Toronto Sun fought a publication ban instigated by Foulidis in early August.
The controversial 20-year lease gave Foulidis the exclusive food and beverage rights to the then Boardwalk Café, the Kew Gardens and D.D. Somerville pool concessions together with any sponsorship activity and the right to sell trinkets in Woodbine beach park, Ashbridges Bay park, Beaches park and Kew Gardens park.
It was voted on late in the evening in May 2010, passed by a narrow margin of 15-13 and cost long-time councillor Sandra Bussin her seat.
Despite the terms of the 2010 lease with Tuggs Inc. — which stipulates that “written consent” must first be obtained by the city before the lease is transferred or any renovations are done — the new Cara Foods restaurant, “Carter’s Landing,” has been operating since July 1.
The concessions Foulidis is seeking from council this coming week would effectively permit him to extend his lease of untendered public assets to large commercial interests for a profit.
Last month, the area’s councillor, Mary-Margaret McMahon, claimed she didn’t know about the change in hands until the new restaurant appeared but added it was her understanding Foulidis could let Cara operate as a third-party sublet.
A vague city report to last month’s government management committee provides no detail on how much rent Cara will pay or how the rent will be paid to the city.
However, Foulidis’ July affidavit to court suggests this will be a money-making deal for him. In it, he contends that Cara will pay rent to his holding company — Metro 1 Development Corporation Ltd. — which is 50% owned by himself and 50% by his family.
And in that July affidavit, Foulidis claims he is so “confident” the transfer will be approved, the new restaurant opened on July 1.
Foulidis says in that same affidavit that he owes more than $2-million to friends and family, including $450,000 to his parents and nearly $1.3-million to his brother — and that the only business that provides him with a “positive income” is a Tim Hortons franchise at Toronto East General Hospital.
He also concedes he took out a $500,000 line of credit (because he “exhausted the ability to borrow from friends and family”) against his matrimonial home — which is in wife Lynne’s name and valued at between $1.2 million and $1.4 million. Wife Lynne speculates in her June affidavit that the money was used to buy into that Tim Hortons franchise.
A credit check of Foulidis this past week shows he owes more than $1 million to three different lines of credit, all of which have been exhausted. It also reveals he has large sums owing on two credit cards, one of which is virtually maxed out, and pays only the required minimum each month.
In Lynne’s affidavit she also notes that her husband has been assessed by the Canada Revenue Agency as owing more than $4.9 million in back taxes for not properly reporting his income from 2009-11. But in an interim order in late July, Justice C. Horkins says Foulidis — who has spent $250,000 on a forensic accountant to fight the assessment — is reporting a debt of only $3.3 million. Foulidis disputes the CRA claim that he owes any back taxes.
Foulidis also concedes he spent $500,000 in court costs to sue the late Rob Ford for defamation — a case he lost. Some $200,000 of that represented the former mayor’s legal costs.
Reached last evening by phone, Foulidis refused to comment, accusing me of being “sneaky.” He said he’d only agree to comment if we met in person.
A snapshot of the financial woes of George Foulidis:
- Rob Marzilli (cousin’s husband): $245,000
- Sam Scarfo: $50,000
- Peter Fatsis: $71,500
- Anthony Martino: $12,325
- Peter Zivontsis: $41,804
- His parents: $450,000
- His brother: $475,000 (for the matrimonial home) and $809,000 on account of loans
- $250,000 spent for tax and accounting professionals to fight a CRA audit.
- Disputes the CRA’s claim that he owes anywhere from $3.3 million to $4.9 million in back taxes. Foulidis says he doesn’t owe any taxes.
Lines of Credit:
- Owes more than $1 million to two lines of credit
- Owes $63,000 on two credit cards (TD bank and RBC Visas)
- Matrimonial home (in Lynne’s name)
- Valued between $1.2 million and $1.4 million
- Owes $475,000 to his brother related to the original value
- His wife claims he took out a $500,000 line of credit on the home to bankroll one of his Tim Hortons franchises
Defamation suit vs. Rob Ford
- Spent $500,000 on a suit he lost
- $200,000 of that went to the late mayor’s court costs
Condo in Greece
- Valued at $260,000 20 years ago
- Now worth $80,000