Foldum Corporation says the City of Hamilton purchased 40 of its modular housing units from two companies that Foldum accused of conspiring to mislead the City of Hamilton into buying the units from them at inflated prices.
In a legal action filed at the Superior Court of California, Foldum accuses Global Axxis LLC of using Foldum’s proprietary information to “conspire with a newly formed Canadian company, Microshelters Inc., to sell Foldum’s housing to the City of Hamilton.”
“In stark contrast to the purpose of Foldum’s modular housing – to provide shelter to those in need – Global Axxis and MicroShelters’ actions were profit-motivated, and Hamilton was charged a significant price for modular housing that was manufactured and installed without Foldum’s expertise.”
They claim problems with the mismanagement of the City of Hamilton micro shelters project have undermined confidence in micro shelters, causing Foldum “significant harm and damages.”
Foldum’s claims have not been tested in court.
The City of Hamilton has dismissed concerns that it overpaid for the shelters, claiming there is misinformation in the community.
The City is not a named party in the civil suit.
Hamilton Timeline
In August 2024, Mayor Andrea Horwath issued a Directive to create a low-barrier “temporary” outdoor tiny homes community at the Barton and Tiffany lands.
In the following weeks, the City bypassed local companies that build tiny shelters, instead choosing a newly incorporated company, Microshelters Inc., to order shelters from China.
The City emphasised that Microshelters Inc. was an “Indigenous-led company” providing an “Indigenous solution.” The City paid Microshelters $1.4-million for 40 modular housing units and took additional responsibility for all shipping costs, duties, taxes, and other expenses.
The City initially promised to open the project by December 20. On November 19, the Ministry of Labour issued stop-work orders. On December 19, the City conceded the project opening was delayed due to what it characterized as supply-chain issues.
During the following days, Foldum learned that MicroShelters Inc.’s website misrepresented itself using Foldum’s intellectual property. In early January, the State of Wyoming administratively dissolved Global Axxis LLC.
The first shipment arrived on January 13. Residents began being placed into the shelters in mid-February.
The public outcry regarding the fiasco shook city councillors, especially questions regarding the costs. An internal City of Hamilton review is underway, with a report expected to be presented to Council on April 9.
Foldum’s Statement to the Courts
Foldum’s civil suit states that “through its own research and development,” they designed transportable modular housing units that met United States building codes with electrical systems, AC/heater units, and fire safety design features, among other features.
In October 2022, Foldum contracted Global Axxis LLC to serve as Foldum’s liaison with the manufacturer in China.
The Foldum suit details its version of events leading up to the breakdown of the relationship between the two companies and the alleged infringements that followed.
By March 2024, the relationship had significantly soured.
Global Axxis LLC Used Foldum’s IP: Suit Alleges
Foldum alleges that Global Axxis stole its intellectual property and misused proprietary data to manufacture and sell Foldum’s product to Hamilton.
MicroShelters Inc Website Included Photo Foldum Sent Global Axxis
MicroShelters Inc.’s website copied images from Foldum’s website and created the impression that the newly incorporated company had experience by presenting Foldum’s work as its own.
Foldum’s suit states that one of the photos showing the inside of a Foldum unit “was not publicly available. The photograph was one that a Foldum employee sent to Global Axxis via text on August 22, 2023.”
The company argues this is evidence that Global Axxis and Microshelters were working together to use Foldum’s IP.
Foldum alleges that “MicroShelters deliberately misled the City of Hamilton.”
Problems with Hamilton Project Damaged Confidence in Product: Foldum Claims
Foldum claims that “Global Axxis and MicroShelters poorly performed on the contract with Hamilton” and the resulting media coverage “caused damage to Foldum’s reputation.”
The allegations have not been tested in California’s Superior Court. The Court has assigned case number 25CU010042C to the suit.
Production Details
v. 1.0.0
Published: March 27, 2025
Last updated: March 27, 2025
Author: Joey Coleman
Update Record
v. 1.0.0 original version
This never would have happened if the City had done its due diligence, and it would have remained hidden without the intrepid reporting of The Public Record.
Thank you Mr Coleman. This is why local journalism matters.
I know one of the local tiny home manufacturers that was very upset at the lost business because the city went ahead with a company without due research.
Shame.
To be clear, they went with this style of shelter because they are collapsible, could be folded up and stored for future use when/if this project ends. Not aware of a local tiny home manufacturer that provides that.
The City states this later in the process. Early on, it was this was the quickest solution for implementation.
Was being an indigenous-led company all that matterd to the city? If so, how does it serve reconcilliation to now have the public link the indigenous led company with dishonesty and greed? This doesn’t serve reconciliation, indigenous people, unhoused people or the taxpaying public.
Why the city continues to insist they didn’t make a mistake is anyone me. Have some damn accountability. It is clear as day that they overpaid. They should be supporting this suit — global axxis and microshelters should be paying damages to foldum and the city of Hamilton.
But of course, our local government continues to fail us.
Shameful behavior as usual. Use your local companies. Wonder why people distrust governments.
“MicroShelters Inc.’s website copied images from Foldum’s website and created the impression that the nearly incorporated company had experience by presenting Foldum’s work as its own.”
*newly
Thank you
I think that there needs to be a survey of the residents living in the Tiffany -Barton homes. I would like to know as a Hamilton citizen if the people living now in the temporary homes like living there.
Oh boy. This whole situation is like a dog’s breakfast and such an embarrassment.
Seemingly a lack of due diligence and accountability by City staff.
Our unhoused have been with us for some time now and I’ve lost track of how many times this issue has been discussed at various Committees and Council.
A definite difference in how we spend our own money compared to how we may spend someone else’s.
This is the best we could do?