Nr. 34
August 23, 2020
Open letter to President, Estonian House Ltd. Re: Sale of 958 Broadview Ave. – Estonian House in Toronto (Estonian Life, in the interest of its readers and concerns in the community, is publishing the following open letter. We do not accept responsibility for any inaccuracies or false claims in the letter. If corrections are sent, we will be glad to publish them.) Without the benefit of a response to my previous enqui ries as to whether you intended to proceed as outlined in your Estonian Centre Update #41, I must conclude that you are con vinced that the sale of 958 Broadview Ave will be subject to capital gains tax unless you take steps to mitigate the tax consequences. You have good reason to be apprehensive. Estonian House obtained its not-for-profit status based on letters patent which were submitted on Jan 9, 1952. Its focus was 1. to promote the educational, benevolent, fraternal, charitable, social, cultural, and recreational interests of persons of Estonian Origin living in Toronto and to assist such persons to assimilate the Canadian way of life. 2. To own real estate and to operate thereon an institution similar to a club, the facilities which shall be available to all persons of Estonian origin whether they be shareholders of the company. Times have changed. Over
EESTI ELU reedel, 28. augustil 2020 — Friday, August 28, 2020
the years “Estonian House Ltd.” is no longer a “social club” but has become a property manager for 958 Broadview. Ave. Of the total revenue reported by EHL of $436,341 only $61.995 was rentals to Estonians or 14 %. You are primarily renting to commercial enterprises or the community at large. Your focus over the last five years has been to “unlock the value of your real estate” to the neglect of promoting the social values of the “club” which led to its designation as a not for profit organization. You have recognized this. Estonian House Ltd will transi tion to the Estonian Inter national Centre. This is a sub sidiary of Estonian House Ltd, but it has been designated as a for profit organization to be ad ministered under the Ontario Business Corporations Act. The organization chart for the Madison Project shows Toomas Koger C.A. as respon sible for financial oversight. On April 25/ 2019 he made known his view that Estonian House Ltd is “not a non-profit. Never was. Taxes were filed for 60 years as being a for profit company.” As your financial authority he has stated that “no one can take a chance that the CRA would not try to tax the pending capital gain.” I understand fully your de sire to avoid this situation. But surely you recognize that once you close purchase and sale agreement based on the ap proach you have outlined in the Estonian Centre Update #41, you are acknowledging with ab solute certainty that you believe that you are not a “not for
profit” organization. This presents you with a problem. If you are not a “not for profit” what are you? The only alternative is that you are a “for profit organization”. You have already defined the organi zation that will manage the new Estonian International Centre as a “for profit organization”. The business plan for this organiza tion is identical to the current business plan of Estonian House Ltd. The primary func tion of both is to manage the real estate. ….. no change. …. So, both in terms of what you believe and have corro borated by your actions, and in how the organization in fact operates you are a “for profit organization” There are some benefits to operating as a “for profit orga nization” The rules under the Business Corporations Act anticipate the many issues that confront a business enterprise and set out the rules for resolving them. You have one such situation facing you now. It has created a great deal of friction within our community. It is easily resolved if you refer to the Business Corporations Act Paragraph 184. (3) A sale lease or exchange of all or a substantially all the property of a corporation other than in the ordinary course of business of the corporation requires the approval of the shareholders in accordance with subsection (4) to (8) RSO 1990. (4) The notice of the meeting to approve a transaction re ferred to in subsection (3) shall be sent to all shareholders and shall include or be accompanied by:
On the Market: Nobe’s three wheelin’ electric cars Vincent Teetsov Walking around in the city, or going from place to place on the highway, you move at a steady pace with your eyes fixed on the horizon and the road in front of you. A swathe of utilitarian monochromatic and teal metal boxes flow beside you. Steadily, steadily. You drift into a hypnotic moving state... Until some thing bright zips by in your peripheral vision. Heads turn. Among pedestrians, cameras will come out. It’s like a spark that has alerted everyone in an instant. Such is the electricity of a meticulously designed vehicle. When function is idolized over style, our means of transporta tion can get a little bit boring. A quirky car brings out the ideals of adventure and excitement. When it’s a glistening scarlet red car with three wheels and an emission-free engine going past you, then you know it’s about time to act on those ideals. Nobe is an Estonian com pany, born and raised. The word “Nobe” in Estonian could refer to something that is agile and nimble. It can saunter down
cobblestone streets, glide along a coastal highway or careen through a few inches of fresh snow in the countryside. It’s true. Nobe has videos with its cars being tested on all kind of surfaces, including LaitseRally Park in Harjumaa, and other snow-covered roads in Estonia. The company’s logo is a woman with her pony tail blus tering in the wind. A silver or nament of this logo festoons the hood of each Nobe car. It’s not the three pointed star of a Mercedes, or a leaping jaguar. It’s more like a vision of what any driver would look like while driving with the windows open or convertible top retracted. Three seats, for you and two friends. You, someone special, and your luggage in the back. Or just you, with even more stuff packed in. The frame is light, so none of that should be a problem when it comes to maneuvering swiftly on the road. At the same time, the cars’ materials are designed to be recyclable. Their cars are inspired by the Benz Patent-Motorwagen from 1885, but have received the contemporary treatment. Fu turistic driving shapes up to be something fun. The contours
