NWT Appeal Court rejects Denesoline Corporation’s disgraced head’s claim

The NWT Court of Appeal has dismissed an appeal by the former head of the Łútsël K’é Dene First Nation’s business arm, found to have misappropriated millions of dollars from Denesoline Corporation.

One year ago, NWT Supreme Court Justice Karan Shaner ruled in favour of Chief James Marlowe and the fly-in community of about 300 located on the East Arm of Great Slave Lake, in a lawsuit against Ron Barlas.

Shaner found that Barlas had “engaged in egregious conduct and abused his position as CEO” of Denesoline Corporation, “while gaining significant financial benefit for himself and his family.”

Stated the Appeal Court’s ruling release on Friday: “The appellants argue that there were palpable and overriding errors of fact based on the record before (Justice Shaner).

“Chief Marlowe and LKDFN say the appellants’ appeal position comes down to Ron Barlas’s subjective opinions and claims about the legality, reasonableness or fairness of what he did.

“Ron Barlas emphatically disputes characterizations by (Justice Shaner), Chief Marlowe and LKDFN of his conduct, and he likewise disputes various findings by (Shaner) about discreditable conduct that she found was revealed by his own words and the documentary record.”

The appeal was heard April 15th. The Court’s decision to dismiss Barlas’s apeal was released on Friday morning.

In her 2024, 53-page decision, Justice Shaner ruled Barlas breached his fiduciary duties to the LKDFN by failing to disclose his own interests, “which were significant,” and he caused his employer to enter into agreements, transactions, and governance structures which were unfair and prejudicial.

“In my view, the oppressive conduct here is extreme and the consequences for the LKDFN Companies and their stakeholders are so serious that significant intervention is warranted,” wrote the judge.

“Mr. Barlas engaged in egregious conduct and abused his position as CEO. There is no question he must be removed from any role in any of the LKDFN Companies. Allowing him to continue in any capacity is untenable.”

Advertisement

Shaner also found Barlas’ wife Zeba assisted in the transactions and that she was “a knowing recipient of the proceeds and benefits.”

Shaner ordered there be a trial on the actual amount of financial losses suffered by the LKDFN’s companies, which will require forensic accounting and other experts.

The YKDFN believe the losses to be between $10 million and $14 million.