Heated dispute between bathhouse owners leads to shutdown

These days there is no moisture in the Oak Leaf’s windows, only a sign saying “Sorry, we’re closed.”

Thestar.com
Aug. 3, 2015
By Geoffrey Vendeville

In its 1940s heyday, the Oak View bathhouse on Bathurst St. gave its Eastern European customers a salty, sweaty taste of home. Years later and under a new name, the Oak Leaf catered to regular Joes and celebrities alike, including Stanley Cup-winning defenceman Wally Stanowski, according to the sauna’s co-owner Oleg Korneichuk.

But these days there is no moisture in the Oak Leaf’s windows, only a sign saying “Sorry, we’re closed.”

The bathhouse shut down at the end of May, Korneichuk said in a phone interview. A judge placed it under receivership because of a dispute between Korneichuk and his partner, Fred Sobie. Sobie wants to close the valves at the Oak Leaf for good, selling the business and the property, according to a letter to Korneichuk from Sobie’s lawyer, Alden Dychtenberg.

The Oak Leaf owes more than $450,000, including nearly $217,000 in back property taxes, according to the same letter, filed in the application. Sobie declined to comment.

Korneichuk said in an interview the property will probably be listed soon, but he isn’t interested in selling. “All my life in Canada is connected to this,” he said. He was 25 when he came to Toronto from Kyiv in 1990 with his wife and 10-month old daughter, he said. They weren’t planning on staying, but then the Soviet Union collapsed.

He started working at the Oak Leaf in his first year in Canada, stoking wood fires to heat the steam baths, and became a co-owner in the late 1990s.

His partner Sobie owned a third of the company and inherited another third from his father Benjamin, who died in December 2011 at age 93, according to the company’s 2014 financial statement and a letter from Sobie’s lawyer.

The application from Sobie’s lawyer says the bathhouse was “once a profitable business, however, since Oleg became a shareholder in or about 1999, profits began to decline.” Just to keep the Oak Leaf open costs nearly $3,000 a week, the application says.

In April, a judge curtailed the Oak Leaf’s business hours and made Korneichuk pay for security guards. The court order was based on an affidavit of an investigator hired by the receiver, BDO, to visit the bathhouse. The investigator said he went to the Oak Leaf on April 10 and was offered “Tina,” or crystal meth, and “sexual favours.”

“An older guy offered $80 to massage the writer. The writer declined all offers,” he said. That night, he said he witnessed “sexual behaviour” in the sauna, showers and steam room that “increased to the point of group sex.”

The affidavit wasn’t only critical of naughtiness in the steam, but also the lack of wooden benches to prevent burns. “In comparison to other bathhouses in Toronto, this is the worst.”

A judge said the evidence of the independent investigator was “detailed enough to be disturbing and provide a prima facie case of potential liability to both (Sobie) and to the court-appointed receiver responsible for the day-to-day operations of the business.”

In an interview, Korneichuk denied the allegations in the investigator’s report. As for patrons having sex under the cover of darkness and steam, he said the house has strict rules against “misbehaviour.”

According to the late Toronto gay activist George Hislop, however, the Oak Leaf was part of the gay bathhouse scene as early as the late 1940s. “You’d have sex there, discreetly,” he told Xtra in 2001. “We had a tacit agreement that we didn't go into the straight areas and they didn't come into ours.

“Back then, the Oak Leaf was never raided and there were questions at the time why it wasn't.”

After nearly 75 years in business, the Oak Leaf has been part of local folklore. Michael Ondaatje set a scene of his novel In The Skin of a Lion inside the bathhouse’s “whitewashed rooms.” “I am very sad to see it close,” he told the Star in an email. “It really was this historical landmark.”

The Oak Leaf’s history was a big draw for customers, Korneichuk said. If he can find new investors, he would remake it in the style of a Russian banya and offer borscht, perogies and other Eastern European fare.

“With the right partnership, it could be a gold mine,” he said. “People could know a little piece of Russia.”