iCreate’s key shareholders slapped with VM Investments lawsuit
Published:Friday | February 9, 2024 | 12:13 AMNeville Graham - Business Reporter
The calling of margin loans associated with the execution of a mergers and acquisition strategy is at the heart of legal action by listed investment house VM Investments against digital media company iCreate.
The ‘calling’ of a loan happens when a lender demands immediate settlement of all the funds owed in a loan transaction due to non-payment or other breaches of the terms of a loan agreement.
VM Investments has gone to court to recover loans associated with the acquisition of billboard advertising company Visual Vibe.
At issue is a set of three loans for which the company has issued demand letters for loans totalling $425.5 million, plus outstanding interest of $88.84 million.
A demand letter is a specific notice issued by a lender demanding immediate payment, with a threat of more serious action.
iCreate moved to acquire Visual Vibe in September 2022. To kick off several moves, CEO Tyrone Wilson signed a $100-million convertible loan deal with the Abledon Foote-led Astronomical Holdings Limited (AHL), through subsidiary AHL (SPV) Ltd.
As at June 2023, that company is listed as the third-largest shareholder in iCreate, holding 100 million shares, or just under 10.53 per cent of the total issued shares.
Kintyre Holdings with 41.9887 per cent and eMedia Interactive Group with 10 53 per cent round out the top three shareholders of iCreate.
The three entities figure heavily in the legal action brought by VM Investments.
VM Investments filed claims on January 23, 2023, suing several companies and an individual. In claim # SU2024 CD00022, VM Investments is charging that Tyrone Wilson-affiliated Kintyre Holdings has failed to satisfy its obligations on two outstanding loans of $53.29 million and $100 million. Interest outstanding is $11.78 million and $26.51 million, respectively.
Another Tyrone Wilson-affiliated company, eMedia Interactive, is said to owe $117 million, with outstanding interest of $25.55 million. Claim # SU2024 CD00023 is seeking immediate settlement of the amounts, plus legal fees.
VM Investments is also seeking to recover $155 million, plus another $25 million in total interest.
There are three defendants in this claim: AHL (SPV) Ltd, Kevin Frith and Kintyre Holdings Ltd, under claim # SU2024 CD00024.
Documents seen by the Financial Gleaner show that Frith signed as guarantor for the loan along with AHL (SPV) and Kintyre Holdings. The guarantee was signed in December 2022, two months before the announcement of a deal, where iCreate would acquire Frith’s business, Ideas Execution.
The deal would “see iCreate owning 100 per cent of Ideas Execution and founder Kevin Frith becoming a top 10 shareholder in iCreate and a strategic investor”, Wilson was reported as saying at the time.
But by June 2023, the acquisition deal fell apart as tensions raged on social media, with Frith and Wilson at times exchanging heated words.
Still, while the acquisition deal for Ideas Execution fell apart, the signed guarantees, with the $155-million loan against the 240 million shares, was still in place.
VM Investments therefore issued a demand letter dated October 19, 2023. In it, VM Investments charged that the loan was not being serviced and that there was failure to correct certain breaches.
“(This) constitutes a default per the terms of the facility. Given previous communication of these breaches and the fact that there has been no payment or pledging of additional security to correct the breaches, we hereby request a full payout of the facility immediately,” the demand letter read.
None of the principals at VM Investments were available for comment. The company is represented by Symone Mayhew through Mayhewlaw.
Wilson declined comment on the suits, only offering that he is not surprised at the development, given Sagicor’s move to put iCreate into receivership.
His companies are being represented by Georgia Henlin, KC, of Henlin Gibson Henlin, while Frith is represented by Denise Kitson of Grant Stewart Phillips and Co.