IAT Air Cargo Facilities Income Fund (TSX:ACF) has filed a B.C. Supreme Court petition against financial adviser BMO Nesbitt Burns Inc. claiming it mistakenly paid a $700,000 completion fee.
IAT maintains that the fee was supposed to have been paid only if an investor acquired just over 50% of the fund's units. However, this past summer FrontFour Holdings Inc. acquired just 44.5% of IAT. When BMO sent an invoice, IAT mistakenly paid it.
According to court documents, the terms of the agreement called for BMO to receive the $700,000 fee "in the case of a transaction resulting in the acquisition of more than 50.001% of the units or assets of the fund."
BMO is alleged to have sent an invoice for $741,773 on August 15 for the completion fee and $41,773 in taxes and expenses. IAT paid the fee on August 29, but didn't ask for its money back until October 22.
According to a letter from IAT's lawyer that was included in the suit, the only payable owed to BMO was a $200,000 engagement fee.