NWT Supreme Court Judge Karan Shaner has found "overwhelming evidence" that Ron Barlas "knowingly breached his fiduciary duties" as the boss of several Lutsel K'e Dene First Nation (LKDFN) companies, harming the First Nation's members and "gaining significant financial benefit for himself and his family" in the process.
Barlas served in leadership roles with LKDFN's Denesoline Corporation as well as the Tsa and TaSA国际影视传媒檈gera companies SA国际影视传媒� all three of which aim to produce profits for the First Nation.
In April 2023, the First Nation and its chief, James Marlowe, accused Barlas of misappropriating roughly $14 million during his time with the companies, later making more specific accusations that he used company money to buy everything from real estate to jewelry to tuition to plastic surgery for himself and his family.
Legal proceedings began in earnest earlier this year, when LKDFN's attorneys filed a 200-page document outlining their case against Barlas, as well as his wife, Zeba Barlas.
They asserted that Barlas and his wife engaged in "four broad categories of wrongdoing," which amounted to oppressive conduct. Those categories were as follows:
-He engaged in multiple self-dealing and undisclosed transactions that led to significant profits for corporate entities owned by Zeba Barlas and later, the Barlas Family Trust, over which Ron Barlas exercised practical control. The profits were used for the benefit of Ron Barlas and his family.
-He controlled his own compensation as chief executive officer and director of Denesoline Corporation and TaSA国际影视传媒檈gera and overcompensated himself through an oppressive employment agreement.
-Throughout his tenure, Ron Barlas took steps to erode governance of the LKDFN companies, which led to less oversight by the board and members, which allowed Barlas to conceal his self-dealing transactions from scrutiny.
-He used corporate resources of the LKDFN companies for his own benefit. This included paying friends inappropriate remuneration and having employees engage in work for his personal benefit.
The First Nation's lawyers also alleged that Zeba Barlas "knowingly participated in and benefited from" her husband's activity.
Marlowe and LKDFN demanded several remedies in response to Barlas's alleged wrongdoing.
On July 30, following months of complex legal proceedings, Shaner agreed to most of those proposed remedies. The judge ruled that all contracts and transactions involving Barlas should be set aside, that Barlas should be permanently removed from his positions with all LKDFN affiliated entities and that a trust should be imposed to hold three properties Barlas purchased using misappropriated funds.
The judge also called for a trial to quantify the financial losses of the LKDFN companies at the hands of Barlas.
"Determining the extent of the losses will, doubtless, require the assistance of forensic accounting and other experts beyond the scope of this application," the judge wrote, explaining the decision to bring the case to trial.
It is not yet clear when the trial will occur.