are bold and perplexing: look ing at it for the first time, the back appears to be bent in a high speed photographic illu sion. The interiors are straight forward. Available colours in clude red and black, with blue arriving soon. Still, as with any novelty car we see on the road, we are left to wonder how practical and safe it is. What are the technical specifications? According to Nobe, the car’s battery takes two hours to charge. With a range of 210 kilometres, you could take a Nobe 100 and just about drive from downtown Toronto to the shores of Lake Simcoe in Innisfil, and then back, on one fully charged battery. It’s output is 54 kW. With the Nobe 100 GT, a higher battery output (72 kW) model on offer from Nobe, that all-electric range is in creased to 260 kilometres. Want to take it on the high way? This speedy machine can accelerate to 100 kilometres per hour in 5.9 seconds, with a maximum speed of 130 km/h. One point in particular that arises when talking about ve hicles with three wheels is whether or not it’s stable. Lateral stability is compromised
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i) A copy or summary of the agreement of sale, lease, or exchange and ii) A statement that a dissenting shareholder is entitled to be paid fair value for the shares in accordance with section 185, but failure to make that state ment does not invalidate the Approval of the sale lease or exchange referred to in section (3) (7) The approval of the sale, lease, or exchange referred to in section (3) is effective when the shareholders have approved the sale, lease, or exchange by special resolution of the holders of shares in each class or series entitled to vote thereon. When the action approved by the resolution becomes effec tive, the dissenting shareholder is to be paid by the corporation the fair value of the share held by the shareholder. The act specifies procedures to be followed by both the dissenting shareholders and the corporation which need to be communicated to the dissenting shareholders. These procedures are spelled out in detail in the act along with the process to arrive at fair value and how to resolve dis putes between the dissenting shareholder and the corporation. Conclusion: We have a process to miti gate the tax consequences of capital gain on the sale of 958 Broadview Ave. We should do no less with respect to mitigating the legal consequences of not dealing with dissenting shareholders. If Estonian house Ltd. loses it’s not for profit status, then it is subject to the Business Corporations Act.
Just like we concluded that “no one can take a chance that CRA will not try to tax the pending gain” We cannot take a chance that we are retroactively considered to be a “for profit” organization that should have followed the Business Corporations Act. When will a special meeting of shareholders be called at which time you can present your rationale for accepting the offer of Purchase and Sale from DK Acquisitions and call for a resolution to approve the agree ment?
for road vehicles of all kinds when making turns, as the centre of gravity shifts out from under the body of the vehicle to the sides where the tires are. Usually, a tilt or slide feature would be engaged to prevent the vehicle tipping over. In the case of Nobe, stability is accounted for by placing two of the three wheels at the front rather than at the back, and locating the battery low down to the ground, along with the triangular chassis of the car. Nobe has vouched for their cars’ safety in other ways, too. The physical strength of the tri angle as a shape, and their Delta Frame protective cage, is said to protect passengers in the event of a collision. The re generative anti-lock braking system (ABS) would tempo rarily store the vehicle’s kinetic energy, to maintain traction and avoid skidding out of control if the driver suddenly breaks. While the price of electric
cars is still too prohibitive to make it as commonly used as vehicles powered by fossil fuels, more and more styles and de signs from different companies indicate a serious change of direction for car manufacturing on the whole. Society has been ready for sustainable transporta tion for a long time, and more companies should pay attention to that demand. Nobe began accepting preorders for the Nobe 100 model back in the autumn of 2019, through an Indiegogo crowd funding campaign launched by CEO Roman Muljar. Though their original funding goal was not achieved, things are still on track for a 2021 delivery on those initial orders, and their exuberant design and branding are revving up the anticipation all over the world for what will be many people’s very first electric car. ...Oh, and by the way, it has a built-in espresso machine.
VAINO EINOLA, Shareholder Representing 34 shares of Estonian House Ltd.
••• The Estonian Centre Project Update #41 outlined both the proposed governance structure for The International Estonian Centre as well as “what will happen when the Estonian House sale to Revera closes” “Just prior to the closing of the sale of 958 Broadview to Revera, EH will transfer the beneficial ownership of the property to FIEC so that the proceeds from the Broadview sale will accrue to FIEC. FIEC will issue a charitable donation tax receipt to EH which in turn mitigates capital gains tax consequences for EH. FIEC will pass those funds to IEC pur suant to the terms of the trust. FIEC will be the beneficial owner of 9 Madison and the improvements made on it and will also hold beneficial interest in 11 Madison, with IEC holding legal title, in trust for FIEC. (9 Madison and 11 Madison will be merged into one parcel of real estate onto which the Centre will be built.)”.
Photo: still from Nobe’s video “MyNobeCar”
