How Mark Messier “guaranteed” himself another victory, this time in Court
In a career full of accolades, the greatest moment in hockey legend Mark Messier’s time in the NHL came after a guarantee. As captain of the New York Rangers, Messier “guaranteed” his team would come back and defeat their rival New Jersey Devils in Game 6 of the 1994 Eastern Conference Finals to tie the series. The man they call “Moose” delivered on that promise, scoring a hat trick and spurring the Rangers to the franchise’s first Stanley Cup since 1940.
But despite following through 27 years ago, Messier finds himself in a bit of a predicament, because one of his business partners couldn’t do the same.
In December, Messier filed a lawsuit in a New York trial court against Ed Moroz, the CEO of an Alberta Cannabis company called Destiny Bioscience, after Messier lost his $500,000 investment in the company.
Messier claims Moroz gave him a personal guarantee that the Edmonton, Alberta native would not lose on his investment. As seen above, Messier knows quite well the importance of a promise or personal guarantee, which Messier states was “essential” to persuading him to invest in the company.
According to public reports, “Destiny” is a “science-based cannabis genetics and tissue culture research and development company” that emerged following the legalization of cannabis in 2015 “…with a unique seed bank containing in excess of 700 rare heirloom and landrace strains of cannabis.”
Currently, Destiny doesn’t appear to be much more than a failed business venture. Per an order by the Court of Queen’s Bench of Alberta in May 2020, Destiny is unable to make good on its financial obligations and is in receivership, with a debt of $42 million. Creditors use receivership to seek financial recovery on unpaid contracts and the sale of Destiny’s assets and property could provide some relief.
Messier believes he is owed the amount reflecting the value of the 400,000 shares he purchased in Destiny. He is suing Moroz directly so he may avoid the barriers that come with trying to recoup assets from a company in financial distress like Destiny.
Messier’s central argument is that Destiny used his celebrity in bad faith to raise $30 million in funding and provide the company with “instant credibility” despite the extravagant promises made to their investors. Messier allegedly signed a “personal and confidential advisory agreement” on May 31, 2019 to be a “goodwill” ambassador for Destiny in order to build business relationships with potential partners, but only agreed to do so after Moroz’s guarantees.
In Messier’s claim, he provides evidence of his celebrity by referring to himself as “one of the greatest hockey players in history, former NY Rangers captain, a 6x Stanley Cup Winner and among ‘the most famous celebrities in New York’”.
While the legal statement of claim might be a slight exaggeration, calling Messier one of hockey’s all-time greats is still an understatement. Over a career that spanned 25 seasons, Messier ranks third on the NHL’s all-time scoring list behind Wayne Gretzky and Jaromir Jagr with 1,887 points, and won the Hart trophy twice as League MVP. Messier is also considered by some to be the greatest leader in the history of the game, reflected by the fact the NHL hands out the “Mark Messier Leadership Award” every year in his honour.
As it turns out, this isn’t Messier’s first dance with the law, and he’s hoping to continue his winning ways by employing a similar strategy. Messier previously won a legal dispute with his former team, the Vancouver Canucks, over a tenure which both Messier and the city of Vancouver hated so much that everyone agreed to never speak of it again.
When Messier signed a five-year, $30-million contract with the Canucks in 1997, he included a clause in the contract that said he would be compensated accordingly if the value of the franchise increased over the life of his contract. The reason for the clause’s inclusion was the belief that acquiring Messier would lead to a substantial increase in the financial value of the Canucks because of the Hall of Famer’s celebrity. He would therefore deserve a cut for his contributions. At this point, it’s easy to see a pattern in Messier’s legal disputes.
While Vancouver chose to exercise their $2-million contractual buyout option following the 1999-2000 season, after Messier had only played three of the previously agreed-upon five years, the contract and thus the clause did not officially expire until 2002. After a long-winded argument between the two sides over the legality of the clause, Messier took the Canucks to arbitration in 2012 and emerged victorious with an award of $6 million. The result was rather ironic, because while the franchise’s value had technically increased between 1997 and 2002 due to inflation, Messier’s contributions led to zero on-ice success and Vancouver’s attendance actually dropped while he was a member of the team.
Coming back to Messier’s battle with Destiny, typically cases like this get dismissed quickly and it is unlikely that Messier’s dispute will lead to anything more than an out-of-court settlement. However, the fact Messier reached a personal advisory agreement with Moroz in 2019 gives him an unique edge that allows him to go after Moroz directly and likely win the argument.
The personal guarantee in the agreement states that Messier would be paid the difference between $750,000 and 200,000 Destiny shares, meaning that if Destiny’s shares became worthless, Messier would still be owed $750,000. That’s a very bold claim to make, which demonstrates that making personal guarantees is never a wise decision. That is of course, unless you are Mark Messier.