The Globe and Mail reports in its Thursday edition that a group of investors led by former NHL player Lanny McDonald is facing off against Brookfield Asset Management in the Alberta Court of Appeal.
A Canadian Press dispatch to The Globe says that the two sides are at odds over how Birch Mountain Resources went bankrupt in 2008, and how its $1.6-billion limestone quarry in the heart of Alberta's oil sands ended up in Brookfield's hands for less than $50-million.
Mr. McDonald and his co-plaintiffs allege in court documents that Brookfield subsidiaries used "misleading," "usurious" and "oppressive" actions to gain control of the company and its Hammerstone quarry.
Brookfield said the accusations are "meritless, frivolous and an abuse of process" in court filings. Last year, a Calgary judge agreed, dismissing the case. Now Mr. McDonald, who was an independent director and shareholder of Birch Mountain, is back in court armed with new evidence as his lawyers try to launch an appeal.
Brookfield said in court filings that in 2008, Birch Mountain defaulted on loan provisions several times, was losing money and was failing to meet production targets. By November, 2008, Brookfield's Tricap called in its loan.
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