Owner of Paramount Fine Foods and the City of Mississauga are suing each other. Here’s why

The City of Mississauga says it’s temporarily renaming the Paramount Fine Foods Centre over a lack of payment and is considering legal options.

Mohamad Fakih, the owner of Paramount Fine Foods, is alleging the City of Mississauga defamed him by publicly claiming his company owes more than $1 million in connection with the naming rights of that city’s largest sports and entertainment venue.

The municipality announced in late May that it would be renaming Paramount Fine Foods Centre to the Mississauga Sports and Entertainment Centre at the beginning of June, following the termination of its contract with Paramount.

In an open letter dated May 26, Mississauga Mayor Carolyn Parrish said the city had been “forced” to end their agreement, alleging the food company owes the city $1.6 million.

“To recoup these monies, the City will be pursuing legal action after attempting every possible solution acceptable to both parties. It is unfortunate that the owner of Paramount has chosen to move these discussions into the public realm,” Parrish wrote.

In response, Fakih posted a video online expressing his disappointment with the city and its “misleading public statement” about the end of their business relationship. He added that his company had been “ready and willing” to pay the city for more than six months.

Fakih launches libel lawsuit

Last Friday, Fakih launched a libel lawsuit against the City of Mississauga. In the filing, he alleges both the city and Parrish misrepresented their business relationship, calling their public statements “false,” “defamatory,” and “severely lacking in context.”

While the city claims Fakih owes $1.6 million, the libel suit alleges the city proposed a discounted settlement of roughly $1.2 million plus tax, which would be paid in equal instalments over 36 months.

Thirty-six post-dated cheques were provided to the city on May 27, according to the statement of claim.

The statement of claim also alleges that the city breached its confidentiality agreements by sharing how much money was owed.

As a result, Fakih is seeking $3 million in general damages for defamation, $750,000 for aggravated and punitive damages, and $500,000 for general damages for alleged breach of confidentiality obligations.

“In good faith, Paramount offered to mediate the issues with the City of Mississauga and took tangible steps to address the alleged arrears owing,” Fakih’s lawyer, Sam A. Presvelos, said in a statement.

“Instead, the City and Mayor Parrish decided to litigate the issues. It is unfortunate that resources will be spent fighting when a fair and practical resolution was on the table.”

In a statement to CP24, the city said it is aware of Fakih’s lawsuit but declined to comment further as the matter is before the courts.

“We believe it is entirely without merit and will respond in due course through the courts,” Mississauga spokesperson Irene McCutcheon said.

City seeking $9M for alleged breach of contract

On Monday, the City of Mississauga filed its own lawsuit against Fakih Group Inc. (FGI), formerly Paramount Franchise Inc., for allegedly failing to pay their debts as outlined in the naming rights deal.

The city is suing Fakih $9 million for breach of contract and conversion, claiming FGI failed to meet its contractual obligations within a year of penning the deal, which was first signed in July 2018.

The statement of claim alleges FGI was granted exclusivity for 10 years so long as an annual “sponsorship fee” was paid, amounting to $450,000 (plus applicable taxes).

The company was also expected to hand Mississauga a 10 per cent cut of all the gross sales made through the Paramount-branded concessions.

By July 2022, the city claimed FGI owed just over $1.6 million. According to the lawsuit, the two parties entered an amended agreement in May 2023 that extended their deal to 2032, and partially waiving the past sponsorship fees owed in the amount of roughly $850,000.

The lawsuit alleges that FGI and Paramount once again defaulted on their agreement. Fakih Group Inc. requested a revised payment plan, and from October 2023 to May 2026, the lawsuit said the company paid $393,000 of the roughly $1.78 million owed under the new plan.

In a letter dated May 20, the city said it formally notified FGI and Paramount that it would be ending its agreement by the end of the month, saying it has “incurred significant expense to remove and dispose of advertising and signage.”

‘Political stunt’

Fakih, in response, said the city’s countersuit is a “political stunt against a man who has spent over a decade investing in, donating to, and serving this city.”

“The Mayor has repeatedly breached confidentiality and in fact the details of this lawsuit was known to many by Saturday, before the City had even filed the claim. That has no place in public office,” he said in a statement.

The libel suit also alleges both the city’s and mayor’s statements triggered boycotts against his businesses, adding he received “a substantial volume of anti-Muslim, anti-Arab and related abuse.”

With files from CP24’s Joshua Freeman