Former Łutsel K'e CEO seeks N.W.T. court approval to access frozen funds

The former CEO of Łutsel K'e Dene First Nation's business arm Denesoline Corporation is seeking an N.W.T. court's approval to access frozen funds.

A court injunction last year froze all of Ron Barlas's assets and funds following allegations he funnelled millions of dollars out of the Łutsel K'e companies.

In July, an N.W.T. Supreme Court Justice found that Barlas had been using company resources for personal interests and ordered a trial to determine the level of damages for Łutsel K'e Dene First Nation (LKDFN).

LKDFN lawyers said the approximate value of the frozen assets was around $5 million at the time, out of which approximately $1.4 million has already been released to Barlas for some of his legal fees.

Barlas' lawyers requested access to frozen funds for his living expenses and legal fees, with the total ask amounting to approximately $1 million.

They stated Barlas has been unable to find work since his assets were frozen and because of recent media coverage. He claimed that his legal counsel has not been paid since January.

"Working in a grocery store won't help," Barlas' defence lawyer, James Thorlakson, told the court.

Thorlakson argued that significant material has been presented implying Barlas has undisclosed assets, which he denied. He said Barlas declared the existence of gold in his declaration earlier, which could have been easily hidden if he intended to do so.

Barlas previously testified that a lawyer he hired, Andrew Rogerson, was holding 300 ounces of gold worth approximately $900,000. Rogerson was later accused of breaching the court order freezing Barlas' assets.

Thorlakson said Barlas had safety concerns regarding the gold and believed Rogerson was an expert who would provide appropriate advice, and that Barlas' intent was not to hide anything.

Thorlakson also said Barlas has been borrowing money to cover some living expenses, receiving approximately $16,000 in cash. However, Barlas declined to disclose the lenders' identities to protect their privacy.

"Everything has been disclosed, no stone has been unturned," Thorlakson told the court.

Funds belong to LKDFN, not Barlas

LKDFN lawyers argued that multiple sources of funds have not been disclosed by Ron and his wife Zeba Barlas.

Matthew Sammon, a lawyer for LKDFN, argued that any funds and assets Barlas obtained through misappropriation belong to the First Nation's companies, not Barlas.

He also argued that Barlas' refusal to disclose the sources of funds creates a significant barrier to proving they are not misappropriated funds.

Sammon said during the trial, Barlas had no problem disclosing the identities of Rogerson and other Denesoline employees but has refused to reveal the sources of the $16,000 loan. 

Sammon said the proper approach would have been to request a sealing order to protect the lenders' identities, which Barlas did not do, as it might reveal other assets.

"It is difficult to put faith in anything Barlas says," Sammon told the court.

Jessica Kras, another lawyer for LKDFN, argued that Barlas' claim of having no other sources of funds besides the frozen assets is dishonest. She said that the burden is on Barlas to prove he has no undisclosed assets or expenses, which he has not.

The LKDFN lawyers said that even if the judge allows some access to any funds, the amounts allocated for legal fees and living expenses should be restrained.

Justice Nicholas Devlin will issue a written decision at a later date.

Judge orders transfer of properties

In a separate application heard Thursday Justice Devlin ordered the transfer of properties from Barlas to Denesoline Corporation.

Barlas was accused of using misappropriated funds to purchase properties in Yellowknife, prompting the corporation to get it back.

Since Barlas was removed from his CEO position in July 2024, Denesoline Corporation and several LKDFN companies have been managed by an accounting firm, B. Riley Farber Inc.

Martin Tobias Kruger, representing the firm in court, said the ownership of three properties Barlas purchased should be transferred to Denesoline Corporation.

The properties include one on Curry Drive, another on Niven Drive, and a cabin. Kruger said they are collectively valued at over $2 million.

Barlas' lawyers agreed to transfer two properties but disputed the transfer of the Niven Drive property, where Barlas currently resides.

The judge ordered the transfer of ownership of the cabin to Łutsel K'e Dene First Nation and granted the First Nation authority to manage the property on Curry Drive, including leasing or selling it.

Barlas' current residence will be addressed at a later date.