The plaintiffs allege Dickinson's conduct and misrepresentations led to the firm's financial decline
Shareholders of Believeco:Partners Inc., the marketing and branding agency that Arlene Dickinson launched in 2022, have filed a lawsuit seeking $17.5 million in damages from the former Dragons' Den star, alleging she engaged in a pattern of misconduct that led to the company’s equity value evaporating in less than three years.
In their May 13th claim with the Ontario Superior Court of Justice, shareholders accused Dickinson of intentionally misrepresenting the financial health of her marketing company, Venture Communications Marketing Ltd., to facilitate its merger with other independent shops into a single public relations and marketing “super firm.”
The shareholders also alleged Dickinson provided false information to persuade them to invest in Believeco:Partners, or BCP, inappropriately kept a family member on BCP’s payroll to promote her personal brand, directed the company to pay her $165,000 credit card debt in exchange for selling the company her personal furniture, and created a hostile work environment.
“As a result of Ms. Dickinson’s conduct and Venture’s financial collapse, BCP was very quickly on life support,” the shareholders’ claim said.
“Its equity value dropped from the initial valuation of $65M on November 3, 2022 to approximately $15M today, and its share price has decreased from $1.00 per share in November 2022 to a fully diluted value of approximately $0.05 today.”
The shareholders added that their original shares represented nearly 20 percent of BCP but now represent less than three – a development “that exceeds even a worst-case investment scenario and has wiped out millions in share value.”
In a statement on Thursday, Jeremy Devereux, a partner at Norton Rose Fulbright Canada LLP who represents Dickinson, said, “Ms. Dickinson will vigorously defend against the baseless claims against her in this litigation and will continue to pursue her counterclaim for damages.
“Ms. Dickinson's reputation in this country speaks for itself.”
The plaintiffs are former shareholders of ACI Argyle Communications Inc., one of the independent public relations firms that was consolidated into BCP in 2022.
According to their claim, Dickinson and Finn Partners, Inc., a New York-based communications agency, each approached Argyle with competing offers to purchase Argyle that year. The firm ultimately accepted Dickinson’s offer to merge with Venture and other companies into BCP, based on Dickinson’s representations of Venture’s “profitability, stability, and growth” and her commitment to using her personal brand to grow the business.
The shareholders said that in the months leading up to the merger, Dickinson raised capital for BCP by persuading them to invest in the company. Each plaintiff invested between $50,000 and $65,000 into BCP by dipping into savings, spending inheritance money, and mortgaging their homes.
However, the shareholders alleged that Dickinson concealed Venture’s poor financial health. Dickinson oversaw the due diligence process for the merger and insisted it be conducted by her personal accountants. Based on financial information Dickinson provided, the accountants valued Venture at $17 million – a figure the shareholders alleged was “artificially inflated.”
This valuation effectively made Arlene Dickinson Enterprises Ltd., which is wholly owned by Dickinson, BCP’s largest shareholder. Dickinson was named BCP’s executive chair of the board of directors, as well as the company's co-managing partner and head of mergers and acquisitions.
The shareholders claimed that following the merger, Dickinson was unable to work collaboratively with two other co-managing partners, leading to their resignation within eight months of BCP’s launch. The plaintiffs also said Dickinson made decisions to “obfuscate financial information,” including refusing or failing to disclose information on BCP’s financials to senior executives and practice leaders; engaged in inappropriate spending; and sold personal furniture to BCP for $175,000. The items were later appraised for closer to $20,000.
BCP was forced to raise “rescue” capital in 2023 to avoid loan default and insolvency, and again in 2024 to avoid bankruptcy.
Simon Bieber, a partner at Adair Goldblatt Bieber LLP who represents the shareholders, told Canadian Lawyer on Thursday, "Our clients strongly believe in the allegations that they’re making."
Other pending disputes
The shareholders’ claim is the latest in a string of disputes between Dickinson and members of BCP.
Last August, BCP initiated legal proceedings against Dickinson, shortly after Dickinson announced she was leaving her executive role at the company.
In an amended statement of claim filed in March, BCP alleged Dickinson and Arlene Dickinson Enterprises misrepresented Venture’s value, causing BCP to overpay for the marketing company in 2022. Contrary to Dickinson’s claims, Venture’s finances were “significantly deteriorating in the months leading up to BCP's acquisition” and continued to decline following the merger, BCP said.
BCP accused Dickinson of failing to inform the company that the agreement for the Venture transaction had overvalued Venture, and said Arlene Dickinson Enterprises “has yet to agree to any purchase price adjustment or to participate in a process to determine the quantum of a purchase price adjustment-despite Ms. Dickinson's repeated admissions that Enterprises overstated Venture's working capital by millions of dollars.”
The company said it filed its claim to "enforce the terms of the Venture agreement and recover the damages caused by Ms. Dickinson's breaches of her fiduciary obligations and abuses of authority.”
The company noted that while Dickinson resigned from her role, it had just cause to dismiss her.
In May, Dickinson filed an amended statement of defence and counterclaim against BCP, alleging the company’s allegations “are part of a pattern of oppressive conduct that began when BCP created a toxic and intolerable work environment designed to sideline [her] from the management of BCP.”
Dickinson argued that BCP’s chief executive officer collaborated with the Canadian Business Growth Fund, a private equity firm that backed BCP, “to dilute [her] shareholder interests to permit the takeover of BCP by CBGF.”
“BCP’s late-breaking claims are a pretext to defeat [her] legitimate employment and shareholder entitlements… and as part of a broader strategy to allow CBGF to assume control over BCP,” Dickinson added.
Dickinson pushed back against accusations that she deliberately misrepresented Venture’s financials, stating that financial disclosures related to Venture’s acquisition were prepared by the company’s former vice president of finance and reviewed by an external accounting firm. Dickinson said she reasonably expected that they would prepare the disclosures in accordance with accounting principles.
She argued that “any deterioration in the value of Venture prior to the closing date [of the acquisition] was entirely attributable to [her] tireless efforts in March through October 2022 to establish and enhance BCP, while leaving the day-to-day management of Venture to others.”
Dickinson added that “Venture made all necessary disclosures regarding its liabilities" and that she "provided transparent information to BCP’s board regarding Venture’s business, and both CBGF and BCP had the opportunity to conduct their own due diligence.”
BCP rebranded as ChangeMakers in October.
