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by Stockwatch Business Reporter

The TSX Venture Exchange fell 5.15 points to 691.04 Tuesday. Jim Scott's Canada Jetlines Ltd., which plans to become Canada's next ultra-low-cost airline, has terminated a qualifying transaction plan to go public through David Brett's capital pool shell, Inovent Capital Inc. (IVQ). Mr. Brett has rejected the termination notice, claiming Inovent's target has no right in their agreement to terminate the agreement, and he is now huffing, puffing and talking with his shell's lawyers.

Inovent Capital and Canada Jetlines had previously signed a definitive agreement for the QT, which included selling a $50-million prospectus offering, but the deal expired on Jan. 31 and the hopeful airline chose to terminate the deal, which Mr. Brett had anticipated would be renewed. Canada Jetlines says it still plans to start operations later this year and it still plans to raise money, but it claims to have found a better option. It has also published its anticipated route network, focusing on flights out of the Vancouver, Winnipeg and Hamilton airports to nearby cities, along with flights to several cities in the U.S. and Mexico -- as soon as it raises some money. There are no plans to fly out of Toronto or Calgary. Inovent's Mr. Brett says the fledgling airline has "committed numerous material and significant breaches" of the QT agreement, including an unauthorized private dilution of its shares. He is referring to a $638,000 private placement of 50-cent units that Canada Jetlines completed last month, before the definitive agreement expired. On Tuesday afternoon, Canada Jetlines responded through a press release to Mr. Brett's attack, claiming Inovent's allegations are unfounded and the airline start-up acted with appropriate care, diligence and skill at all times.

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