Former CEO countersues Winnipeg business and board chair for defamation, unpaid wages

The Manitoba Law Courts building in Winnipeg on Wednesday, May 8, 2024. THE CANADIAN PRESS/John Woods

The former head of a Winnipeg-based business that helps nonprofits fundraise is denying all allegations of fraud and embezzlement raised in a civil lawsuit, alleging that all actions were taken in the company’s “best interest.”

Nicholas Tenszen, former CEO and president of Funding Change, is now countersuing the company he co-founded and board chair David Asper for damages, including for defamation, according to court filings with Manitoba’s Court of King’s Bench.

In August, Tenszen was listed as the defendant in a statement of claim brought forward by Funding Change, a company that conducts online raffles and holds the proceeds in trust.

The lawsuit alleged that Tenszen “processed payments directly to himself” from August 2022 to July 2024, without the knowledge or consent of the board of directors. The suit sought an unspecified amount in damages.

Tenszen was also accused of using trust funds to pay operational expenses, failing to pay liabilities to the Canada Revenue Agency (CRA) and failing to provide regular performance reports, per the suit.

However, Tenszen “denies any misappropriation, breach of duty, unjust enrichment or misconduct,” according to a statement of defence and counterclaim filed last Friday.

He alleges that all funds received were either wages under employment agreements, reimbursement for personal funds advanced or payments authorized by the company’s board of directors.

“Between 2019 and 2021, he (Tenszen) worked without salary and also loaned approximately $40,000 of personal funds, of which only a portion was reimbursed,” the suit says.

Tenszen alleges that “all payments were recorded within the company’s accounting software and offset against the deferred wages liability account,” according to the court filing. “No raffle funds were unaccounted for.”

He also claims that the CRA liability was disclosed and never concealed from the company’s board of directors, alleging that he “fought an incorrect tax assessment” at his own time and expense. Tenszen denies having failed to pay owing CRA liabilities, alleging that he resolved a $158,000 claim to “near nil.”

“The board, including its chair, David Asper, received regular weekly and annual reports for more than six years, with ample opportunity for dialogue,” the suit says.

Tenszen also denies his removal was based on “genuine” concerns from the Liquor, Gaming and Cannabis Authority of Manitoba (LGCA), after it started an investigation into Funding Change. He claims that the company’s license was fully reinstated — without conditions — after the investigation.

Resignation ‘forced’ amid company takeover: counterclaim

Tenszen alleges that he was “forced” by the board chair to resign and was removed from the board—along with all other founding shareholders—in an attempt to take over the company.

“In mid-2024, when Funding Change was poised to expand nationally, Asper reported Funding Change’s account practices to LGCA—practices Asper had been aware of from 2017—to set up a situation for him to take over the company, and to wipeout all other shareholders,” according to the court filing.

Tenszen also claims that an independent audit confirmed that he had not embezzled funds and that that the company owed him wages and lent funds. He alleges that Funding Change misreported his income for tax purposes and vacation days, per the suit.

“Funding Change remains confident in the merits of its litigation against Tenszen and views the statement of defence and counterclaim as an expected part of the legal process,” says a statement in-part from Asper, through his lawyer.

The statement says that Asper “had to inject a substantial amount of money to rectify the issues to ensure that charities were made whole.”

In August, Asper issued a public statement that Funding Change is “stronger than ever” following changes to the company’s leadership team and financial position.

Tenszen is seeking approximately $300,000 in unpaid wages, nearly $10,000 for unreimbursed expenses, general damages for defamation and reputational harm, as well as aggravated and punitive damages.

Funding Change has completed over 2,300 raffles with over $19 million in total sales, according to it’s website. Tenszen alleges he increased the company’s revenue by more than 600 per cent with more than $310,000 in company sales in 2024, according to court filings.

CTV News has reached out the LGCA but has not heard back.

None of the claims have been tested in court.